Last year Kevin Durant hired Jay Z owned Roc Nation to represent him in business negotiations. Roc Nation jumped out the gate signing contracts with Sprint and BBVA compass as well as negotiating a larger sports drink contract by dropping Gatorade and signing with Sparkling Ice.
Now Roc Nation is pitting the three major sports apparel companies against one another. Currently Durant is under contract with Nike, but Roc Nation brought Adidas and Under Armour in to compete for Kevin Durant’s endorsement and brand. Under Armour is leading negotiations with an offer of up to $285 million over 10 years. The contract includes Under Armour stock and amongst other perks a community center built in his mother's name.
Under Armour shares are up 96 percent over the past year, compared to those of Nike, which are up only 21.5 percent.
The Ball is still in Nike’s court
Nike may match Under Armour’s offer as Nike has a contractual right to match any deal Durant receives. If Nike matches the offer Durant cannot legally choose an equal offer from Under Armour, due to a stipulation in Durant’s previous contract with Nike.
If Nike does not match Under Amour’s offer, Durant would join Stephen Curry as the second NBA star to leave Nike and join Under Armour.
Nike's current proposal offers Durant a minimum royalty guarantee of no less than $20 million a year.
Despite Nike offering at least $5 million less annually than Under Armour a move from Nike would be a dramatic shift for Durant, as he has been extremely loyal to Nike.
Even before Durant’s rookie season, Kevin signed a $60 million contract with Nike and in negotiations Durant declined a larger offer, at least $20 million more from Adidas.
A change in Nike and KD
Nike seems to have veered from how it typically handles re-signings. The company typically renews contracts on the final year of the commitment. For instance when LeBron James’ seven year contract was in its sixth year, Nike approached James and hammered out another long term contract.
The change is likely due to Durant’s new representation. Roc Nation may be trying to pit major sports businesses against one another to raise the value of their client.
If Nike does not match Under Armour’s offer, ripples of the impact may be seen in the NBA. If a person’s salary is an indicator of commitment, Durant would be more committed to Under Armor than the Oklahoma City Thunder. Under Armour’s deal would pay KD at least $10 million more than the Thunder over the last two years of KD’s current NBA contract.
Under Armour is headquartered less than 36 miles from Seat Pleasant, Maryland, hometown of Kevin Durant and near by a team Durant has discussed interest in joining in the 2016 free agency, the Washington Wizards.
The primary drawback for Durant is the loss of the brand “KD.” In January Nike was awarded trademark for the brand KD. Durant has since filed for trademark of the phrase “Sniper Jones.”