On October 22nd, Nike announced that its global equipment, merchandise, marketing, and content partnerships with the National Basketball Association (NBA) and the Women's Basketball Association (WNBA) have been extended for 12 years. Until 2037, Nike will be the exclusive supplier of on court jerseys and apparel for the NBA, WNBA, and NBA G.
Nike is not just a sponsoring brand for the league, we are a strategic partner. Our collective strength and global influence will continue to create new paths and opportunities for players and fans, "said Elliott Hill, President and CEO of Nike, in the renewal announcement.
The first quarter report of the 2025 fiscal year released by the American sports giant this month shows that Nike's revenue for the three months from June 1 to August 31, 2024 was $11.6 billion (approximately RMB 82 billion), of which the Greater China region's revenue for the first quarter of the new fiscal year was $1.7 billion (approximately RMB 12.016 billion), a year-on-year decrease of 3% on a constant exchange rate basis.
In terms of volume, Nike's single season revenue of nearly $12 billion still has no competitors at the global level. But the declining performance is also sounding the alarm, and Nike urgently needs to return to the growth channel.
It is worth mentioning that this is Elliott Hill's first major move since taking office at the beginning of the month. Elliott Hill previously worked at Nike for 32 years, holding multiple important management positions and gaining extensive experience in market and consumer observation. During his tenure as President of Consumer Markets, he helped Nike achieve significant growth in performance in North America. Therefore, this new CEO is well aware of the importance of professional sports.
Just returned and signed a heavyweight contract extension with the NBA, Nike is undoubtedly sending a signal to the outside world: the company will still regard basketball as one of its core businesses and is eager to maintain its position as a leader in the basketball field. Indeed, although Nike has maintained its top position for many years, in recent years, more and more mid sized brands have come up with ideas for the basketball market, which has forced American sports equipment giants to feel a sense of crisis.
Nike's advantage is holding the most important and core resources in its hands: Nike has been a partner of the NBA since 1992, a marketing partner of the WNBA since its establishment in 1997, and a marketing partner of the NBA G League since the 2017-2018 season.
Other small and medium-sized brands generally seek opportunities through two methods. The first idea is to focus on one or a few core sports stars since it is not possible to compete with Nike for the "bench depth" of signing stars in a short period of time. Skechers has chosen to sign Joel Embiid to launch a brand of shoes specifically designed for basketball, and plans to collaborate with Embiid to launch a series of joint styles; New Balance has signed NBA star Leonard and their approach to launching new products is similar to Skechers.
Another approach is to take the route of "surrounding cities from rural areas" and seek to increase the volume of the relatively less well-known college student league. The representative in this regard is Under Armour. The brand sponsors the 2023-2024 NCAA (National Collegiate Athletic Association) women's basketball championship team, the University of South Carolina. MiLaysia Fulwiley, a guard in the championship winning lineup of the University of South Carolina, is also the first college player signed by Curry Brand, a subsidiary of Adama.
It is interesting that domestic brands are also competing for resources in the basketball field.
Li Ning has long held sponsorship from the CBA, another domestic giant ANTA won the contract from CUBAL at the beginning of the year, and the domestic brand "Lao San" Xtep became the official sponsor of the Chinese Three Player Basketball League. In terms of basketball stars, Li Ning has long been a leading domestic brand in the basketball industry, thanks to its collaborations with players such as Wade, Butler, McCollum, and Russell. Anta, on the other hand, landed in the United States with the release of the Irving generation and pursued fiercely.