Adidas said it will not extend its deal as the official apparel sponsor of the NBA after the 2016-17 season.
“While we have enjoyed a successful long-term relationship with the league, we continually review our partner agreements to ensure they are meeting our investment and delivering on our brand and business needs,” Adidas said in a statement.
“We are re-imagining and reshaping our business and have evolved our strategy to look at new, cutting-edge ways to drive our brand and support our business over the long term. We will invest more in telling stories that matter to our consumer, building category-disrupting innovative products, reinvigorating youth basketball with our new Next Generation programs and doubling our roster of professional athletes to authenticate our brand on-court.”
This announcement comes nearly a week after Adidas was informed by the NBA that it would open the bidding to other companies. Both Nike and Under Armour have reportedly expressed interest in becoming the next official apparel sponsor.
A source told the Portland Business Journal that the NBA is concerned about Adidas losing ground in the global athletic and apparel industry and leadership instability.
Last year, Adidas fell to the third largest seller of sporting goods in the U.S. behind Under Armour and dominant frontrunner, Nike. Global brands chief Erich Stamminger, who drove the initial NBA deal, left the company last year. In February, Adidas’ board started the search for a successor to long-time CEO Herbert Hainer amid shareholder unrest.
For Adidas’ part, Chris Grancio, Adidas' global basketball general manager, told the Portland Business Journal that the sponsorship hasn't been as lucrative as hoped.
“We haven't been able to elevate our brand for the basketball consumer that we're targeting,” Grancio said. “We ultimately decided that we would change our investment strategy and invest more in players on the court.”
On its fourth-quarter conference call, Hainer said turning around its Americas business was its highest priority this year and it’s planning to ramp up investments to sign NBA, NFL and MLB player as well as college teams. Adidas' NBA roster includes Damian Lillard, John Wall, Derrick Rose, Dwight Howard, Andrew Wiggins, Tim Duncan and Joakim Noah.
Nike was the NBA's official apparel sponsor until 2004. The majority of NBA players have deals with either Nike or its Jordan brand, including stars such as LeBron James, Kevin Durant, Kyrie Irving, Kobe Bryant, LaMarcus Aldridge, Anthony Davis, Carmelo Anthony, Kyle Lowry, Chris Paul, Blake Griffin, Chris Bosh, Marc and Pau Gasol and Paul George.
Under Armour could also be a contender to take over sponsorship, showing its determination to become a major player in basketball with its failed bid to take Kevin Durant away from Nike. It has recently gained significant traction in the basketball category with the Curry 1, Stephen Curry’s first shoe. It also counts Brandon Jennings and Kemba Walker on its NBA roster.
The NBA is to expected to announce a new partnership sometime around its board of governors meeting in April.