Rookie Contract: How Under Armour Outsmarted The Market

In August, I wrote about the brand bidding war for Kevin Durant and how Under Armour would be silly to not sign Durant to the pricy contract. While it would’ve given Durant nearly $285 million over the next decade, it would’ve also given Durant stock options and initiatives to help support the DC and Oklahoma communities. Nike countered Under Armour with a massive contract and Durant resigned with the Oregon giants of Nike.

This Thursday, the NBA finals will begin and Under Armour’s golden boy, Steph Curry, is leading the “red-hot” Warriors against the Cleveland Cavaliers. Curry’s fantastic season led to his first ever MVP award. Prior to this season, 72% of the NBA wore Nike Basketball sneakers while only 4% dons Under Armour. After the performances of Curry and the positive feedback given toward his first ever signature sneaker, I expect about 8% or 9% of the NBA to be wearing Under Armour in the following season.

Steph Curry has reaped the benefits of being Under Armour’s primary client and it’s just the beginning. With the NBA’s Uniform contract “up for grabs” in the following season, Under Armour alongside Nike are the two candidates to become the league’s next supplier.

Also, next season’s model with Under Armour has recently been leaked online alongside a low-cut pair. While looking similar, there are minor differences which could propel it to the hands of professionals and youth alike.

While we don’t have their exact numbers for basketball or the Steph Curry line, here is a visualization of how Under Armour has done financially since the NBA season started in October.

Under Armour’s potential seems unreached despite their fantastic past twelve months. With Stephen Curry on their team, his performance in the upcoming finals will determine how much (more) their stock will increase. While I originally criticized them for their lack of urgency toward Kevin Durant, at the moment, it seems that they’re doing just fine.