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It’s official! We’ve been speculating for a while now, but there is finally confirmation. ESPN’S Darren Rovell confirms that Under Armour has an offer for Kevin Durant somewhere worth $265 to $285 million for a 10 year commitment.
Jay-Z’s sports management firm, Roc Nation Sports, let Nike know that Under Armour has made the huge offer to KD. The exact numbers of the deal won’t be known until he signs the contract because the deal also includes a community center built in his mom Wanda Pratt’s name.
Luckily for Nike, in KD’s current contract, Nike has the opportunity to match that offer and KD is legally bound to stay with Nike. Sources have said that Nike’s last offer would have given Durant a base and a minimum royalty guarantee that would be at least $20 million a year.
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This is a huge risk for Under Armour as it is such a small company compared to Nike so UA would have to give up cash up front. This would be the company’s largest sponsorship deal that they have ever committed to. Since the deal was for KD to make an average $26.5 to $28.5 million a year, they would be allocating about 10 percent of their current annual marketing budget on KD alone. Though they are almost at a reaching point of $3 billion in revenue only about 1 percent of the money is from sales of basketball shoes.
However, Under Armour feels Kevin Durant is worth it because of the two huge goals of CEO Kevin Plank. Plank feels KD’s presence can help them grow their small business of selling shoes. Since he’s grossed about $175 million in selling product last season, UA thinks he’s a great face for the company’s basketball shoe division. The other thing Plank wants KD to do is the give the company international presence that has been lagging since the company started. KD is an international star his face is recognizable globally, so being the face of UA would be great for the company to be known outside of the U.S.
So now we all have to sit and wait for Nike’s decision. The ball is now in their court, we must see whether Nike will put out that enormous contract and keep their superstar. What do you guys think? Is KD worth Nike putting out this amount of money for?
