Earlier this week, Adidas submitted a $200-million bid over 13 years to sign Houston Rockets guard James Harden. Nike has until the end of next week to match the offer.
You might wonder: Why would Harden be worth so much--more than $15 million a year--to Adidas? The truth is, Harden is a bargain at that seemingly exorbitant price. Two of his NBA colleagues in iconic superstardom actually make more per annum: Nike pays LeBron James roughly $20 million a year and Kevin Durant about $30 million annually, according to Forbes.
Now consider a few more facts about Harden. For one thing, he plays in Houston. You might not view Houston as a big market, but compared to where James (Cleveland) and Durant (Oklahoma City) play, it's a large stage.
What's more, as ESPN.com's Darren Rovell points out, Houston is perhaps more plugged into China, as a global market, than any other NBA team. The reason? Yao Ming, a Chinese player who started with the Rockets from 2002-2011, making eight NBA All-Star teams (and some funny Visa commercials) in the process.
In addition to Harden's global marketability, he offers Adidas the potential to become a celebrity endorser of the highest order--someone whose name (and beard) recognition transcends the game of basketball, and enters the broader realm of "entertainment" or pop culture. Rovell notes:
There's also reality star-type placement, as there's apparently a budding relationship between the Rockets star and Khloe Kardashian. There's an even greater connection with Adidas as rap star Kanye West, who is married to Khloe's sister Kim, moved his Yeezy line from Nike to Adidas last year.
If Harden begins appearing on highly rated non-basketball television shows, then whatever Adidas gear he is wearing would reach a much broader audience.
Moreover, Adidas needs the basketball equivalent of an A-list presence. Nike has James and Durant and Kobe Bryant. Under Armour has reigning NBA MVP Stephen Curry. The Adidas stable is not empty, but it could use a jolt. It's biggest name, Chicago Bulls guard Derrick Rose, is a supreme talent--but he's not well known to non-basketball fans or to those outside the Chicago market.
The same is true for the company's two other stars: Damian Lillard of the Portland Trail Blazers and John Wall of the Washington Wizards. They are terrific players, but your non-sportsfan friends probably haven't heard of them, unless they live in Portland or Washington. Harden offers Adidas the chance to partner with a player whose star power potentially expands beyond basketball and regional recognition.
The move is also part of an Adidas strategy to cement its status as the No. 2 basketball sneaker worn by NBA players, second only to Nike (and its Jordan Brand subsidiary). As Cork Gaines notes on Business Insider, there were 70 NBA players who wore Adidas sneakers last season. While that was well ahead of Under Armour's total (13), it was far behind Nike's (283), and just a bit ahead of the Jordan Brand (39).
So the question, heading into next week, is whether Nike will match Adidas's offer for Harden. One reason it might be wise to do so is Harden's age. He turns 26 later this month. While Durant turns 27 in September, both James and Bryant are north of 30. So an investment in Harden would ostensibly give Nike a few more years of a superstar in his prime.
Beyond all this, Harden has an intangible coolness factor and likability that is difficult to explain or quantify. But almost any basketball fan knows it exists. It's partially because he's left handed. It's partially because of his unmistakable beard. But it's mostly because there has never been a player whose skill and artistry is exactly like his.
Though he's American born, his game has a distincly global nature, thriving with open spacing and ball movement. If anything, his moves and skills seem to be modeled on those of Manu Ginobili, a longtime San Antonio Spurs superstar who hails from Argentina. Yet his game also has components that are more stereotypically American: He is exceptional in isolation, and there's a swagger to his dribble-drives and step-back three pointers.
Taken together, he's an original package, one who has the respect not only of fans, but also his peers. In player-only voting, NBA players actually selected Harden--not Curry--as the NBA's most valuable player. Are such accolades worth a $200-million price tag? Adidas certainly thinks so. And in business, one buyer is all it takes to make a sale.