Nike says it has inked a “lifetime” agreement with LeBron James, a bet the NBA star’s shoes and apparel will sell strongly even after he’s no longer playing on the courts.
“We can confirm that we have agreed to a lifetime relationship with LeBron that provides significant value to our business, brand and shareholders,” a Nike spokesman said in an e-mail to Coins2Day. “We have already built a strong LeBron business over the past 12 years, and we see the potential for this to continue to grow throughout his playing career and beyond.”
Terms of the agreement were not disclosed.
Nike (NKE) and James have worked together since 2003, when the high school superstar signed a 7-year shoe deal with Nike worth a reported $93 million. They signed another deal in 2010.
It has certainly been a very profitable and busy week for the 30-year-old Cleveland Cavaliers forward (who won two NBA championships with the Miami Heat). Coins2Daylast week reported that James scored an investment of $15.8 million in his multi-platform media company Uninterrupted.
What does this deal mean in the scope of a massive behemoth like Nike, which earlier this year promised to reach $50 billion in sales by 2020? Well, a few things. Nike is essentially betting that James will stay scandal-free throughout the rest of his career, as well as have staying power in the many years of his life when he is no longer an active player.
Nike has some experience in that arena. Michael Jordan retired back in 2003 but in the subsequent years, his brand has pulled in billions. And while Under Armour (UA) and Adidas have stepped up their efforts to ink more individual contracts with NBA stars, Nike had a clear advantage as the largest player in the space. An existing relationship with James also was likely a major factor in the parties making their relationship so permanent.
The James plan could mirror what Nike has done with Jordan. Nike executives acknowledged that much of the growth for Jordan has come from the U.S. Market and from gear sold almost exclusively to men. But women account for half of the NBA viewing audience, and as the sport goes global, there’s potential for the brand to expand internationally as well.
In October, Nike set a $4.5 billion annual sales target for the Jordan brand – double where it stands today.