In mid-August, the numbers—$225 million! $300 million! $350 million!—began trickling out.
Suddenly, shoe company free agency became mainstream news.
Could Under Armour—the Baltimore-based upstart founded in 1996 on $15,000 but now with $3 billion in revenue expected in 2014—actually poach Durant from Nike, the behemoth in Beaverton, Oregon, with anticipated revenue of $30 billion for 2015?
Not this time. The Oklahoma City forward stuck with Nike, announcing the news on Twitter and ending what might have been a major coup for an ascending brand. Under Armour’s high-stakes courtship and Nike’s ensuing reaction underscored Durant’s perch among the ranks of sport’s most marketable stars—a game-changer.
“He would have given UA instant credibility,” said Matt Powell, vice president of industry analysis for Sports and Leisure Trends at The NPD Group, via email. “And every brand needs credibility—that’s why they pay elite athletes to wear their products. Signing KD would have helped UA gain traction in the basketball market.”
Indeed. According to Powell’s estimates, Nike and its Jordan subsidiary comprise 95 percent of all U.S. basketball sales, with UA currently at less than 1 percent.
So, even as Nike seemingly prints cash—and with megastar LeBron James already on board and established as the company’s top endorsee—was re-upping with Durant a matter of playing “keep-away” from a surging competitor or simply continuing to appreciate and maintain an existing relationship?
“KD’s been a Nike athlete since he entered the league and we’re proud to have a relationship with one of the most dynamic players in the game,” Nike spokesperson Brian Strong wrote in an email. “He possesses exceptional on-court talent, a strong off-court personality and the ability to connect with and inspire the athletes that we exist to serve, including the youth.”
The last three words in that statement are likely the key.
A Millennial For The Millennials
Marketing to—or rather, engaging with—millennials (the so-called “selfie” generation) is mandatory. Per the U.S. Census Bureau, there are more than 74 million 18- to 34-year-old Americans. It’s the country’s largest demographic. It’s also the most coveted demographic.
In short, there is product to be moved, but accessing this Internet-savvy and ethnically diverse group is difficult.
Various studies and reports, such as this, provide context. The chief points being: Millennials don’t want to be “sold”; brand loyalty supposedly doesn’t exist; they trust the opinions of others within their social networks; passion is important; they appreciate anything organic rather than something corny and forced.
For a company such as Under Armour, which is just 18 years old, focusing on millennials is standard operating procedure. It’s what the brand was built on—kids and athletes. It’s not an initiative but rather how business is conducted. Durant resonates with this demo, hence the high-stakes wooing. And although he passed, Durant, in addition to Nike, has a growing list of clients that includes BBVA, Sprint, Sparkling ICE, Panini, Kind, Skullcandy, 2K Sports and Orange Leaf.
“We’ve been able to leverage those attributes that KD has—he speaks from the heart, he’s genuine and he has great values—to align him with corporate America and specifically with brands that have been a big part of his life,” says Michael Yormark, president and chief of branding at Roc Nation, which represents Durant. “That’s what makes him so unique and that’s what makes what we’ve done unique. Every one of the brands he works with today, they are a part of his life and authentic to him. That’s rare in this business.”
It’s also a decidedly millennial approach: Durant is 26.
Who better, then, to help companies in their efforts to reach millennials than one of their own, albeit more high-profile?
While James remains the man around whom the NBA orbits, he also turns 30 in December. That’s hardly old, but James has racked up plenty of mileage, enough so that there is a lingering fatigue, a malaise that infected the once- and current Cleveland Cavalier, much derived from an ill-conceived “Decision” before leaving Ohio for Miami.
“To me, LeBron is much more of a polarizing figure,” says Paul Swangard, managing director of the University of Oregon’s Warsaw Sports Marketing Center. “I think there is a clear attempt by KD’s folks to say, ‘How do we make him different enough that he resonates with those people that can’t find LeBron relatable?’”
For instance, no one batted an eye this summer when Durant, who is second to James in terms of NBA endorsements, decided to drop out of the U.S. men’s national team, citing the need to recharge his batteries for the upcoming season. Of course, it just so happened to coincide with his negotiations with Nike and Under Armour.
“It’s weird how you can still relate to someone who just got a $300 million contract from Nike, but you still like him, you’re still proud of him and excited for him,” says Taylor Blair, the social media and web marketing specialist for Sparkling ICE. Forbes reports Durant's 2014 endorsement earnings at $14 million.
Adds Matt Delzell, managing director of The Marketing Arm: “People generally find him really likable because they don’t hear bad things about him.”
Ask Yormark for an explanation, and he’ll repeat the same word: authentic.
One of Durant’s promotional efforts for NBA 2K15—he’s the cover athlete—went viral. During an appearance on The Tonight Show Starring Jimmy Fallon, Durant admits that he plays the best-selling video game not as himself but as James, causing an incredulous Fallon to wonder why he doesn’t use himself.
“Nah, that’s kind of arrogant,” Durant said.
It was humorous, and it was honest. Such humility is endearing yet rare.
“Authenticity is such a cliched word, but it’s what works,” Delzell says. “If you look at great endorsements in the last 25 years, the ones that fail—relatively speaking—don’t have the impact that other companies have with the same person, and that comes down to authenticity.
“Michael Jordan and Ballpark Franks? Does anyone think he’s sitting at a ballpark with normal people eating a hot dog?”
It’s easy to picture Durant sitting around with his teammates and friends playing NBA 2K15, because that’s what actually happens.
Not to compare, but do you really think James will be cruising around Akron in a Kia during the summer?
"You're The Real MVP"
Balancing a cultivated image with the actual self can be, in most cases, a business decision. It’ll be impossible to ever truly know a star athlete, but there will be glimpses occasionally on display.
Those moments, such as Durant’s epic 26-minute MVP acceptance speech, can be gold. The corresponding millennial love was thick, whether it was fans claiming unending loyalty to Durant, others saying his speech made them look like ungrateful brats in comparison or even others wishing there was a drug that recreated the feeling of watching the speech for the first time.
The speech was natural, though. Nothing was scripted. Yormark said he asked Durant about the speech that morning in May, trying to glean some insight. But there was none to offer. Durant said he was going to speak from the heart and “whatever comes out will come out but it’s going to be real.”
Thanking virtually everyone who helped him get to that point, specifically his teammates, coaches and his mother, whom he labeled “the real MVP,” Durant cried, babbled, stopped and started. He was raw, revealing and riveting. Former NBA coach and current ESPN color analyst Jeff Van Gundy declared it the best speech since Lou Gehrig, while Yormark says it helped close several deals that were close to completion.
If he wasn’t a role model before, he was afterward.
“He has the opportunity and the potential to become a ‘descriptor’ to what brands would be looking for in the future—they’ll say, ‘I want a KD,’” Swangard says. “Maybe not him specifically, maybe he’s not a fit for what my brand represents or what my business objectives are, but a guy who is authentic, who is real and obviously plays at a level that his success on the court has a bearing on his visibility.
“He could well be one of those great case studies that becomes the norm.”
Even if that’s not his intent.
Being a millennial, Durant sought brands to team with that were special, possibly even unique—unique to him.
Imagine how thrilled Reese Travis, CEO of Oklahoma City-based Orange Leaf, was when he heard Durant was not only a fan of his company’s frozen yogurt but that the NBA star was also interested in becoming a brand ambassador.
It happened. Durant has a share of equity in Orange Leaf, now a part owner of a franchise that touts 321 stores in 40 states.
Or try to envision the surprise inside Talking Rain’s industrial park offices just outside of Seattle when Yormark called on behalf of Roc Nation, trying to ascertain whether the makers of Sparkling ICE, a zero-calorie carbonated flavored water, would be willing to use Durant as a pitchman.
Delzell’s agency, The Marketing Arm, created The Celebrity DBI, a data index that ranks consumer perception of 3,483 athletes and entertainers in a variety of categories such as awareness, appeal, aspiration, breakthrough, endorsement, influence and trendsetter.
For consumers between the ages of 18 and 34, Durant is tops in the NBA in all of the aforementioned categories except awareness. James is known to some degree by 91 percent, while only 53 percent cop to Durant.
In everything else, though, it’s all KD, specifically trend-setter, which the index equates to trust. It’s Durant’s best attribute—he ranks 77th overall. James ranks 754th.
Basically, millennials LOVE Durant.
All of which explains why back in the summer, Nike, to borrow a slogan, decided to “protect its house” from Under Armour and hang on to Durant.