Money pours in
James agrees to $90 million endorsement deal with NikePosted: Wednesday May 21, 2003 10:18 PM
Updated: Thursday May 22, 2003 10:36 PM
AKRON, Ohio (AP) -- LeBron James went to school Thursday with enough lunch money for everyone.
The hyped high school senior and expected No. 1 pick in next month's NBA draft, signed a multiyear endorsement deal with Nike worth over $90 million, a risky move by the shoe and sports apparel giant that helped make Michael Jordan famous.
Nike won a heated bidding war against sneaker rivals Reebok and Adidas to sign the 18-year-old James, considered a possible successor to Jordan on the floor and on Madison Avenue.
"It truly came down to which company LeBron was most comfortable with," said Aaron Goodwin, his agent. "Up until the end, I thought we were going with Reebok."
Terms of the deal were not released, but a source close to James, who spoke on condition of anonymity, told The Associated Press the deal was for seven years and valued at more than $90 million.
James' choice of Nike, a $10 billion company and the market leader in athletic shoes, closed a frantic final week of negotiating by Goodwin with representatives for all three companies bent on signing the 6-foot-8 St. Vincent-St. Mary star.
Despite the huge deal, James didn't miss classes after signing the contract, driving his pewter-colored Hummer to school and parking it in the lot.
"Nike is the right fit and has the right product for me," James said. "They are a great group of people who are committed to supporting me throughout my professional career, on and off the court."
James' deal dwarfs any of the previous initial contracts given to a young, unproven player who is skipping college and has yet to shoot his first jump shot in the NBA.
"There's no question about it, there is a tremendous risk here," said John Horan, publisher of the Sporting Goods Intelligence newsletter.
Nike's package includes a personal shoe and apparel line for James, who will have artistic input into his sneaker model, Goodwin said.
After Adidas pulled out of negotiations early Wednesday, Goodwin said representatives from Reebok and Nike pushed hard, hoping the other would buckle. Reebok reportedly offered $75 million.
James' deal is believed to be the richest ever given as an initial endorsement contract. It is also nearly on par with the five-year, $100 million deal Nike gave Tiger Woods in 2000.
When Jordan signed his first contract with Nike in 1984, it was for $2.5 million over five years. Shaquille O'Neal received $3 million from Reebok in 1992. Four years later, 17-year-old Kobe Bryant skipped college and got $5 million from Adidas.
Reebok signed Allen Iverson to a $50 million lifetime deal in 1996, and Tracy McGrady, another player who went to the NBA straight from high school, signed a six-year, $12 million contract with Adidas in 1997.
Combine those five, and they still don't equal James' deal. Before his first dunk, he's already soaring over some of his peers.
Bob Williams, president of Burns Sports & Celebrities, a marketing group which matches athletes with advertisers, said Nike had no choice but to extend itself.
"This was a full-blown, all-out price war," he said. "Nike won it. I think that Nike is the leader in the industry, and the leader in the industry cannot have a player with the potential of LeBron James sign with a competitor."
Nike signed Carmelo Anthony to a shoe and apparel deal on Tuesday. Anthony, who led Syracuse to the national championship in April, is a close friend of James and projected to be taken second in the June 26 draft.
James also signed an exclusive multiyear contract with Upper Deck trading cards Wednesday. That deal includes a $1 million signing bonus.
Of the three companies, Nike got the final chance to make a lasting impression with James, his mother, Gloria, and Goodwin. The group spent last weekend at Nike's corporate headquarters in Beaverton, Ore., where the company made its final presentation.
James had previously seen offers from Reebok and Adidas, whose final push included putting up billboards and placing messages on buses in Akron directed at James.
Goodwin denied that getting the shoe deal signed before the draft lottery was a priority.
"That had nothing to do with it," Goodwin said. "We just
wanted the right fit, and it turned out to be Nike."