For basketball fans it's hard not to think of the NBA as a " Nike league," given the strong link between the two in the decade and a half since Michael Jordan turned pro. That's why last week's announcement of a 10-year partnership between the NBA and Reebok came as a shock. Under the deal, Reebok will, over the next three years, become the exclusive supplier and marketer of all warmup gear and game uniforms for the NBA and the WNBA, and it will also outfit the NBDL, the NBA's new minor league. In addition, Reebok gets the rights, with limited exceptions, to design and sell NBA apparel (an estimated $200 million business now shared by some 20 companies) and to develop NBA-brand basketball shoes.
The groundwork for this deal was laid three years ago, when Reebok began questioning the value of its slew of athlete endorsement contracts. "It takes heavy spending and marketing to bring a celebrity to light," says Reebok CEO Paul Fireman. "We decided to start backing away from having multiple celebrity endorsers."
While Nike and others would follow suit, none took the strategy as far as Reebok. It chose to drop such stars as Shaquille O'Neal, Emmitt Smith and Frank Thomas and retained only a few high-profile athletes, among them Allen Iverson and Venus Williams. That move helped Reebok focus on broader initiatives. Last December it struck an exclusive 10-year deal worth a reported $250 million to outfit the NFL. Marketing experts estimate the NBA contract to be worth about $175 million.
Nike and the NBA say they'll continue to work together at the grassroots and international levels. Plus, as Nike spokesman Eric Oberman points out, "Nearly 70 percent of the players in the NBA wear our shoes." Still, the Reebok deal is a coup for a company that has long played in Nike's shadow. "It's a real power punch for Reebok," says Nova Lanktree of the Chicago-based Sports Celebrity Network. "Iverson, one of the league's main stars, is a Reebok man, and now Reebok will be all over apparel."