By Barry Janoff
March 16, 2015: The ears of executives at Nike and Under Armour are certainly burning with the news that rival adidas has decided not to renew its official alliance with the NBA with their deal expires at the end of the 2016-17 season.
The company's current pact as official jersey supplier to the league dates back to 2006, when adidas and the NBA signed an 11-year contract valued at $400 million, according to industry analysts.
For the five years prior to that, the NBA's jersey supplier had been Reebok, which was acquired by adidas in 2005.
The decision comes as adidas, which already had been second to Nike in U.S. retail sales of footwear and sports apparel, fell to third in 2014 behind hard-charging Under Armour.
It also coincides with the company's announced decision to find a successor to CEO Herb Hainer, whose contract expires in 2017.
The NBA has not made an official comment.
"While we have enjoyed a successful long-term relationship with the league, we continually review our partner agreements to ensure they are meeting our investment and delivering on our brand and business needs," Lauren Lamkin, a spokeswoman for adidas, said in a statement.
According to adidas via Lamkin, "We are reimagining and reshaping our business and have evolved our strategy to look at new, cutting-edge ways to drive our brand and support our business over the long term. We will invest more in telling stories that matter to our consumer, building category-disrupting innovative products, reinvigorating youth basketball with our new Next Generation programs and doubling our roster of professional athletes to authenticate our brand on-court."
Adidas said it would not leave the basketball business but instead would focus on signing athlete endorsers, new products and high school and college alliances.
Adidas currently has deals with such NBA players as Derrick Rose, Damian Lillard, Dwight Howard, Jeff Teague and Tim Duncan.
It has not helped adidas' hoops image that Rose has been injured for much of the past four seasons with the Chicago Bulls, playing in just 95 of a possible 315 regular-season games (to date) since 2001-12, including missing all of the 2012-13 campaign
Howard, meanwhile, has played in just 32 of the Houston Rockets games to date this season and also has missed parts of each of the three previous seasons due to injuries with the Rockets, Los Angeles Lakers and Orlando Magic, including missing 27 games in 2011-12.
Adidas has an alliance with Major League Soccer that runs through 2018.
Reebok is in the midst of a long-term deal with the NHL that expires after the 2016-17 season. Adidas has not commented on whether or not it would renew that contract.
Chris Grancio, global basketball manager for adidas, told the Portland Business Journal, "We haven't been able to elevate our brand for the basketball consumer that we're targeting. We ultimately decided that we would change our investment strategy and invest more in players on the court."
Should Nike decide to pursue and then ultimately win the NBA contract it would be a case of déjà vu. In 2010, Nike signed a five-year deal with the NFL to replace Reebok as the league's official uniform supplier, which began in 2012. It was extended this month to run through 2019.
"We are reimagining and reshaping our business and have evolved our strategy to look at new, cutting-edge ways to drive our brand and support our business."
Nike and its Jordan Brand division are by far the biggest supplier of shoes to NBA feet, with more than 300 players combined. Adidas has about 70 and Under Armour about 15, according to HoopsHype.com
Nike endorsers include LeBron James, Kobe Bryant, Kyrie Irving, James Harden, Kevin Durant and Chris Bosh.
Jordan Brand endorsers include Chris Paul, Russell Westbrook, Carmelo Anthony, Blake Griffin, Kawhi Leonard, Joe Johnson and Michael Kidd-Gilchrist, as well as the iconic and stillhigh-profile Michael Jordan himself.
Under Armour recently stepped up its NBA presence via a deal with Stephen Curry of the Golden State Warriors, which includes both Under Armour's and Curry's first signature hoops shoe line.
In addition to Curry, Under Armour has deals with such NBA players as Brandon Jennings, Kemba Walker and Greivis Vasquez.