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LeBron's Move To Los Angeles: What It Means For Nike, Adidas And Puma

LeBron's Move To Los Angeles: What It Means For Nike, Adidas And Puma

The only thing more exciting than the NBA playoffs might just be the NBA offseason.

LeBron James' decision to join the Los Angeles Lakers in an unprecedented four-year deal broke an NBA Twitter volume record of 56,000 tweets per minute.

Amid the speculation surrounding a Lakers turnaround, the free agency period is just beginning. The Golden State Warriors wasted little time in firing back, signing superstar DeMarcus Cousins.

Despite the Warriors winning back-to-back championships, all eyes will be on James' first foray into the Western Conference. His impact was immediately reflected in Lakers ticket prices: the average ticket cost at the Lakers 2018 home opener at the Staples Center is up 640 percent year-over-year.

James' decision to move to Los Angeles also marks the first major market the NBA superstar has played in; as arguably the company’s biggest endorser, the move is potentially a key win for Nike Inc (NYSE: NKE), which is already riding high after posting strong fourth-quarter results that drove the stock to new all-time highs.

'I Don't See Much Of A Positive For Nike'

Sneaker expert Matt Powell told Benzinga James' LA move is unlikely to drive further footwear sales for Nike.

“I don’t think it means a heck of a lot to Nike. LA is not an important basketball shoe market; the greater New York City [and] mid-Atlantic region accounts for 25 percent of the country's sneaker sales," the industry analyst said. "LeBron will sell a lot of jerseys there. When Kobe played, he was the No. 1-selling jersey, but he never sold a lot of shoes so I don’t see much of a positive for Nike."

Nike’s recent momentum doesn't come at the expense of adidas AG (ADR) (OTC: ADDYY), Powell said.

“There is no question that adidas is not growing as quickly as they were, but that doesn’t translate to Nike [taking share] from adidas."

Many observers rate James' legacy based on his championship wins; the Michael Jordan comparisons are ceaseless.

Rick Isaacs, who was featured in ESPN's "30 for 30: Sole Man" documentary on Jordan, said James' decision is based on more than the game alone — and that his legacy will be unaffected if he fails to win another championship ring.

“There were other reasons besides basketball in making this move: family was first, business interests second and basketball being third,” Isaacs told Benzinga.

More International Exposure?

Oliver Maroney, NBA writer and host of the "BIG3" show, said the move is good for Nike and the NBA, but James is his own entity. His brand is valuable wherever he plays, Maroney said.

“Pairing LeBron with Magic Johnson [and] a guy like Lakers GM Rob Pelinka — that is a win. They will have his back in business decisions, cross promotion and marketing. Especially now that Nike is the sponsor of the NBA uniforms, the company can parlay this from the jersey sales to the sneakers as well."

Sports attorney Darren Heitner said James' presence in LA will create more international exposure for Nike.

“It is undoubtedly a huge victory for Nike, which will be able to exploit its long-lasting relationship with King James on a much grander scale," Heitner said. "Think about how marketable Kobe Bryant was not only in LA, but also around the world, particularly in China. New merchandise will be selling off the shelves with record pace.”

Puma's Basketball Push Overshadowed By James

Puma AG Rudolf Dassler Sport (OTC: PMMAF) signed several top stars from this year's NBA draft and added Jay-Z as its creative director.

LeBron’s decision and the free agency moves don't diminish the splash Puma has made, said Maroney.

“This doesn’t hurt Puma, and it doesn’t diminish what they did. LeBron takes the newscycle from anybody — that’s just the way it is."

Heitner said Puma effectively ambushed the NBA draft, but the fanfare quickly subsided.

“I don’t think the 'new decision' has any effect on Puma. It is not in any way competing with Nike when it comes to true NBA marketing. Aligning with promising rookies is a long-term play that will take some time for results to be noticed."

Related Links:

Puma Takes Over NBA Draft Conversation With Basketball Footwear Push

Nike Receives Downgrade Ahead Of Q4 Print; Analyst Says 'Puma Hoops Worth Monitoring'

Photo credit: U.S. Air Force, Airman 1st Class Daniel Hughes


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