Under Armor's Rookie Endorsement Strategy Could Take Spotlight with Andrew Luck and Robert Griffin III

Under Armor

have been signing endorsement deals with younger unproven talent to try and gain on rival Nike

over the past few years. Nike is almost twelve times larger than Under Armor based on market capitalization. Nike has been signing endorsement deals across all sports since University of Oregon runner Steve Prefontaine signed a deal in 1973. Under Armor, on the other hand, did not start signing athletes to deals until the late 1990s. Recently, Under Armor has led the way in signing deals with rookies in several sports to try and compete with Nike. Two large marketable rookies will be included in the 2012 NFL Draft in Andrew Luck and Robert Griffin III. In 2011, Under Armor won the battle with Nike to sign an endorsement deal with Cam Newton. Under Armor's endorsement with Newton, who was the first overall pick by the Carolina Panthers, has paid off big with his impressive rookie season. Newton passed for over 4,000 yards as a rookie and broke many NFL records for passing and rushing by a rookie quarterback. The endorsement deal was the most ever paid per year to a rookie, breaking the $1 million per year record set in 2006 by Adidas with Reggie Bush. The deal with Cam Newton will be interesting next year as he will appear in Sunday games wearing both Nike and Under Armor apparel. So wait, Under Armor pays Newton over $1 million each year and he still wears Nike? Newton will be required by the NFL to wear a Nike jersey, as Nike becomes the official jersey sponsor beginning next season. This is where I think Under Armor wins in the deal as they do not have the market cap or money to gain the exclusive rights to an entire sport. The company has been targeting colleges, universities, and younger athletes to showcase their merchandise and apparel. Cam Newton will wear Under Armor cleats and will also be allowed to wear Under Armor gloves, which he so far has not worn in his pro career, next season. Along with Cam Newton, Under Armor has NFL players Tom Brady (who was signed when his Nike contract expired), Anquan Boldin, Miles Austin, Ray Lewis, Julio Jones, Santana Moss, and a few others. The company also has six NBA players under contract who are rookies or sophomores in the league. In Major League Baseball, Under Armor signed 2011 number one overall pick Bryce Harper. In hockey, Under Armor has younger players Tyler Seguin and Rick Nash signed to deals. Along with the four major sports, Under Armor has also invested in other sports to further its market share of sporting goods and apparel. Ultimate Fighting Champion Georges St. Pierre signed a deal with Under Armor and is currently the only athlete in the sport of Mixed Martial Arts with Under Armor. In 2012, English Premier League team Tottenham will begin wearing Under Armor soccer jerseys and will become the first major soccer team to showcase Under Armor. Twenty eight colleges and universities have deals with Under Armor including founder Kevin Plank's alma mater Maryland University. In 2011, during a nationally televised college football game, Maryland unveiled some new interesting four color jerseys. The jersey was the talk of the sports world the night of the game and the day after and likely did more good for Under Armor than damage. Andrew Luck, from Stanford University, was a Heisman finalist two seasons in a row. He is widely considered to be the number one pick in next year's draft. Several NFL analysts's coined the phrase “Suck for Luck” this year to show that NFL teams would be doing themselves a favor to lose on purpose so they could take the Stanford Cardinal quarterback in next year's draft. Robert Griffin III, or RG3 as he is sometimes referred to, was Baylor's dual threat rushing quarterback over a portion of the last four seasons. In 2011, Griffin's senior season, he won the Heisman Trophy as the best player in College Football. Griffin III immediately jumps out with comparisons to Newton and since the Heisman Trophy Awards Show has shown his marketability. During the broadcast, Griffin III rolled up his pant leg to show off a pair of Superman socks with a small cape. The socks are from a company known as Bioworld Merchandise. The Twitter universe took notice and pretty soon websites were sold out of the socks. Pairs, which retail for $19.99 when they are in stock, were going on EBay for $50 a pair before Christmas. During an interview on ESPN Sportscenter the following day, Griffin revealed similar Elmo socks made by the same company. Cam Newton had a connection with Under Armor as he wore their merchandise while an athlete at Auburn University. Both Griffin and Luck wore Nike jerseys while attending their schools so it is unclear whether Nike will try and pursue them. My prediction is Nike will try and sign them but Under Armor will outbid them on both players. Under Armor's strategy is clearly working when it comes to endorsements with younger athletes. Nike has the money to pay proven talent knowing they can use them in commercials, magazine advertisements, and in store appearances. Under Armor will spend large money on players that they know are going to get time on television and have their merchandise present and also utilize them in advertisements. It is ultimately the consumers who buy the products Nike and Under Armor put out but having the athletes admired by sports fans around the world is always a clear marketing bonus.