Cleveland Cavaliers forward Lamar Stevens has signed an endorsement deal with Nike, agent Scott Nichols told HoopsHype’s Michael Scotto.
Cleveland Cavaliers small forward Lamar Stevens has signed an endorsement deal with Nike, agent Scott Nichols of Rize Management told HoopsHype.
It marks the first endorsement deal for Stevens.
After going undrafted out of Penn State in 2020, Stevens earned a two-way deal with Cleveland. Stevens then carved out a rotation role with the Cavaliers, and his contract was converted into a multi-year NBA deal. He appeared in 40 games last season.
Stevens is expected to remain a part of Cleveland’s rotation as a wing off the bench this season.
Charlotte Hornets guard LaMelo Ball, who won NBA Rookie of the Year this past season, is scheduled to release his first signature shoe.
Charlotte Hornets guard LaMelo Ball, who won NBA Rookie of the Year this past season, is scheduled to release his first signature shoe.
Ball, who has been a fan favorite since he was a high school superstar at Chino Hills in Southern California, was always destined to draw intrigue when he signed a sneaker deal because of his off-court popularity.
The 19-year-old was signed to his family-owned Big Baller Brand until leaving the company to sign with Puma in Oct. 2020. He rocked the Puma Clyde All-Pro sneakers on the court during his first year with the Hornets. But it was only a matter of time before Puma was going to let Ball use his platform for his own line.
After an impressive debut campaign in the NBA, however, the hype surrounding the upcoming release for Ball is greater than ever. He will ride that momentum into the 2021-22 season and will be rocking his signature shoe in the process.
Phoenix Suns guard Langston Galloway discussed his future heading into NBA free agency and what’s next for his Ethics sneaker brand.
Langston Galloway entered the league fighting to maintain a roster spot with the New York Knicks on 10-day contracts. Seven seasons later, Galloway’s work ethic helped him earn nearly $30 million in contracts and was the inspiration for Ethics, his new sneaker brand.
Following a trip to the NBA Finals with the Phoenix Suns, Galloway discussed his free agency future and what’s next for Ethics with HoopsHype.
Golden State Warriors rookie James Wiseman has signed an endorsement deal with ANTA.
After being drafted with the second pick in the 2020 NBA Draft, Golden State Warriors James Wiseman has checked off another career milestone. The rookie big man has signed an endorsement deal with Chinese sportswear company ANTA, first reported by ESPN’s Nick DePaula.
According to DePaula, Wiseman will headline ANTA’s upcoming Project Z-Up line.
OFFICIAL: Warriors rookie James Wiseman has signed with ANTA.
Before he makes his highly-anticipated return to the court, Klay Thompson will be wearing a new set of Bruce Lee themed Anta KT6 shoes.
Before he makes his long-awaited return to the Golden State Warriors starting lineup, Klay Thompson is dropping a new pair of kicks. With his new set of signature shoes, the Warriors three-time All-Star will be honoring a martial arts legend.
According to ESPN’s Nick DePaula, Thompson is releasing a new pair of his Anta KT6 signature shoe with a Bruce Lee theme. The new pair of kicks are primarily yellow with black accents — a perfect match for the Golden State Warriors uniforms.
Along with the Lee themed colorway, there’s a quote from the famous martial arts movie star striped on one side of the shoe. The KT6 “Dragon” reads, “water can flow or crash, be water my friends.”
On this episode of The HoopsHype Podcast, Alex Kennedy is joined by Michael Sykes, who writes about sneakers for USA TODAY’s For the Win (including his newsletter “Kicks You Wear”). They discuss how sneaker sales have plummeted recently, what impact “The Last Dance” is having on Jordan Brand, the sneaker-brand landscape, how shoe companies influence NBA moves and more. Time-stamps are below!
:35: Footwear, as a whole, is projected to plunge in revenue by 79 percent due to the pandemic. And adidas is projecting a 93 percent decrease in first-quarter profits. Michael discusses the state of the sneaker industry.
4:00: Jordan Brand recently released the ‘Fire Red’ Jordan 5s when the first episode of “The Last Dance” premiered and they sold out in minutes. Is there a gap between Jordan Brand and all of their competitors? And how is “The Last Dance” impacting Jordan Brand?
9:45: Even before this pandemic, sneaker sales were dropping due to the popularity of athleisure shoes. Michael talks about this and whether the basketball-shoe market is cyclical.
15:20: Michael discusses how sneaker culture has blown up and become more mainstream in recent years (and how the internet and social media have played a role in that).
18:05: There are so many sneaker brands aside from Nike, adidas and Jordan Brand (such as Under Armour, PUMA, New Balance, AND1, Converse, Li-Ning, Anta, Peak and Q4). With this landscape, is this the best time for players to become sneaker free agents?
19:40: Michael would love to see a notable NBA player create his own shoe brand and do it right because he’d make so much money. He also discusses why it would be somewhat challenging.
26:15: With Joel Embiid’s upcoming signature shoe with Under Armour and Zion Williamson’s big deal with Jordan Brand, could we see sneaker companies change how they feel about big men and whether they can sell shoes?
31:30: The Chinese shoe companies like Li-Ning, Anta and Peak typically offer players the most money, so that they can compete with juggernauts like Nike and adidas. Michael discusses whether we’ll see more and more players take the payday and sign endorsement deals with these companies.
35:50: One NBA general manager told HoopsHype that today’s players are often more loyal to their sneaker company than their NBA team. Michael discusses this and whether it’s true.
39:20: Alex and Michael talks about how sneaker companies impact NBA free agency and the draft. Not only are players given incentives if they join big-market teams, their pay is sometimes reduced by as much as 20 percent if they land in certain smaller markets.
HoopsHype’s new series gives an inside look at shoe deals, with part four focusing on the biggest misconceptions about the sneaker industry.
This is part four of a four-part series that gives readers a behind-the-scenes look at shoe deals and the sneaker free agency process, with insight from various NBA agents, sneaker executives and industry experts. Check out part one here, part two here and part three here.
In recent years, fans have become much more knowledgeable about shoe deals and the sneaker-free-agency process. Top media outlets like ESPN and Yahoo! Sports have ramped up their coverage of the sneaker world as whole, hiring industry experts like Nick DePaula to break news and provide terrific analysis.
Also, social media allows sneakerheads to be more informed than ever. Not only can fans follow their favorite brands and players, top NBA reporters treat sneaker-deal terms as breaking news and it’s in their feed alongside other scoops (like trades and free-agent signings). Most people initially learned of Zion Williamson’srecord-breaking rookie deal with Jordan Brand when Adrian Wojnarowski tweeted it to his four million followers.
However, there are still quite a few misconceptions about sneaker deals and the industry as a whole, according to various NBA agents and shoe-company executives who spoke to HoopsHype.
“Fans think that every player is making millions of dollars and that every superstar player is making crazy money from their sneaker deal and that’s not the case,” one NBA agent said. “A lot of guys are in six-figure-and-below deals and when you’re looking at what a typical NBA player makes, that’s not anything to them. The guys who are in the millions are in a very rare class. There are the guys who have signature shoes, but the number of guys who make royalties or have minimum-guaranteed royalties from their signature shoe is even smaller.
“There aren’t many guys who make $10 million per year or more from their sneaker deal and that’s around the average NBA salary now, so the impact that the sneaker deals have on these guys and how they operate isn’t as significant as people think. It’s good money, but it’s not crazy (in most cases).”
Fans often overestimate how much players are making if they’re with a company like Nike or Jordan Brand. The public was surprised to learn that Kawhi Leonard was making less than $500,000 from Jordan Brand (before leaving for New Balance). Jimmy Butler was getting a similarly small paycheck from Jordan Brand before becoming a sneaker free agent.
But it’s not just the fans who do this. Sometimes, players believe they’re going to get a ton of money from their sneaker contract only to be disappointed when that’s not the case.
“I think there’s this expectation that everybody gets a big shoe deal, but not everybody can get that kind of contract,” NBA agent Roger Montgomery said. “I think that misconception hurts agents sometimes because every player thinks they can get a huge sneaker deal because they’ve heard about some of these big deals that other players got. They may just get a merch deal that only gives them free product. It’s still a shoe deal, but it’s not the piece of the pie that they expected.”
Sometimes, rival agents prey on a player’s unrealistic expectations. Rival agents constantly try to poach successful players away from their peers. They usually try to persuade the player and his inner circle that the current agent did a poor job negotiating their contracts and that they’d be able to get the player significantly more money from their shoe company or NBA team.
Even certain All-Stars have trouble getting a lucrative shoe deal because the brands are looking for certain positions and styles of play (as we covered in part two of this series). For big men, especially those in small markets, it can be very difficult to get a big payday from a sneaker company.
“A player may be an All-Star, but that doesn’t necessarily mean that he can sell sneakers,” one sneaker-company executive said. “Sometimes, an agent will say, ‘My player was an All-Star, so he deserves to be paid like these other All-Stars!’ Well, a sneaker company is mainly focused on whether he can sell sneakers and being an All-Star doesn’t guarantee anything. Also, something I see a lot is when a player signs a big contract, their agent will try to come to the sneaker company and say, ‘Look at the deal he signed with his team! He deserves a bigger shoe deal!’ He may be a great player and have a big NBA contract, but, again, it doesn’t mean he can sell sneakers. These things come across my desk and I’ll see how much some of these guys want and I’m just like, ‘What?!’ He may be a dynamite player, but I don’t care; I need guys who can move sneakers.”
In 2018, an Eastern Conference general manager told HoopsHype that some NBA players are more loyal to their sneaker brand than to their NBA team. After all, it’s not uncommon for a player to be with the same shoe company for their whole career, but bounce around from NBA team to NBA team.
“A player may make more money from their shoe deals than from their NBA deals over the course of their lifetime,” the GM said. “You wonder, ‘Who is the player loyal to?’ Suddenly, the shoe company may become a factor when decisions are made. Because there’s no salary cap in those negotiations, a company like Nike can give a player as much money as they want and as long of a contract as they want [whereas] NBA teams obviously can’t do that. The relationship between the player and his shoe company is probably more stable and long-lasting than the player’s relationship with their franchise too. There are plenty of examples of players who have lifetime shoe deals, so it can be a relationship that continues long after the player has retired. It’s more common to see a player change teams than change shoe brands.”
When asked about this idea, there was some agreement and some push-back.
“It sounds weird to say, but there are some guys who really do have a family-style relationship with the people from their sneaker brand,” DePaula said.
“I think people who jump to the conclusion that players are more loyal to their sneaker brand than their NBA team must be on the outside looking in at the sneaker business,” one NBA agent said. “A lot of guys are upset with their sneaker company – they sometimes don’t have the best relationship with their sneaker company despite getting paid a lot of money from them and being with them for a long time. I don’t want to name names, but there are players who would surprise you that are upset and who don’t necessarily have a great relationship with their sneaker brand. It’s almost the same way they look at their team like, ‘They were the ones who could pay me the most money and since it was the best offer business-wise, that’s why I signed it.’ Some players are very loyal to one brand and some have a great relationship with their sneaker company, but you can’t always make that assumption.”
“I think it is hard to compare the two relationships,” former NBA agent Matt Babcock added. “A commitment to a team means that the player is required to team up with specific players and coaches, so there’s a direct correlation with that player’s career success. It also determines where that player and his family live. It is a very involved commitment. On the other hand, a commitment to a shoe company is significantly simpler. A player can wear the shoes wherever he wants and they just need to change the color of the shoes if he switches teams.”
One final misconception is that the United States’ basketball-sneaker market is booming right now. In reality, sales have been down recently.
“Trends are very cyclical,” one NBA agent said. “After Michael Jordan, shoe companies were chasing the success of his sneakers and giving out a lot of signature deals in the ‘90s. But when LeBron James first entered the NBA in 2003, the basketball-shoe market was down. Then, it exploded around the time of the 2008 Olympics. The market was exploding until we got to this recent trend of athleisure/minimalist type of stuff that everyone is wearing. Now, there’s a big focus on running shoes, NMD-type shoes and minimalist shoes, so basketball shoes aren’t really in style right now. That’s kind of been the issue.”
“You have to understand the marketplace over the last three years and see why companies made the decisions that they made,” Montgomery added. “We have to figure out what these companies are trying to accomplish. It’s the same thing we have to do with NBA teams. A team may have cap space, but they may want to hold onto that space for the future. These shoe companies have a budget and, each year, that budget changes. It’s just like the salary cap. If a company is coming off of a not-so-great year, they may be thinking, ‘This year, we’re going to pull back a bit and not spend as much.’ If a company is coming off of a great year, they may be thinking, ‘What we’re doing is working, so we’re going to keep the same strategy and spend again.’ What we have to do as agents is understand each company’s strategy.”
Be sure to check out part one (breaking down the types of shoe deals), part two (detailing shoe-deal negotiations) and part three (taking a look at the sneaker-free-agency process) of this series.
HoopsHype’s new series gives an inside look at shoe deals, with part three focusing on what happens when a player is a sneaker free agent.
This is part three of a four-part series that gives readers a behind-the-scenes look at shoe deals and the sneaker free agency process, with insight from various NBA agents, sneaker executives and industry experts. You can read part one here and part two here.
When a player’s shoe deal expires and they become a sneaker free agent, what happens next?
Typically, a shoe deal is structured to expire on October 1. Most have language that allows the incumbent brand to offer an extension to the player in the spring. If he turns down the extension to weigh his options, he can start meeting with rival brands and hearing their pitches after August 1 (since that’s 90 days before the contract expires).
Almost every sneaker contract has a match clause, which allows the incumbent brand to match an offer sheet that the player receives (like restricted free agency). Typically, the incumbent brand has 10 days to match. Let’s say a player wants to leave Nike to sign an offer sheet with adidas. Nike would have 10 days to match the offer sheet. If Nike matches, they keep the player; if Nike declines, the player would join adidas.
“The match clause is very much a relationship thing, and Stephen Curry is the most famous example of this,” ESPN’s Nick DePaula said. “He signed an offer sheet with Under Armour and the Nike guy called Steph and they had heart-to-heart. The Nike guy said, ‘Hey, normally we would match this because we value you as a player, but do you really want to leave? Where is your head at?’ And Steph said that he really wanted to go to Under Armour to try to build his own thing. Nike basically said, ‘Alright, cool. We respect that, so we’ll let you go.’ They got a lot of heat for that (hindsight is 20/20), but if a player really wants out, they’ll sometimes let him go.”
Like NBA teams during free agency, sneaker companies recruit players and put together elaborate, personalized presentations in an effort to impress the individuals they’re pursuing.
Perhaps the most popular sneaker-free-agency recruiting story is Nike botching their meeting with Curry and his family when the star point guard was considering a move to Under Armour. One Nike official mispronounced Curry’s name (saying “Steph-on” rather than Stephen) and they accidentally left Kevin Durant’s name on one of their PowerPoint slides, making it obvious that they had just repurposed a previous presentation. “I stopped paying attention after that,” Dell Curry told ESPN’s TrueHoop.
When it was Under Armour’s turn to meet with Curry, they did it at his home in Charlotte. Knowing that Curry is a big family man, they included his family in their pitch quite a bit, per DePaula. For example, they mocked up special colorways of their next team shoe to honor his various relatives (such as a Mother’s-Day colorway that showed love to his mom, Sonya).
“When adidas is doing their rookie pitches, historically, they rent a crazy mansion in the Hollywood Hills and bring a player in for three hours,” DePaula said. “They’ll have a chef, a ping-pong table and video games to create a hang-out atmosphere where they’ll get to know the player (and vice versa). They’ll let the player bring his family and friends and agent. They really try to develop a relationship with the player. Also, adidas has gotten some of their artists (like Pharrell or Snoop Dogg) to record a personalized message for players and have them talk about how they’re excited for them to join the family.”
New Balance has a 30-to-40-foot digital billboard that’s in the lobby of their building and when they’re recruiting a player, they’ll play a special video message for them when they arrive.
AND1 develops a logo for the player, shows them designs for PE colorways and discusses their custom marketing plan for the individual. They also stress that players can keep their own personal brand and AND1 will even help promote it. Fred VanVleet, who recently signed with AND1, has a brand called ‘Bet on Yourself’ and he sells clothes, hats, wristbands and other items online and in his own store in his hometown of Rockford, IL.
“A lot of guys are coming into the league with their own brand,” said AND1’s head of sports marketing Dexter Gordon. “The whole landscape is changing with these young guys. They’re businessmen now. You have to look at these players as partners like, ‘You’re going to help us build our brand and we’re going to help you build your personal brand too.’ Sometimes, that means doing a collab. Sometimes, that means letting a player wear some of their own stuff during AND1 photoshoots. We’re going to teach you about the business too. Fred came in with his own brand, ‘Bet on Yourself,’ and we love it! We would never tell him that he can’t do that.”
Every company has a different approach. These days, players have a ton of options when they hit sneaker free agency. Nike, adidas and Jordan Brand are still on top, but many competitors are now in the space including Under Armour, PUMA, New Balance, AND1, Converse, Li-Ning, Anta, Peak and Q4 among others. Agents are welcoming these brands with open arms, as it only helps them do their job.
“I think it makes it easier because you have more leverage based on the fact that you have more suitors for the player,” one top NBA agent said. “It gives you a better sense of what the market is before you talk to the bigger companies and it gives you more options so if you can’t get what you want from the bigger companies, there’s a range of other companies that can still give your client a great deal. That goes for the domestic companies (like PUMA, New Balance and AND1) and the Chinese companies (like Anta, Li-Ning and Peak).”
“Anytime you have more brands and more opportunities, it’s going to make things easier for the athlete and the agent because now you have more offers to look at,” Montgomery added.
Despite the increasingly crowded market, Nike and Jordan Brand know that many players have always dreamed of signing with them and they use this to their advantage. Typically, Nike and Jordan offer the least amount of money because of their unique position.
“Usually, Nike and Jordan Brand are the last to pitch because they want to let everybody else set the market first and then their offer will usually be the lowest since many people have an affinity for their brand,” DePaula said.
“Nike and Jordan Brand usually have an advantage because many players grew up with their product and love the brand,” one top NBA agent said. “In many cases, players are willing to take less money just because they want to be associated with Nike or Jordan as opposed to other companies. These companies often know your client’s preferences and that just gives them a leg up in negotiations.”
But if a player joins Jordan Brand, they get a ton of free gear sent to them every few months and they can wear their favorite shoes during games. Also, the Jordan Brand family goes on an annual summer trip exclusively for their athletes and their loved ones. In recent years, they’ve been to Monaco, Mexico and the Bahamas to name a few. For some players, these things outweigh the additional cash.
“If you grew up with a Michael Jordan poster on your wall and then you’re about to enter the NBA and you get an offer from Jordan Brand, I totally get it!” Gordon said. “That’s every kid’s dream, being able to get all of the Jordans they want. MJ is an iconic person and they feel like, ‘Wow, he wants me!’”
On the other end of the spectrum, Chinese brands (such as Anta and Li-Ning) usually offer the most money. They understand that most players are unfamiliar with their brand and that the only way they can compete with companies like Nike and adidas is to write a bigger check.
“The Chinese brands are typically coming in with the higher offers; that’s been the case for a while now,” DePaula said. “But, for the most part, a lot of the brands are usually in the same ballpark when it comes to their offers. I can’t think of too many times when one brand’s offer was leaps-and-bounds higher than another brand’s offer.”
“An agent needs to keep a pulse on the marketplace to see which companies are prepared to make aggressive plays in any given year,” former NBA agent Matt Babcock added.
One agent pointed out that while many players enter the league wanting to sign with Nike or Jordan because of their love of those shoes, their priorities tend to change once they’re a veteran. By the time they are on their second deal, they may just want to take the biggest offer.
“A lot of these kids get to the NBA and they want to play with an official NBA basketball from Spalding, wear an authentic NBA jersey and play in Nike shoes,” the agent said. “For some kids, it’s what they’ve been looking forward to their whole life. However, by the time some of these players get to their second sneaker contract, they’re now more open to other brands and want to make as much money as they possibly can – even if they were a huge Nike fan. We saw that with D’Angelo Russell and Kyle Kuzma, who were complete Nike guys. They loved Nike, but they went in a different direction because they wanted to make more money. Russell signed with Li-Ning and Kuzma signed with PUMA.”
In some cases, the primary NBA agent negotiates their clients’ sneaker deals himself. For example, Aaron Goodwin is the primary agent at Goodwin Sports Management, but he’s known for negotiating excellent shoe deals; he did LeBron James’ rookie deal with Nike, Kevin Durant’s rookie deal with Nike and all of Damian Lillard’s deals with adidas. Other agencies have someone whose sole focus is sneaker-and-endorsement deals.
“It varies from agency to agency,” DePaula explained. “CAA has one person who specifically does shoe deals, Lloyd Frischer, and he’s done a great job. He did Joel Embiid’s deal with Under Armour, Dwyane Wade’s lifetime deal with Li-Ning, Donovan Mitchell’s extension with adidas, Paul George’s signature-deal extension with Nike, Zion Williamson’s deal with Jordan Brand and Kyle Kuzma’s deal with PUMA. That’s six deals with six different brands! They’re strong deals across the board too. Priority Sports has a guy who specifically does shoe and marketing deals too; he did Gordon Hayward’s deal with Anta. It just depends on the agency.”
Sneaker free agency doesn’t always go the way a player expects, which we’ll cover in part four of this series that focuses on the biggest misconceptions about shoe deals.
Be sure to check back later this week for part four of this series.
HoopsHype’s new series gives an inside look at shoe deals, with part two focusing on the negotiations and incentives in sneaker contracts.
This is part two of a four-part series that gives readers a behind-the-scenes look at shoe deals and the sneaker free agency process, with insight from various NBA agents, sneaker executives and industry experts. You can read Part 1 here.
When an NBA executive and an agent are negotiating an NBA contract, they are restricted by the salary cap and they must follow all of the rules outlined in the Collective Bargaining Agreement. When a sneaker-company executive and an agent are negotiating a shoe deal, there are no such restrictions, which allows both sides to be very creative during the talks.
Nowhere is this creativity more evident than in the incentives that are included in shoe deals. When sneaker deals leak, we often hear that the player will earn “up to” a certain amount. That’s because there are a ton of performance-based bonuses included in most deals, so it’s difficult to project exactly how much money the player will actually take home.
There are individual incentives for averaging certain stats, leading the NBA in scoring, playing a certain number of games, winning an end-of-season award (such as MVP), making an All-Star team, All-NBA team or All-Rookie team and so on. There are also team-based bonuses for winning a certain number of games, making the playoffs, advancing in the postseason, making it to the NBA Finals, winning a championship (and playing a certain number of minutes), etc.
According to ESPN’s Nick DePaula, players sometimes earn $300,000 for being selected as an All-Star, $250,000 for winning the dunk contest and $25,000-to-$50,000 for participating in an All-Star Saturday contest. When players are snubbed from the All-Star Game and other honors, part of the reason why they’re often upset is because they are missing out on a lucrative bonus.
There are also reductions that are negotiated into these deals. For example, it’s common for contracts to have a games-played threshold where the player will actually lose money if they don’t play in a certain number of contests (and 60 games is commonly used). Also, one brand does a threshold bonus where a player can earn a $250,000 bonus if their points per game and rebounds per game add up to 26 or higher, according to DePaula. But if their point average and rebound average add up to fewer than 16, there’s a $250,000 reduction.
Interestingly, some companies include a small-market reduction as well. Just as brands give players a bonus for being in a large market (such as Los Angeles or New York), they’ll significantly dock their pay if they land in certain small markets. Players are essentially being fined for ending up in a small-market city, even if it’s not the player’s choice.
“I’ve seen some brands include a 20-percent reduction for landing in certain small markets,” DePaula said. “I know for a fact that one brand had Sacramento and Orlando among others on that list of markets.”
“Yes, that’s definitely a clause that exists in contracts,” one shoe-company executive confirmed on the condition of anonymity. “There are bonuses or reductions based on the player’s market. If the player goes to a major market like New York, Los Angeles, Chicago or Miami, the brand is going to get more exposure. They’ll be playing in more nationally televised games and get more media coverage.”
Keep in mind, this is all up for negotiation, so an agent can push back against a small-market reduction if they don’t want it in the contract.
“It’s a give-and-take,” one NBA agent said. “If you’re going to allow a reduction like that to be put in place, what are you getting in return that makes it worth it to include that? The main reduction incentives that you see in sneaker contracts (and all endorsement contracts) are related to injuries. If a guy isn’t playing, there are opportunities for brands to roll back their pay. There are also moral clauses, where the player’s contract could be affected if the player does something of moral turpitude.”
Sneaker companies often prefer giving a player an incentive-laden deal rather than a large guaranteed salary.
“Now, a lot of brands don’t want to pay big base salaries,” said AND1’s head of sports marketing Dexter Gordon. “If you sign a guy to a deal with a big base salary and he has a bad season, you’re locked into paying that base salary and you’re like, ‘Ugh.’ If it’s an incentive-laden deal, it’s safer. If the player does well, they’ll make more money and everyone from the brand is happy too.”
Even if a player signs an incentive-laden deal, they’ll still have a base salary of some sort and that must be negotiated as well. While NBA salaries are available to the public, it’s tougher to find out contract details when it comes to endorsement deals. So, how do agents come up with an asking price and ensure that their client is getting a fair deal?
“You try to find what the market is and while it’s not definitive like it is when you’re negotiating an NBA contract, you hear rumors and dig for information to find out what other players were paid,” said a top NBA agent. “You also have to talk to every company. By having conversations with every company as opposed to just one or two, you get a valuation and understand what the market will bear for that particular client.”
“Larger agencies have a clear-cut advantage when determining market values for players,” former NBA agent Matt Babcock said. “They will naturally have a better grip on the marketplace, as they engage in more negotiations with each shoe company due to representing more clients.”
Sometimes, an agent has to think outside the box when trying to sell a brand on their client.
“If your guy isn’t a star, it’s your job to drum up interest by finding your player’s niche and focusing on that,” one NBA agent said. “Maybe your player is in a market that Nike wants to be in because they don’t have any players on that team. There are also certain guys who fall into a streetwear or cultural-ambassador category, where it’s more about off-court appeal than anything. With those kinds of guys – like PJ Tucker and Nick Young – you approach the negotiations differently. You need to figure out an angle or niche to be able to sell your guy to brands.”
In addition to incentives and base salary, agents also negotiate what the player’s product allowance will be, whether they’ll have a signature shoe (and, if so, the royalties associated with that), the company’s charitable support (as some players seek support for their AAU team or camps) and so on. There are other details that need to be ironed out too. Will the player be making any appearances? Will he be in any commercials or activations? Will the player go on an offseason tour to promote the brand (and, if so, will he be going overseas)?
Every agent mentioned that their client’s position and style of play have a significant impact on negotiations and how the player is perceived by the shoe companies. Many big men around the NBA are on merch deals. By now, you’ve probably heard the adage: “Big men can’t sell shoes.”
“I think that’s how a lot of companies think,” AND1’s Gordon said. “When you’re trying to sell to consumers, especially kids, they identify more with guards. Not many kids are going to grow up to be Shaquille O’Neal. But if you have a guy like Stephen Curry or, our guy, Fred VanVleet, a kid can say, ‘Hey, if I work hard, I can become that.’ I mean, Steph Curry looks like a high school kid! (laughs) The consumers we’re targeting can identify more with guards. Also, guards are exciting! A lot of kids don’t see back-to-the-basket bigs as exciting.”
For many years, sneaker companies primarily went after guards. In recent years, unicorns like Giannis Antetokounmpo and Kevin Durant have emerged, so now brands target “perimeter players.” However, with Joel Embiid getting his first signature shoe later this year and Zion Williamson just signing the richest rookie deal since LeBron James, could this be the year that big men prove that they can sell shoes and force companies to update their approach?
“Joel Embiid’s signature sneaker is going to be a really interesting case study because there’s no current center that has a signature shoe, so we’ll see how that does,” DePaula added. “What Joel brings is his ability to go viral on social media whenever he wants. I think there’s some validity to the phrase, ‘Big men can’t sell shoes.’ It is fairly true. We’ll see if Joel can break the mold because, historically, it’s been challenging for them.”
Be sure to check back later this week for part three of this series, which looks at what happens during the sneaker-free-agency-process, how brands recruit players and more.
HoopsHype’s new series gives an inside look at shoe deals, with part one focusing on the three different tiers of sneaker deals.
This is part one of a four-part series that gives readers a behind-the-scenes look at shoe deals and the sneaker-free-agency process, with insight from various NBA agents, sneaker executives and industry experts.
Today’s NBA players are earning tremendous sums of money from their respective teams, but that’s not their only revenue stream. Many players also get a substantial paycheck from their sneaker deal (and other endorsements). In some cases, that’s where players are earning their biggest paycheck.
“There are some players who make more money from their sneaker deal than their NBA contract,” one NBA agent said, pointing to examples like Derrick Rose (who makes more from adidas than the Pistons) and Kyle Kuzma (who makes more from PUMA than the Lakers).
HoopsHype’s new four-part series delves into the sneaker business. First, we’ll focus on the different types of shoe deals. There are three tiers: signature deals, cash deals and merch deals. Here’s a breakdown of each type of deal:
These are for the league’s biggest stars, as there are only 17 players who currently have a signature shoe. These individuals either have their own sneaker or one in development (since the process takes 16-to-24 months). According to ESPN sneaker expert Nick DePaula, signature deals typically pay players a base salary between $5 million and $15 million per year (depending on the player) plus bonuses from a wide variety of incentives.
These players typically get a five-percent royalty on all of their footwear and apparel sales (although the percentage is negotiable). Players also get a product allowance, which determines how much free gear they will receive. When a player has a signature shoe, there’s constant communication with the sneaker company to go over ideas, colorways, samples, etcetera.
DePaula notes that the biggest stars (like LeBron James) often have multiple models that are released each year and these models all have different technology, price points and distribution. When you consider that James earns a large base salary, bonuses from incentives and royalties from all of his models and apparel, it’s clear that he’s getting some big paychecks from Nike.
Despite the fact that there are just 17 players with their own signature shoe, 65 percent of the NBA wears a signature sneaker model of some sort, according to DePaula.
“So many players around the league are wearing Kyries or Kobes or another signature shoe,” he said. “There are about 20 players who are currently wearing adidas’ Dame 4s. When you have a signature shoe, not only are you wearing it, many people around the league wear it and give visibility to your name.”
There are roughly 70-to-100 players around the NBA who are on a cash deal. These players can make anywhere from $200,000-to-$300,000 per year on the low end and $2 million-to-$3 million per year on the high end, per DePaula. They have a base salary, a wide variety of incentives and a product allowance (that allows them to order gear for free).
These are players who are notable enough to pique the interest of a shoe company, but they aren’t deemed marketable enough for their own signature shoe. However, many of these players do have PE (player exclusive) sneakers. Bradley Beal is an example of a player on a cash deal since he’s an All-Star-caliber player and Nike gives him PEs with his own logo and custom colorways.
Every brand is different, but Nike typically rewards All-Star players and top picks (such as Ben Simmons) with PEs. Jordan Brand gives players a PE of their favorite Jordan model when they sign with the company, and any Jordan Brand player who wins a championship receives PEs with gold accents.
“Jordan Brand is different because they only have 31 or 32 players. It’s an elite group… and everyone on the Hornets,” DePaula said with a laugh.
“The bigger the star, the more elaborate the contract and the negotiations are,” former NBA agent Matt Babcock explained. “The shoe company will likely demand a lot more from a star player in return for the lucrative contract. For a star (on a signature deal), some common terms that would need to be negotiated are the number of appearances, commercials and offseason tours. For a role player (on a cash deal), it wouldn’t be as elaborate, although there are some similarities like incentives.”
Some players turn down cash deals because they would rather be a sneaker free agent since that allows them to wear different brands throughout the year. Gilbert Arenas may be the most notable example of this. After parting ways with adidas, he spent the 2010-11 season embracing his sneaker free agency and wearing a ton of different brands (even rocking a pair of Dolce & Gabbana high-tops at one point).
Most of the NBA is on a merch deal, which means the player isn’t getting paid to wear the sneakers, but they do get a product allowance. These players are typically end-of-bench guys or big men (because there’s a commonly held belief in the sneaker industry that big men can’t sell shoes, which we’ll get to later in this series).
Not only does a merch-deal player get free product to wear during games, these players often get a product allowance as well. They basically get store credit and can order anything they want online (from sneakers to clothes to women’s and children’s apparel for their family).
Most players on a merch deal have a $25,000 product allowance, but that amount is negotiable. Each year, players must spend their allowance by September 30 and the money doesn’t roll over to the following season.
When players have funds remaining as September 30 approaches, they’ll either add a friend or relative to their account or find ways to give back. Some players order jerseys and shoes for their old high school or AAU team while others order gear to give away at their summer basketball camp.
“Look at it this way: If you’re a max player, you’re trying to get a signature deal. If you’re a mid-level player, you’re likely going to get a cash deal,” NBA agent Roger Montgomery said. “And if you’re a minimum player, you’re just going to get free product.”
Every NBA team has a storage room either at their arena or facility where they have a bunch of shoes in their team’s colors that brands send them. For players who don’t have any shoe deal, their team’s equipment manager will typically provide them with free shoes from this room.
ROOKIE DEALS VS. VETERAN DEALS
It’s worth noting that there’s a difference between a player’s first shoe deal when they enter the NBA (their rookie deal) and when they’re a veteran who goes through sneaker free agency.
Most rookie deals are finalized shortly after the NBA draft because the shoe companies want to see when a prospect is drafted and which market the player lands in before committing to them. Rookie deals are typically four-to-five years long and players can earn big money if they’re a top pick (especially if they’re in a large market like Los Angeles or New York).
“With a rookie, you just don’t know how they’re going to turn out,” said AND1’s head of sports marketing Dexter Gordon. “That’s why a lot of times, when an agent has a lottery pick, they try to hurry up and lock in a sneaker deal. I have to decide whether to put my money on a rookie with a lot of upside when I don’t know what’s going to happen or go with a veteran who has proven himself and is a bit safer because I’ve seen them play in the league.”
Some prospects bet on themselves and wait until they take the court to sign a shoe deal. Damian Lillard waited until after he played at the Vegas Summer League to sign his first shoe deal, which was a risky move. However, Lillard was named the co-MVP of the tournament after averaging 26.5 points, 5.3 assists and 4.0 rebounds, and his patience paid off when he inked a lucrative rookie deal with adidas.
The biggest difference between rookie deals and veteran deals is that the former is all about projecting a prospect’s upside and marketability (like NBA teams do in the draft) and the latter is about evaluating a proven commodity (like NBA teams do in free agency). And unless a top pick develops into a star, they will likely earn less money on their second sneaker contract.
“I think the second deal is often more of a rude awakening for guys rather than a raise,” DePaula said. “Top prospects get paid a lot and then some of those deals look bad very quickly. There’s one rookie who was a top pick in recent years and he got $2 million per year, but months into his NBA career, the company was realizing, ‘This deal isn’t going to work out.’ That player will most likely get a merch deal when his deal is up. Rookie deals are kind of a crapshoot.”
In 2018, PUMA thought they hit a home-run by signing the draft’s No. 1 pick (Deandre Ayton), the No. 2 pick (Marvin Bagley), the No. 9 pick (Kevin Knox), the No. 14 pick (Michael Porter Jr.) and the No. 16 pick (Zhaire Smith). Now, that group feels relatively underwhelming, especially since PUMA missed on the up-and-coming stars from that class: Luka Doncic and Trae Young.
Be sure to check back later this week for part two of this series, which looks at what exactly has to be negotiated in sneaker deals and the many incentives that are included in shoe contracts.