- Nike recently signed a 12-year deal with the NBA, WNBA and NBA G League.
- EMARKETER analyst Rachel Wolff said the deal “makes perfect sense” for Nike.
- WNBA viewership increased in 2024 season; Nike needs a boost in sales.
Nike is deepening its partnership with the NBA and WNBA as basketball explodes in popularity in 2024. That’s good news for the company as it tries to return to its sports roots and revive sales — and as women’s basketball becomes ever the most popular.
The sports apparel giant announced in October that it signed a 12-year deal with the NBA, WNBA and NBA G League to be the exclusive uniform and apparel provider for each league.
The deal comes as Nike tries to stem a sales slowdown and save $2 billion over the next three years. Its revenue for fiscal 2024 was $51.4 billion — up just slightly from 2023 numbers. The company has replaced CEO John Donahoe; on October 14, Nike veteran Elliott Hill returned to the company in a new role as CEO to help drive innovation and differentiate Nike from its sportswear competitors.
While Nike began as a leadership brand, its business has historically been associated with basketball following a 1984 collaboration with Michael Jordan. The shoe’s success eventually led to the Jordan brand, which brought in roughly $6.9 billion in revenue for fiscal year 2024 — about 14% of Nike’s total sales.
Basketball is hot right now
The new contract comes in the same year as the Paris Olympics and a record-setting NCAA women’s championship that peaked at 24.1 million viewers — the largest audience in women’s college basketball history, according to data from Nielsen. The WNBA Finals averaged 1.6 million viewers on ESPN, up 115% from 2023.
It also comes at a time when the WNBA said it plans to expand from 12 teams to 15 by the 2026 season. The league said franchises are planned in California, Portland, Oregon and Toronto.
“We all see the potential of the game,” Nike CEO Hill said during a panel interview at an event announcing the new deal and celebrating the WNBA’s expansion at Nike headquarters on Oct. 21. NBA and WNBA stars Sue Bird, Kevin Durant, and Jayson Tatum joined commissioners from both leagues and Nike executives to discuss basketball’s cultural impact.
It’s not Nike’s first basketball sponsorship. It has partnered with the NBA since 1992 and has had a marketing agreement with the WNBA since its inception. In 2015, Nike inked an eight-year apparel deal with the NBA, WNBA and G League for $1 billion after Adidas decided not to renew the contract, Bloomberg reported.
“We know that when we invest in women’s sport, we invest in the future of all sports,” Nike said in a statement.
Nike said its goal is to “grow the culture of the game and create opportunities for every child who dreams of taking the field.”
WNBA expansion will help Nike
“It’s an opportunity for Nike to capitalize on the WNBA’s growing popularity and viewership, which could lead to a rebound in the lifestyle business — assuming it can deliver innovation and design,” EMARKETER analyst Rachel Wolff said. a sister company of Business Insider. said.
Softening demand in the lifestyle category has led Nike to reduce its focus on that division, according to a Goldman Sachs research note published in June. Nike executives have previously said the company will focus on returning to its athletic roots.
“For the past 50 years, Nike has been very much about putting the athlete at the center of the conversation and growing the sport around the world,” Hill said during the panel in October.
Part of Nike’s approach to growing its basketball franchise has focused on popular WNBA players as their fame grows. Rookie Caitlin Clark, who emerged as the all-time leading scorer in NCAA Division-I basketball, signed an eight-year, $28 million contract with the sports giant, The Wall Street Journal reported in April.
“It’s absolutely critical that they embrace the WNBA,” said Simeon Siegel, senior retail and e-commerce analyst at BMO Capital Markets. Siegel said Nike needs to “win everywhere” if it wants to maintain its place as a big, distinctive company, which is hard to do.
Other speakers at Nike’s October panel, which included executives and NBA commissioner Adam Silver, talked about the connection between basketball and lifestyle apparel. Siegel told BI that Nike “must be all things to all people,” meaning pivots between sportswear and lifestyle wear are inevitable.
“It’s Nike’s job to create demand through their product and their story, and then distribute that demand across their portfolio,” Siegel said. BMO maintains a “buy” rating on Nike.
While EMARKETER’s Wolff said the new 12-year deal “makes perfect sense,” Nike will need more than a partnership with the NBA and WNBA to make the comeback it’s trying to make.
And if the company wants to beat competitors like Adidas and New Balance, Nike will have to “protect its competitive edge” in basketball and capitalize more quickly on fashion trends, Wolff said.