The blockbuster shoe contract has been a staple for NBA stars since Michael Jordan made basketball sneakers fashionable in the 1980s. Nike, Adidas, Under Armour, Puma and others have jockeyed to sign the hottest rookies or NBA All-Stars who were sneaker free agents.
But while the latest crop of stars were signing nine-figure contracts, the performance basketball shoe market in the U.S. was collapsing, down double-digits in most years since its peak in 2015 and plummeting a whopping 23% in 2020, according to market research firm NPD Group.
Performance shoes are current basketball styles that are made to be played in, while “retro” shoes are typically performance styles from a decade or more ago that are intended for fashion. The two sneaker markets were roughly the same size in 2015 but have gone in opposite directions ever since. The retail performance business, which does not include direct-to-consumer sales, was $600 million in 2020, while retro, dominated by re-releases of old Jordans and Air Force 1s, was six-and-a-half times larger at $3.9 billion and up roughly 20% year-over-year, according to NPD analyst Matt Powell.
“The retro product has done phenomenal,” said Cowen & Co. analyst John Kernan. “Nike is doing a lot of different colorways now, and they are launching product in very smart, very creative ways. They have done a masterful job managing the marketplace.”
Nike and the estate of Kobe Bryant did not renew their contract last week—ending a nearly two-decade relationship between the Los Angeles Lakers icon and sportswear giant—and weak sales of performance basketball shoes no doubt played a role. “Kobe was a big deal in China but was never a big force in footwear in the U.S.,” Powell said.
Nike doesn’t need Kobe to maintain its dominance; it has already cornered the market in basketball with an 86% share of performance sneakers, including the Jordan Brand, and a massive 96% of the U.S. retro business in the 12 months ending in March, per the NPD Retail Tracking Service.
Adidas is paying three players—James Harden, Derrick Rose and Damian Lillard—at least $10 million this year. Their contracts all run at least 10 years, but Adidas has only 5.5% market share, a tick behind the 6.1% of Under Armour, which built its basketball business on the back of Warriors point guard Stephen Curry.
“Most of these contracts were written a long time ago,” said Powell. “They are legacy contracts that I think many of these brands would wish they didn’t have.”
The only blockbuster sneaker contract signed over the past three years belongs to New Orleans Pelicans power forward Zion Williamson, who joined Nike’s Jordan Brand in July 2019 after captivating hoops fans for a year at Duke University. Williamson’s deal is worth an estimated $12 million this year, and his first signature shoe, The Zion 1, is available in limited quantities in stores starting Friday.
The Swoosh hopes Zion can carry the Jordan torch for the next generation, but it will be a long time before anyone can match the shoe legacy of MJ. Nike’s Jordan division reported revenue of $3.6 billion, up 15%, in the company’s fiscal year ending in May 2020, including the brand’s first $1 billion quarter. Sportico conservatively estimates MJ’s take at $150 million.
The Jordan Brand is far from done. It’s moving aggressively internationally, as well as with more women’s and lifestyle products. “China is on fire right now, and Jordan has done very well in Europe, too,” Kernan said.
There are a dozen NBA players, including one retired legend, who will earn at least $8 million this year from their shoe deals, according to Sportico estimates based on conversations with industry insiders. The estimates assume similar royalties to past years and bonuses based on playoff and All-Star appearances, but not necessarily NBA titles or MVPs, which can trigger multi-million dollar kickers. The top 12 are expected to earn roughly $310 million collectively this year.
Below is a breakdown of the biggest signature shoe deals, as of 2021:
Michael Jordan (Jordan): $150 million
The 35th iteration of the Air Jordan was released in September, but Jordan’s share of the performance business is only 7% and a blip compared to the retro business. Sales got a bump in 2020 with the release of The Last Dance documentary.
LeBron James (Nike): $32 million
James signed a lifetime deal with Nike in 2016 that his business manager Maverick Carter told GQ is worth more than $1 billion. His shoes will need to continue to sell at a high clip in retirement to reach that mark.
Kevin Durant (Nike): $28 million
The four-time scoring champ cashed in from a bidding war between Nike and Under Armour in 2014 that resulted in a 10-year deal worth nearly $300 million for Durant.
Stephen Curry (Under Armor): $20 million
Curry is getting the Jordan treatment at Under Armour with his own brand that launched Dec. 1. It features clothes, shoes and other products for basketball and golf.
James Harden (Adidas): $14 million
Adidas had banked on Derrick Rose being its franchise centerpiece, but injuries slowed the 2011 NBA MVP. Former Nike endorser Harden benefited when the three stripes brand came knocking in 2015 with a 13-year deal that ranks as one of the richest in the sport.
Zion Williamson (Jordan): $12 million
Williamson was arguably the most marketable player entering the NBA Draft since LeBron in 2003, and the 20-year-old is Nike’s first Gen-Z signature athlete. His first shoe carries a “Z” on the side of each shoe that matches the one shaved in his head.
Giannis Antetokounmpo (Nike): $12 million
The Greek Freak’s previous Nike deal was worth $20,000 a year before the two-time NBA MVP re-signed with the brand in 2017. His first shoe, Zoom Freak 1, was the largest signature shoe launch in Nike’s history.
Russell Westbrook (Jordan): $11 million
Nike locked up Westbrook in 2017 under a 10-year deal to promote the Jordan Brand. His latest signature shoe, the Jordan ‘Why Not?’ Zer0.4, was released in December.
Kyrie Irving (Nike): $11 million
Irving’s signature shoes are among the most popular for NBA players to wear, second behind only Kobe’s kicks during the 2019-20 season, according to the Baller Shoes DB database.
Derrick Rose (Adidas): $11 million
After a series of injuries, current New York Knick Rose has recast himself as a valuable contributor off the bench for teams in recent years, but eight figures per year is a princely sum for a role player. He signed his 13-year deal in 2012.
Damian Lillard (Adidas): $10 million
Dame Time has been a model of consistency, on track for a fifth finish in the top eight of MVP voting in six years. Adidas, whose North American headquarters are in Portland, signed Lillard to a 10-year deal in 2014.
Klay Thompson (Anta): $8 million
Thompson signed a 10-year deal in 2017 to be the face of China’s Anta basketball brand, and his humorous antics while annually promoting the brand in China gave birth to the #ChinaKlay hashtag.