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Why Under Armour's new NBA deal Is so important for the company

September 7
9:34 AM 2015

Under Armour, Nike's biggest competitor in NBA sponsorship announced that they had signed a new deal with NBA. The deal according to USA Today, will make Under Armour the new NBA's partner for Jr. NBA and NBA Draft Combine. The deal means that future stars created from this program can be spotted early on by Under Armour and will be endorsed by them.

Through the new deal, Under Armour's marketing strategy is to market itself to the rising star will become true. Besides partnership with NBA, Under Armour also has basketball players under their endorsement program. Among them are Stephen Curry and Jordan Spieth.

Through this endorsement, Under Armour has produced footwear associated with the stars such as the CurryOne footwear line. The shoe sales manage to increase the company's profit after The Warrior team win in the NBA final. Mutual benefits will be obtained through this program as NBA will be able to improve their youth league to recruit five million youth in the next two years through their program.

The Baltimore-based company, which is now considered as second U.S sportswear maker after Nike has been consistently growing their products by 20 percent annually. Most of the sale comes from their performance apparel which includes footwear and accessories. Both products' sales grew by 40 percent and 39 percent respectively in the second quarter of this year.

Under Armour need to improve their strategy to win against Nike. According to Forbes, Nike sales comes mainly from footwear sales and their sale in China alone is making more profit than Under Armour whole operation. And in basketball games Nike footwear dominate around 90 percent of the market shares and they also dominate 62 percent of US total footwear market leaving little space for other manufacturers according to Business Insider.

Nike also has been reported to close a deal with NBA which worth $1 billion for the 2017-2018 season. The deal will see all NBA player wearing a jersey with Nike logo on them even for Under Armour's endorsed player according to Complex. An analyst for NPD Group said that the deal will give Nike more attention, but other manufacturers can still tap in the market and make sales.

Last August, Under Armour CEO Kevin Plank announced their plan to build a billion dollar worth of basketball brand around their star player, Stephen Curry. The Curry Two footwear has been unveiled by the company and will hit stores soon.

Currently, in terms of footwear worn by the NBA player for the 2014-15 season, Under Armour brand is in fourth place after Nike, Adidas, and Jordan Brand.

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