Sports apparel giant Under Armour has reportedly dangled a 10-year endorsement deal for 2013-14 NBA MVP Kevin Durant believed to be worth between $265 million and $285 million, per ESPN.
ESPN's Darren Rovell reported on Aug. 20 that the 2013-14 NBA MVP has received a 10-year contract offer from Under Armour which is worth between $265 million and $285 million, citing Durant's representation, Roc Nation Sports:
"Kevin Durant's representation Roc Nation Sports informed Nike on Wednesday that he has a deal on the table with Under Armour worth between $265 million and $285 million over 10 years, sources told ESPN.com.
"The deal includes Under Armour stock and other incentives, such (as) a community center built in his mother's name, whose exact worth will not be known for some time.
"Nike, which saw its signature business related to the Oklahoma City Thunder forward grow to roughly $175 million at retail last season, will have the right to match, which is a condition of Durant's current contract with the brand. Durant can still choose Nike if it doesn't match but can't legally choose Under Armour if Nike does.
"Nike's offer, sources said, would have given Durant a base and a minimum royalty guarantee that would equal no less than $20 million a year.
"If Under Armour wins the services of Durant, it would be the largest sponsorship deal the company has ever committed to. The average of $26.5 million to $28.5 million means the Under Armour would be devoting nearly 10 percent of its current annual marketing budget on him. Although Under Armour has given investors guidance that it might hit $3 billion in revenues this year, only about 1 percent of that is from basketball shoes.
"Because Under Armour has such a small basketball business, the company has to guarantee Durant his money up front, instead of the typical shoe deals that offer a minimum guarantee plus up to 5 percent royalty on the wholesale revenues. Michael Jordan, for example, made more than $100 million last year from Nike largely from royalties on sales of his Jordan brand.
"Durant's potential move to Under Armour, despite the lure of more guaranteed money, is surprising if only for the fact that he was one of the most loyal Nike athletes.
"In 2007, before he played in in his first NBA game, Durant wanted to sign with Nike badly enough that the $60 million contract he signed with the Swoosh was more than $20 million less than what Adidas had offered.
"But sources say his move to Jay Z's Roc Nation last summer started to turn the tables. His new agents were interested in a stronger negoatiation including both Under Armour and Adidas, which dropped out last week.
"Durant's shoe deal free agency to Under Armour turned out to be a bigger deal because of the interest expressed by the company's founder and CEO Kevin Plank. Sources say Plank felt Durant could accomplish two major goals: growing its small shoe business and improving its international presence that has been lagging behind its North American sales growth.
"Making things more appealing was the fact that Under Armour is a Baltimore-based company.
"Durant grew up in Seat Pleasant, Maryland, 36 miles southwest of Under Armour's headquarters, and the company has a record of spending marketing dollars in the community."
"United States coach Mike Krzyzewski says he was surprised by Kevin Durant's decision to leave the team last week because of 'physical and mental fatigue.'
"'Yeah, I was,' Krzyzewski said after Team USA's practice in Chicago on Thursday. 'No question. I was.'
"Krzyzewski wasn't the only one surprised, but he might have been the most frustrated. Durant, the reigning NBA MVP, was expected to be the leader on and off the floor for Team USA.
"'It's one of those things; you don't replace Kevin Durant,' Krzyzewski said. 'You look different. And so we have today and (Friday) to look different before we play a really good team. That's of concern for me because we were pretty far along. We had our best camp ever in Vegas since I've coached (Team USA). Those guys were terrific. We had more in (game plan-wise), but we had more in to play a certain way. And then Kevin deciding not to play...it's concerning.
"But hopefully we'll be good enough on Saturday, and then we use New York and Gran Canaria to get better and get better during pool play.'
"Team USA managing director Jerry Colangelo echoed those sentiments.
"'Kevin is a terrific guy and a terrific USA Basketball guy, and he was really despondent about not being able to play,' Colangelo said. 'He wanted to. But he found himself in a situation where he had no choice...in terms of his contractual situation.'
"Between Paul George's gruesome leg injury at the end of Team USA's scrimmage two weeks ago and the fact that Durant has been linked to a huge multimillion dollar deal to sign with Under Armour -- Team USA is sponsored by Nike -- Colangelo could tell the Oklahoma City Thunder star had a lot on his mind.
"'I was at the Hall of Fame induction ceremonies this past weekend when I got the call from Kevin, and I wasn't surprised,' Colangelo said. 'That was predicated on his week in Vegas where I thought he was -- he had a lot of things on his mind. So for him to indicate that he was mentally and physically exhausted, it kind of came but not as a surprise.'"