Back in 2013 rapper Jay Z partnered with the well-known Creative Arts Agency to form a full service sport management firm called Roc Nation Sports. Many saw the venture as a joke, but Roc Nation Sports was able to quickly establish a name for themselves. They have signed some big name athletes such as Robinson Cano (MLB), Victor Cruz (NFL), Skylar Diggins (WNBA), and Kevin Durant (NBA) along with others.
Recently, Roc Nation Sports led the way on the bidding war between Nike and Under Armour on behalf of the NBA Superstar Keven Durant. KD has been a client of Nike since 2007. He was approaching the end of his contract, so Under Armour decided to see if they could entice KD to sign with them. UA pulled out all the bells and whistles in an effort to get the young superstar to represent their brand. UA was willing to offer a ten-year sponsorship deal with an estimated worth between $265-$285 million dollars; which would have been double the money from his old Nike contract. When Kevin Durant first came in the league he turned down a substantial amount of money from Adidas to sign with Nike, so it was apparent from the start of his career that he wanted to be affiliated with Nike. However, a big part of me really wanted KD to leave Nike for UA. I thought the deal with UA would have been clutch.
First, I am a big fan of rooting for the underdog, so this deal could have given UA a bigger share of the basketball market that is currently dominated by competitor Nike. Also, the UA headquarters are in the DMV area, which is also where KD grew up. It could have been a chance for them to unite and really put that area on the map. Second, UA was willing to offer some out of the box ideas in order to obtain Kevin Durant. I loved that UA was willing to build a community center in his moms (the real MVP) name.
Roc Nation Sports gave Nike time to match the Under Armour deal and at the last minute Nike decided KD was worth keeping. I believe that Nike was thinking long-term about how this could be a potential hit to revenue. If UA was able to obtain KD and capture a share of the basketball market it would hurt both Nike and the Jordan Brand. In the end Nike offered Kevin Durant a deal that is said to be estimated over $300 million for 10-years. That also includes a significant retirement deal. That’s a lot of money and some would argue that Nike spent too much. Is it worth it for Nike?! Possibly, but only time will tell.
Personally, I am a big fan of non-traditional deals that are made in the sports business, so I was ecstatic to see Under Armour make a run for Kevin Durant. During an interview Kevin Plank, president of UA said “We wanted to send a strong message to every athletic director, to every president of every club team, to every league commissioner. If you have a deal, there’s no deal too big for us.” This bidding war captured the attention of us all and showed that UA won’t back down from Nike.
In the end UA sent a strong message about their brand, Kevin Durant got paid some big money, Nike was able to keep one of the best players in the NBA and Roc Nation proved they could negotiate. When RNS first launched Jay Z said it was his mission to challenge the status quo and change the way business in sports is done. Nobody, has challenged Nike in this manner, so RNS and UA set the bar and provided a new standard for how business should be done. This is the biggest marketing/sponsorship deal RNS negotiated since they started up a year ago. It gives them more credibility and provides them a lot more leverage to entice potential brands and athletes.
