By Wallace Witkowski, MarketWatch
SAN FRANCISCO (MarketWatch)--Nike Inc. is reportedly matching an up-to-$285-million endorsement deal from Under Armour Inc. for Oklahoma City Thunder forward Kevin Durant that would keep the NBA star part of Team Swoosh for years to come.
On Sunday, ESPN reported Nike (NKE) has stepped up its game, telling Durant's representatives, JayZ's Roc Nation Sports, it will exercise its right to match an estimated $265 million to $285 million endorsement deal from Under Armour (UA). The move would keep Durant with Nike after his current endorsement deal expires.
Under Armour shares dipped 1.6% to close at $69.44 on Aug. 21 while the broader market logged gains after the company offered Durant the 10-year deal. Shares have yet to fully rebound and closed down 1.9% at $68.38 on Friday.
Durant is a hot property for Nike, rivaling shoe styles endorsed by Cleveland's LeBron James and Kobe Bryant of the L.A. Lakers. In back-to-school sales, those Nike styles have driven a 51% increase in basketball gear sales, according to a recent note from Sterne Agee analyst Sam Poser.
"Strong sales were driven by the launches of the [Kevin Durant] KD7 "35,000 Feet," the "July 4th" styles for Kobe and LeBron, and the Air Jordan 3 -- Sport Blue," Poser noted.
As is often the case with high-profile sports endorsements, Durant stands to make much more endorsing gear than playing basketball. About $41.2 million remains on Durant's contract with Oklahoma City over the next two years.
Back in 2007, Durant signed a 7-year endorsement deal with Nike for $60 million, reportedly several million dollars less than a competing offer from Adidas, underscoring Durant's wish to be affiliated with Nike.
Sterne Agee's Poser also notes that Under Armour sales have been challenging Nike sales when it comes to children going back to school.
"In the [last four weeks], UA children' apparel sales increased +37.8% in the National Accounts channel, versus +16.2% for Nike brand," Poser wrote. "However, brand Jordan children increased 54.4%. UA, Nike, and Jordan constitute 27.8%, 39.8%, and 10% total children' apparel sales in National Accounts, versus 24.1%, 41%, and 7.5% for the same period last year."
-Wallace Witkowski; 415-439-6400; AskNewswires@dowjones.com
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08-31-14 1454ETCopyright (c) 2014 Dow Jones & Company, Inc.