Nike Has Spent An Incredible Amount On Endorsements Over The Past Decade

By on October 20, 2016 in ArticlesSports News

Part of the benefit of being a professional athlete is the opportunity to sign endorsement deals. Some players have made several times what they actually earn with their on-field play simply by backing a product.

In some cases, the player simply has to appear in a commercial, other times an endorsement deal might encompass a lot more, such as serving on the company's board of directors, promoting the company on social media, and, in the case of apparel companies, wearing the brand on the field.

For many athletes, being lured by apparel giant Nike is a great sign that they've made it. And with good reason: the company has or had sponsorship deals with some of the top names in their respective sports. Michael Jordan, Kobe Bryant and LeBron James rocked the basketball world wearing the swoosh, Serena Williams and Tiger Woods proudly wore Nike gear as they decimated opponents in tennis and golf, respectively, and when Simone Biles captured America's hearts this summer during the Rio Olympics, Nike had her back (and her shoes).

Of course, all of those deals add up. According to Portland Business Journal reporter Matthew Kish, Nike spent $9.42 billion in 2015, which is a 52 percent increase from 2014 alone. In fact, since 2007, Nike has spent a total of $46.79 billion in endorsement deals.

The increase in spending is due to a few different factors. For one, other players in the apparel game, most notably Under Armour, have started biting into Nike's sales. In some cases, the shoe giant has even lost clients to other brands, like how Steph Curry jumped ship to become the face of Under Armour.

In addition, endorsement contracts are becoming longer and more ambitious. Take LeBron James' recent Nike deal, for example. It lasts his entire life and might be worth upwards of $1 billion. That's a far cry from players signing deals for maybe a couple of years and a few million dollars.

Nike currently is endorsing more than 1,000 athletes across the sports industry and provides uniforms for the entire NFL and more than 90 colleges and universities in the United States.

Despite dishing out big money, the company is still making back quite a bit in apparel sales. For the fiscal year 2016 (which ended in June of this year), Nike reported earnings of $32.4 billion, which is 12 percent growth for the company. In the fourth fiscal quarter alone – from April to June – the company had $8.2 billion in revenue, which is nearly what they spent in all of 2015.

Even though other companies making a run at Nike's status, particularly on the basketball court, it's a safe bet to assume that Goliath will still be doing just fine for the foreseeable future. For now, the big question is…which promising young athlete will be the next one to put on the Nike swoosh?

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