Does Nike Get Better Value From Kyrie Irving Than Lebron James?
Last month, the Warriors won the NBA title, handily beating the Cavaliers four games to one.
But who comes out on top when it comes to those lucrative endorsement deals with the NBA’s biggest stars?
It’s a salient question. The right athlete – successful, telegenic, likeable, and authentic (or at least perceived that way) – can inspire major sales and generate positive brand impact. ROI matters – we’re looking at big money here; one study has company stock rising by up to .25 alone just when the news of a deal breaks and Nike has spent more than $8B on endorsements since 2002, says another analysis.
Share of voice, as defined through media intelligence, is one useful metric for understanding ROI. Zignal Labs took a look at news coverage as compared to total off-court earnings to see what the volume and sentiment could tell us about the payback for major brands.
Here’s what we found.
No surprises here: famous athletes are big newsmakers. Since January 1, there have been 16,000 stories and 500 broadcast TV segments focused on top NBA athletes and their shoe endorsements. For brands, that kind of volume is a reassuring signal that the mic is hot. In other words, the earned exposure – by far the best kind of media – is strong, reinforcing the notion that active endorsements by the biggest names in ball are useful to brands.
Five NBA athletes dominate… Both on and off the court, the top five NBA players that dominate the share of voice for endorsements are Kyrie Irving, Lebron James, Steph Curry, Russell Westbrook, and Kevin Durant.
…but just one captures most of the news. Looking solely at volume, Lebron James and Nike enjoy a firm top-of-the-heap position at a whopping 42 percent of news when it comes to share of voice on endorsements. On an average day, of course, James is a credible newsmaker all on his own – but this year, he blew past Michael Jordan to become the NBA’s all-time playoff scoring leader and his team made it to the very end of the conference championship season. Star wattage aside, these additional factors have also clearly brought greater exposure opportunities for James and for Nike.
That said, another player gives Nike a greater return on its (substantial investment). Lebron James is estimated to earn about four times as much from endorsements as Cavs teammate Kyrie Irving, who earns significantly less but attracts about 13 percent of public conversation on the topic. Thus, Nike actually gets more for its money with an ROI of approximately three times for Irving as compared to James. (It’s worth explicitly noting that, given his popularity, skill and brand, Lebron James is – of course – the most valuable player to Nike).
And both Cavs players pull in good sentiment numbers. Our data is clear: Both Lebron James and Kyrie Irving each garner a significant percent of positive sentiment around their shoe endorsement deals, together leading the pack. Sneakerheads in particular loved the new Nikes Irving debuted during the finals – the eye-popping shades of lemon, interspersed with stark black, and a sleek design won some raves, especially from bloggers that track athletic footwear with a near-religious zeal.
But what about the Warriors? The Warriors may have won it all but there’s no doubt the Cavs are handily outpacing them when it comes to seeing return on investment, at least when viewed through share of voice. Heavy premiums on uber-popular stars like Steph Curry and Kevin Durant push them down our index – Steph Curry’s share of voice (15.4 percent) as compared to total off-court earnings ($35M) yields an ROI of just 2.3 percent, for instance.
Will that change? It’s hard to predict with great certainty but surely winning the championship will only increase that premium. Can an endorsement deal with a very well paid, highly sought after player like Durant still work for a Nike, Under Armour or Adidas? No question – especially when the athlete has the broader impact of a Lebron, Steph, or Kevin. But looking at share of voice compared to off-court earnings alone, the players can still come out ahead.
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