Nike Inc. won the rights to make the jerseys for teams in the National Basketball Association, taking over for Adidas after its contract ends in 2017. Nike’s deal is for eight years and is reportedly paying roughly $1 billion for the rights. The deal gives Nike the rights to design and make jerseys, as well as warm-up outfits and and shooting shirts.
The company has been a marketing partner of the NBA since 1992, and will now also have the rights to make apparel for the WNBA and the NBA developmental league. The deal is bullish for Nike’s stock, as it will be able to include its logo on the jerseys, something that previous sponsors were not able to do. Nike’s basketball-related sales have been on a roll and will benefit from this decision.
This is the second time that the company has taken over as a sponsor for a major sports league, as it also took over the National Football League from Reebok in 2012. The company has been on a roll after revamping its struggling China division. It is also benefitting from the athletic leisure trend, as costumers wear Nike’s athletic products as everyday apparel. This has helped the company grow its sales even with its massive size..