Learning from Steph Curry's Deal With Under Armour
The story of Nike's botched deal with Curry and his (lucrative) deal with UA.
Here's footage of Steph Curry sometime between 1999 and 2002.
His dad -- Dell Curry -- is playing for the Toronto Raptors and the younger Curry tags along to the stadium.
Steph is 11-14 years old in the clip and already showing signs of what will become the greatest jump shot in NBA history.
Today, Curry and the Golden State Warriors are playing in Game 4 of the NBA finals. The Warriors are trailing the Boston Celtics 2-1 in the best of 7 series, but Steph will notch his 4th ring if they can pull it off.
And he'll be doing it while wearing Under Armour basketball shoes.
Curry actually began his career with Nike but left in 2013.
Nike gave one of the worst athlete recruiting efforts in the history of athlete recruiting efforts (which is very unlike them).
If you ever hosted a bad business meeting, the following story will make you feel instantly better.
Here is a play-by-play from an amazing 2016 ESPN article by Ethan Strauss:
A Nike athlete: The Golden State Warriors drafted Steph Curry with the 7th pick in the 2009 NBA draft.
He wore Nike while playing college at Davidson and his Godfather worked for the company. Curry ends up signing a modest 4-year endorsement deal with the apparel giant.
Curry’s breakout season…In the last year of the endorsement deal (2012-13), Curry sets a record for 3s in an NBA season and has a number of iconic performances.
But it wasn’t quite enough…
While Curry’s star is rising, Nike isn’t ready to go all in. The brand places athletes into tiers and gives the best deals to superhuman athletes (Lebron James, Kevin Durant, Kobe Bryant). Curry — who is small by NBA standards (6’3, 190lbs) — doesn’t fit the bill and isn’t considered a "tier 1 star", a classification that comes with a signature shoe.
The first rejection: Aside from signature shoes, Nike signals its interest in a young NBA athlete by giving them a Nike-sponsored training camp. Curry got snubbed while two of his peers — Kyrie Irving and Anthony Davis — each get one.
The Kyrie Conundrum: Irving receiving a camp nod is another red flag. He also has a smaller build for the NBA (6’2, 190lbs) but was a #1 pick and considered more marketable at the time.
Based on Nike's emphasis on super-human size, the company probably doesn't want to lift up too many diminutive guards into the top tier of endorsements — they also cited Curry’s ankle issues at the time.
Despite the sleights, Nike had every reason to feel confident going into contract negotiations.
At the time, the Oregon-based company accounted for 96% of the basketball shoe market. Meanwhile, 74% of NBA athletes were signed to Nike brands.
As Strauss explains, “incumbency is a massive recruiting edge for a shoe company.” Going into the pitch meeting with Curry, it was clear that Nike was leaning on the incumbency edge.
The details of the actual pitch meeting are cringeworthy to the nth degree:
Nike sends in the B-Team: In August 2013, Curry and his father Dell meet with Nike near the Warriors practice facility. Instead of sending an “NBA powerbroker”, Nike sends a lower-level marketing director.
A disastrous slide show: If you’ve ever guffed a PowerPoint deck, just know that Nike pitched Steph Curry with slides meant for NBA star Kevin Durant (they literally copy and pasted a deck and forgot to remove the word "Durant").
To make it even worse…the Nike team couldn’t even pronounce Steph’s name:
"The pitch meeting, according to Steph's father Dell, kicked off with one Nike official accidentally addressing Stephen as 'Steph-on', the moniker, of course, of Steve Urkel's alter ego in Family Matters.'
I heard some people pronounce his name wrong before,' says Dell Curry. 'I wasn't surprised. I was surprised that I didn't get a correction.'
'I stopped paying attention after [the slide deck snafu],' Dell says. Though Dell resolved to 'keep a poker face,' throughout the entirety of the pitch.
I have a buddy who runs restaurants and he always said, “you can tell the quality of a restaurant from the bread they serve you…it’s not a huge expense but if you can’t get the bread right, how are you going to get anything else right?”
Curry’s decision to leave Nike was a culmination of a number of factors, but the name thing is just egregious.
If you can't get that right, what can you get right?
There’s still a non-zero chance that Curry would be a Nike athlete if he had a more “normal” name like Steve.
Even after all this insanity, Nike had a trump card: with Curry's matching rights, it could match any other offer the Warriors guard received.
And there was an offer waiting in the wings. Under Armour — initially built around football — was expanding into basketball. It wanted a marquee athlete and had the in with Curry.
Enter Kent Bazemore, who joined the Warriors as an undrafted rookie in the 2012-13 season. Bazemore was an NBA nobody but hustled his way to a product deal with Under Armour, which basically just meant they sent him apparel and shoes.
In return, Bazemore acted as a de facto salesman for the company and recruited Curry over the course of the season.
By the time of the Nike negotiation, UA was ready to offer a $4 million deal. Nike originally offered $2.5m and had the option to match the additional $1.5m…
But I’m sure you can guess what happened…
They didn't match Under Armour’s offer and the rest is history.
Since then, Curry has won 2 MVPs and 3 NBA titles in Under Armour shoes.
In 2015, he signed a new contract with UA and received equity in the multi-billion dollar athletic firm.
While UA has had some struggles in recent years, Curry Brand -- think something like Jordan Brand -- was launched in 2020 and may be the company's best driver moving forward.
Looking back, you can rationalize some of Nike’s recruiting decisions. But the disrespect in that 2013 pitch meeting was wild.
Did y'all not see the stroke? It's literally been there this entire time.
And funny enough…
Kent Bazemore, who recruited Steph to Under Armour, rejoined the Warriors in 2020 and wore Curry’s shoes throughout the year.
We’ve already covered how not to do a deal, but what about for Steph Curry.
Steph (and companions) handled the situation in the right fashion.
They saw the red flags and went with the company willing to invest in the athlete beyond just an endorsement.
You may have caught this above, but two years after signing with Under Armour Steph renegotiated a deal that also included equity in the company.
Athletes are better served as shareholders.
When you have a stake in the upside potential of a company you’re willing to help them grow in ways beyond just a typical endorsement.
In its simplest form, Steph and Under Armour formed a partnership to help each other achieve their goals.
Both have benefited greatly and with the recent launch of the Curry brand, Steph is on his way to becoming a billionaire.
Props to Curry and the business team around him.
Thanks for reading today!
Finish out Friday strong and have a great weekend.
We’ll talk on Sunday during the weekly roundup.