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How Are Sports Brands Marketing Without Sports?

Nike, Adidas and Under Armour sponsor professional sports and athletes to stand out globally. Online, they have more competition, but their connection to champions still means something to quarantined consumers.
Air Jordan shoes on a basketball court in December | Source: Will Newton/Getty Images
By
  • Chantal Fernandez
BoF PROFESSIONAL

NEW YORK, United States —  In any other year, basketball fans would be glued to their screens now watching the National Basketball Association playoffs. In 2019, 26 million viewers in the US and Canada tuned in to watch Kawhi Leonard lead the Toronto Raptors over the Golden State Warriors. Another 21 million people were watching in China.

The Raptors' victory was a big moment for New Balance as well. The brand had signed Leonard to a shoe endorsement contract the year before, reportedly agreeing to pay the athlete at least $5 million per year. A branded sneaker released midway through the playoffs sold out in seconds.

This week, Leonard would have been playing his first playoff games with his new team, the Los Angeles Clippers. But the NBA suspended its season in early March, and it’s not clear when — or if — games will resume. For New Balance, the lack of live play is a big loss: the brand has few other stars who Americans would recognise. Leonard, one of the few NBA stars without an Instagram account, has gone dark.

New Balance is far from the only brand scrambling to come up with a plan B now that virtually all major sports have been halted worldwide, rendering the billions of dollars they spend on advertising around these events virtually worthless.

Television networks have resorted to airing classic baseball games and old soccer matches. ESPN scored a coup with "The Last Dance," a 10-part documentary series about Michael Jordan that scored big ratings when its first episode aired Sunday. But the network's primetime ratings are down 54 percent, according to The Wall Street Journal.

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Nike, for example, pays the basketball, American football and baseball leagues in the US for the right to supply its uniforms — with the brand's swoosh logo, of course. Terms of the deals are not disclosed but Nike's NBA tie-up alone is reportedly worth $125 million per year. Elsewhere in the NBA, Adidas counts on stars like James Harden, who has a 13-year, $200 million endorsement deal with the German brand, to get its logo in front of sports fans.

Global sports brands rely on athletes to help sell their sneakers and leggings to everyday people. Their ability to sign stars to exclusive contracts is one of the most important ways they separate themselves from the crowd of online fitness brands and athleisure start-ups. Their other advantage, global networks of stores, have also been transformed into money-losers overnight as lockdowns keep apparel retailers closed. Inventory is piling up.

Ultimately, the lockdowns are taking direct aim at the primary force that powers sports marketing: repetition. An athlete’s inspirational Instagram post is no match for the cumulative effect of the Nike swoosh appearing before millions of viewers every time the New York Yankees take the field or Liverpool takes the pitch.

“The marketing side of these events is really a cumulative impact,” said Matt Powell, vice president and senior industry advisor for research firm The NPD Group. “Every time the jersey is shown, the shoes are shown, that logo is getting a lot of exposure and there is a value attached to that.”

Every time the jersey is shown, the shoes are shown, that logo is getting a lot of exposure and there is a value attached to that.

Brands are giving fitness videos and inspirational social media posts a try nonetheless. The hope is that marketing centred around health and wellness, rather than performance and competition, will keep homebound consumers loyal to their favourite brands.

Soon after the lockdowns began in Europe and the US, Nike released videos featuring regular people and stars like Lebron James exercising at home. Football champion Cristiano Ronaldo, Instagram’s most-followed person, challenged followers to a Nike-sponsored ab workout challenge. Adidas postponed planned campaigns to promote upcoming product releases and instead launched HomeTeam, a hub for at-home fitness routines, classes and inspirational messages from athletes like Olympic skier Mikaela Shiffrin.

“For us, it presents a unique opportunity where we had a bit more access to our athletes … in fun and creative ways that are really giving our consumers the ability to experience those athletes in a really different way than they have before,” said Emily Maxey, a marketing vice president for Adidas. “We can merchandise when it makes sense around those moments.”

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There may not be much point in marketing sports gear right now. A recent NPD report of US wholesale sales showed that performance athletic shoes were down more than 80 percent year-over-year in the first week of April. Athleisure like yoga pants and tracksuits are getting a boost in quarantine, however, as quarantined consumers seek comfortable and versatile apparel.

Still, Nike and Adidas’s stocks have taken a hit along with the rest of the market, down 16 percent and 30 percent, respectively, from the beginning of the year.

Brands are taking advantage of any opportunity to rev up the traditional sports marketing machine.

Nike sub-brand Jordan is engendering conversation around the documentary online with a weekly livestream show hosted ESPN reporter Sage Steele, inviting sports personalities to comment on the episodes as they air on Twitter and encouraging followers to share images of their favourite Jordan sneakers with the hashtag #INMYJS. The Jordan brand’s website prominently features the series trailer with a link to “Shop All Jordan.”

When NFL quarterback Tom Brady joined the Tampa Bay Buccaneers in March after nearly two decades with the New England Patriots, his new (Nike branded) jersey shot to the top of the football league’s online shop, even though it’s not clear when he’ll be able to wear the uniform in a game.

Powell said athlete sponsorships still matter, even in a world with no live sports. Stars like LeBron James (Nike) and Lionel Messi (Adidas) can still feature in ad campaigns. Brady’s line of “recovery sleepwear” for Under Armour is an easier sell in the current climate than game-ready jerseys and cleats.

Even before the pandemic, brands were focused on signing fewer athletes and were looking for ways to develop their off-court personas.

"If you take … James Harden, who is really an interesting charismatic, fashionable athlete off the court, I think there would be some leverage for him to be wearing a particular Adidas shoe when he is not playing the game," said Powell. (Harden, who appeared on the cover of March's GQ with Russell Westbrook, is known for his patterned and colourful sense of style.)

Free workouts are another way brands are hoping to hold onto customers. Nike made its subscription-based Training Club workouts free to access in March, and a representative said as of March 31, over 4 million workouts were being streamed per week on the app. Weekly active users have doubled year-over-year, and 1 million people signed up for Nike's running app.

In addition to free online workouts, Adidas made its training and running apps free for three months. In mid-March, Under Armour started a month-long fitness challenge on its apps.

People want to hear from companies that they like now.

But it’s unclear how long consumers will stay engaged. Major sports leagues haven’t said when they’ll return. Major League Baseball may play games in empty stadiums in Arizona this summer, and the NFL season is still scheduled to begin in September. But the summer Olympics, an unparalleled marketing opportunity, have been delayed by a year. And with stores closed in Europe and the US, maintaining visibility will be hard.

According to Tribe Dynamics, earned media value levels for Adidas, Nike and Under Armour all declined between February and March 2020 — down 2 percent to $66 million for Nike, down 27 percent to $21 million for Adidas and down 35 percent to $3.7 million for Under Armour. Nike counted the most “ambassadors,” or people posting about the brand, including big accounts like LeBron James and Khloe Kardashian. Under Armour’s top 3 posts of the month, in terms of generating earned media value, all came from movie actor The Rock. None of these posts were about sports explicitly, but about fitness in a lifestyle or inspirational sense.

“People want to hear from companies that they like now,” said sports marketing consultant Joe Favorito. “You’re not asking them for a straight sale but you’re reminding them that we are all in this together.”

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