How Much Should Nike Pay LeBron?

[Clutch City 01]

CNBC's sports business reporter writes:

The question is, as James' Nike contract comes to an end after this season, was it all that Nike expected when they signed him 2,273 days ago.

The answer is no.

When Nike signed James they agreed to guarantee him some $13 million a year, which would have only been worth it if he turned into the next Michael Jordan.

But while James has somehow lived up to the hype on the court, he hasn’t really done so off the court.

Much of it is not his fault. It’s just that it’s LeBron himself who has proven that there is no next Michael Jordan.

In LeBron, we finally had the perfect test case. The most glorified high school basketball player of all time who somehow lived up to all expectations. And yet, even he couldn’t sell gear or shoes like MJ did.

http://www.cnbc.com/id/32376185?__so...*blog*&par=RSS

[JamStone]

It's tough to compare to Michael in terms of shoe and sporting apparel marketing today.

Today, you got 5 million different companies making clothes and shoes. You got designer apparel making sports shoes. You have whole sale stores and black markets that sell shoes at 30% what they would sell at a Foot Locker or Champs or even 50% for what they'd sell in a Nike whole sale outlet.

The clothing business, and in particular shoes, isn't what it was in the mid 80s. Then, it was pretty much Converse, Nike, and Reebok. And, Nike did groundbreaking stuff that just out of luck coincided with Michael Jordan's journey in becoming the greatest basketball player ever.

Marketing just isn't the same today. When you have someone as legendary as Tiger Woods who can't even really save Gatorade, you know it's a sign of the times, not the product, not the athlete endorsee.

[23LeBronJames23]

Some day lebron going to be a billionare

[dirk4mvp]

Trying to discredit Jordan. Why you just go ahead and say Chamberlain is better for the 38th time?

[DPG21920]

It's tough to compare to Michael in terms of shoe and sporting apparel marketing today.

Today, you got 5 million different companies making clothes and shoes. You got designer apparel making sports shoes. You have whole sale stores and black markets that sell shoes at 30% what they would sell at a Foot Locker or Champs or even 50% for what they'd sell in a Nike whole sale outlet.

The clothing business, and in particular shoes, isn't what it was in the mid 80s. Then, it was pretty much Converse, Nike, and Reebok. And, Nike did groundbreaking stuff that just out of luck coincided with Michael Jordan's journey in becoming the greatest basketball player ever.

Marketing just isn't the same today. When you have someone as legendary as Tiger Woods who can't even really save Gatorade, you know it's a sign of the times, not the product, not the athlete endorsee.

It is indeed the product. The market is telling you that with more and more info and choices available, that just slapping a great athlete or celebrity on is not enough.

It is not like the products are not selling at all, but companies will have to weigh more carefully the pros and cons of marketing like this with shrinking expendable incomes.

[Unholy Turkey]

No, he has a point. I didn't see LeBron being injured in his second season in the league, now did I?

Even though LeBron has indeed done more than Jordan, you also have to put into perspective how strong the league was at that time. You had the Bad Boy Pistons and the 80's Celtics. No way could LeBron deal with those teams the way that Jordan has in his 6 seasons with the team he has now.

[kromediablo]

http://www.cnbc.com/id/32376185?__so...*blog*&par=RSS

Well check out the latest Air Max Lebron 7's !!!!:




Anybody copping these???

[JamStone]

But seriously think about it. Winners sell. The best players LeBron has had around him were Delonte West, Big Z and Mo Williams. Jordan had Pippin and Rodman. LeBron has carried his teams just as much as Jordan did in his first 6 seasons, Jordan didn't even get to the finals after 4 seasons.

It isn't fair to LeBron to say he is not living up to being as good as MJ. MJ had better coaching and players around him.

It isn't about LeBron living up or not living up to Jordan on the basketball court. It's talking about LeBron being able to sell his shoes the same way Jordan completely and utterly dominated selling his basketball shoes.

The report isn't talking about basketball. It's about marketing and selling shoes.

[JamStone]

It is indeed the product. The market is telling you that with more and more info and choices available, that just slapping a great athlete or celebrity is not enough.

It is not like the products are not selling at all, but companies will have to weigh more carefully the pros and cons of marketing like this with shrinking expendable incomes.

LeBron still sells his shoes. My point to say how even Tiger Woods can't save Gatorade goes to show you that it's not about the product but the state of marketing today, perhaps that as well as the economy, as well as alternative choices. What have you. My point is that if Michael Jordan started his NBA career in 2003, he couldn't do what he did back in the 80s and 90s in terms of selling his shoe. So, no, it's not really about the product or celebrity.

[Kermit]

Maybe if Lebron had a better looking shoe, it would sell more. I don't know if it's just me, but those sneakers look butt ugly.

[KidCongo]

LeBron wins a le and Nike will probably pay him more but I doubt they sell many more shoes than they would if LeBron didn't win.

LeBron has set himself up well but, his company is alligned with a couple of great companies and he has personal shares in most of these also.

You could say he's a business man first, basketball player second.

[koriwhat]

Maybe if Lebron had a better looking shoe, it would sell more. I don't know if it's just me, but those sneakers look butt ugly.

man that jordan line of nikes these days are fugly! i'm so sick of going into champs just to find a whole ton of jordan's and no other shoe. no new nike bball or even a hint of adidas bball shoes around. it's sad when the only shoes on the rack are the ones that make me...

[Culburn369]

LeBron still sells his shoes. My point to say how even Tiger Woods can't save Gatorade goes to show you that it's not about the product but the state of marketing today, perhaps that as well as the economy, as well as alternative choices. What have you. My point is that if Michael Jordan started his NBA career in 2003, he couldn't do what he did back in the 80s and 90s in terms of selling his shoe. So, no, it's not really about the product or celebrity.

Gee, Jam with a cogent post.

[DJB]

$5.00

[DPG21920]

LeBron still sells his shoes. My point to say how even Tiger Woods can't save Gatorade goes to show you that it's not about the product but the state of marketing today, perhaps that as well as the economy, as well as alternative choices. What have you. My point is that if Michael Jordan started his NBA career in 2003, he couldn't do what he did back in the 80s and 90s in terms of selling his shoe. So, no, it's not really about the product or celebrity.

If the product was great, it would still be selling, regardless of who is endorsing it. There are plenty of companies that have seen explosive ROI's on their marketing, even today.

Yes, like I said, Lebron is still selling shoes, but just not at the rate MJ was and it would decline regardless of Lebron, because of the product. Marketing has nothing to do with Gatorades decline (Edit: Marketing could have something to do with it, because Marketing is such a huge umbrella. But marketing with regards to endorsers has nothing to do with it). They are failing because of the consumers change in taste. Although this may be a sign of marketing today like you said, it is only a certain part of marketing (i.e. paying top dollar for celebrity endorsers may be a dying strategy...), and it certainly has more to do with the product and changes in the marketplace specific to the product and compe ion imo.

That is a product problem and economy problem, not a marketing problem. Marketing will compound the problem if they continue to spend without seeing proper return or growth.

People are still buying shoes, but as I illustrated, consumers are smarter now. There are more choices, so the products have to do more. Marketing certainly helps, but the product must be able to stand on its own.

[JamStone]

I didn't say it was a "marketing problem." I said it was a sign of the times. More choices, economy, no ground breaking stuff. Nike markets LeBron fine. They've put in plenty of effort and ad money into selling him. It's not a marketing problem. It's a problem with the state of the market.

You have kids going online making their own damn clothes, designing their own shoes. It's not the same market as it was back in the mid 80s. Kids aren't sitting in front of the TV only watching sports and MTV. It's not the same.

You put Michael Jordan in the NBA right now, he couldn't sell his shoes at the same rate he did when he played in the late 80s through the 90s. You put LeBron in the NBA back in 1987 right now at this point in his career, he'd become the billion dollar endorsee Michael did.

It's not a problem with marketing. It's a problem with the market. There's a difference.

And, Gatorade can't be saved by Tiger because people have moved on from Gatorade, not because it's a bad product or worse product than before. They've tried to keep up. They changed things, added different products like the low calorie G, added flavors, put in loads of money in their marketing campaign. Look just last summer with the "That's G" commercials with every athlete they signed plus from Dr. J to Misty May to Freddie Abou to all their other big names like Tiger and Peyton and Jeter and KG, plus Lil Wayne. Still didn't do for Gatorade. It's not the product. It's not the celebrities endorsing the product. It's the state of the market and a sign of the times.

[DPG21920]

I didn't say it was a "marketing problem." I said it was a sign of the times. More choices, economy, no ground breaking stuff. Nike markets LeBron fine. They've put in plenty of effort and ad money into selling him. It's not a marketing problem. It's a problem with the state of the market.

You have kids going online making their own damn clothes, designing their own shoes. It's not the same market as it was back in the mid 80s. Kids aren't sitting in front of the TV only watching sports and MTV. It's not the same.

You put Michael Jordan in the NBA right now, he couldn't sell his shoes at the same rate he did when he played in the late 80s through the 90s. You put LeBron in the NBA back in 1987 right now at this point in his career, he'd become the billion dollar endorsee Michael did.

It's not a problem with marketing. It's a problem with the market. There's a difference.

And, Gatorade can't be saved by Tiger because people have moved on from Gatorade, not because it's a bad product or worse product than before. They've tried to keep up. They changed things, added different products like the low calorie G, added flavors, put in loads of money in their marketing campaign. Look just last summer with the "That's G" commercials with every athlete they signed plus from Dr. J to Misty May to Freddie Abou to all their other big names like Tiger and Peyton and Jeter and KG, plus Lil Wayne. Still didn't do for Gatorade. It's not the product. It's not the celebrities endorsing the product. It's the state of the market and a sign of the times.

That is what I said. It is a change in consumer tastes to be exact. But it is up to the companies to evolve and grow and make their products stand out. Is it more difficult than ever? Yes. Do they still need to do it? Yes.

I said the same thing that it is the market place, not marketing. But I am putting the blame on the products, not the marketplace itself. The marketplace can never be "wrong", the market place exists and it is up to companies to provide the products to meet consumers needs.

[Holmes_Fans]

I don't get why people pay so much for this . This is why so many people are on welfare they spend $50 on a pair of Jordan basketball shorts. I work in sporting goods retail and we have a rack of $50 shorts with the jumpman on then, then a pair of our brand of shorts for $15 and they are the exact same material.

[DPG21920]

I don't get why people pay so much for this . This is why so many people are on welfare they spend $50 on a pair of Jordan basketball shorts. I work in sporting goods retail and we have a rack of $50 shorts with the jumpman on then, then a pair of our brand of shorts for $15 and they are the exact same material.

The power of branding my friend. We may not understand it fully, because it is a soft science somewhat, but as you can see, it works.

[JamStone]

That is what I said. It is a change in consumer tastes to be exact. But it is up to the companies to evolve and grow and make their products stand out. Is it more difficult than ever? Yes. Do they still need to do it? Yes.

I said the same thing that it is the market place, not marketing. But I am putting the blame on the products, not the marketplace itself. The marketplace can never be "wrong", the market place exists and it is up to companies to provide the products to meet consumers needs.

Not that simple.

When the car was invented, don't you think sales in horse drawn carriages took a big hit? When air conditioners started selling, think hand fans sold as well?

It's not always the fault of the product that times change, technology advances and outdates products that once were great sellers.

Short of putting cocaine in Gatorade, sooner or later it was going to get outdated. That's business, technology, products. It happens, and you can't just put it on the product and say make it better. Sometimes, it can't evolve to sell in the next generation.

Obviously, the car and air conditioner are extreme examples, but I believe that's what has happened with Nike shoes and Gatorade to a lesser extent. They've become somewhat outdated, no matter what changes they try to make to them.

[DPG21920]

Not that simple.

When the car was invented, don't you think sales in horse drawn carriages took a big hit? When air conditioners started selling, think hand fans sold as well?

It's not always the fault of the product that times change, technology advances and outdates products that once were great sellers.

Short of putting cocaine in Gatorade, sooner or later it was going to get outdated. That's business, technology, products. It happens, and you can't just put it on the product and say make it better. Sometimes, it can't evolve to sell in the next generation.

Obviously, the car and air conditioner are extreme examples, but I believe that's what has happened with Nike shoes and Gatorade to a lesser extent. They've become somewhat outdated, no matter what changes they try to make to them.

Maybe, but I think where you are getting caught up is in what you believe Gatorade is. They are not makers of "Gatorade", they are makers of a product that meets the needs of athletes re-hydration along with the makers of home/sports drink product (Propel, G2, Gatorade...).

You have to look at things objectively within the market place as well. For example, you have to adjust for "now".

When MJ was selling "x" amount, you have to look at the market at the time. With Lebron selling "y" amount today, even though it may be a lower percentage than MJ, how does Lebron compare in today's market?

He could still be above average, even though he is below what once was. It is very complex, but I believe Gatorade and every product needs to understand they are a provider of goods, and they need to adapt the best they can over time. They have the backing of Pepsico, a great consumer goods company, so I bet they figure something out.