Every four years the world’s greatest athletes gather to compete in the Summer Olympics. This year’s event in London will feature stars in track and field, soccer, tennis and more. The Olympic competition extends outside the playing arena to the shoe and apparel market where Nike and Adidas compete for their own kind of gold on the backs of the athletes in their respective endorsement stable.
The ultimate rock stars of the London Games are expected to be the U.S. men’s basketball team, which will feature Nike athletes LeBron James, Kobe Bryant and Kevin Durant. Adidas was banking on Chicago Bulls point guard Derrick Rose to be its Olympic basketball stud, but a torn ACL in Saturday’s playoff game game against the Philadelphia 76ers will shelve Rose for the Olympics. This comes on the heels of another Adidas athlete, Dwight Howard, getting knocked off the U.S. team after back surgery in April. Chauncey Billups, also in the Adidas stable, will miss the Games after tearing his Achilles tendon in February.
The Rose injury is a crippling blow for Adidas. Major sporting events like the Olympics and World Cup are prime opportunities for Nike and Adidas to showcase their talent. The German apparel company made Rose its marquee athlete in February when it signed the 2011 NBA MVP to a 13-year worth $185 million that could net Rose more than $200 million after royalty payments. The deal kicks off with the 2012-13 NBA season.
Adidas badly lags Nike in the U.S. basketball shoe market with only 4.5% of the U.S. market in March according to SportsOneSource. Nike has a stranglehold in the U.S. with 91% of the market including the 58% share of the Jordan brand, which is owned by Nike. Adidas is hoping Rose can be a transcendent athlete for the brand as Michael Jordan was for Nike.
Adidas will have to sell a lot more of Rose’s signature sneaker for the deal to make sense from economic standpoint. Wholesale sales of Rose’s shoe were $25 million in 2011 in the U.S. compared to $40 million for Bryant’s shoe and $90 million for James’ Nike kicks according to SportsOneSource. Everybody is looking up at Jordan though where wholesale sales were $1 billion last year.
The Olympics will now be a Nike-fest when it comes to the U.S. basketball team. In addition to James, Bryant and Durant, the team is likely to feature other Nike or Jordan athletes including Carmelo Anthony, Chris Paul, Dwyane Wade and Kevin Love.
The Rose ACL injury severely damages the title hopes of the Chicago Bulls who are the top seed in the Eastern Conference and the team will have to adjust on the fly to move forward in the playoffs. Another team that will have to adjust on the fly are the marketing folks at Adidas’ German headquarters.