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Chinese Brands, Less Money Make Shoe Game More Complex

Flag of the People's Republic of China
Eriko Koga | The Image Bank | Getty Images
Flag of the People's Republic of China

Gone are the days that being a top 10 pick in the NBA Draft meant signing a three-year shoe deal worth at least $750,000 a year. Although projected top pick John Wall’s Reebok contract is said to be in the $3.5 to $4 million range, every player below him won’t even approach those annual numbers.

With all the usual players knowing it’s a buyers market, a new entrant will now tempt some of the top picks –- the Chinese shoe brands. For the past couple years, looking to establish legitimacy, these brands have signed NBA players,

Li-Ning signed Baron Davis, Shaquille O’Neal and Jose Calderon. Peak signed Jason Kidd, Sasha Vujacic and Shane Battier and Anta, who is reportedly close to inking a deal with Kevin Garnett, has Bonzi Wells, Luis Scola and Steve Francis on its roster.

Sources tell CNBC that some of these Chinese brands, looking to snag a rookie, have offered some players who will be drafted Thursday a shoe deal worth 25 to 35 percent more than what the normal shoe players say they can afford.

It’s now the agent’s job to figure out whether to recommend to the player if taking that money is worth it.

For veteran shoe marketer Sonny Vaccaro the answer is simple.

“I don’t think it’s smart to take an extra $500,000 from one of these Chinese companies if you are a top 10 draft pick,” Vaccaro said. “It’s not like they have a Jordan type shoe ready to go and they haven’t proven that they know how to market anything either.”

Another insider said that the Chinese companies don't make the lifestyle clothes that Nike and adidas do, so the off-the-court apparel might be not be as hip, which counts for something.

Vaccaro also said he thinks that for some picks it might be worth it not to sign with a shoe company at all this year.

One shoe insider estimates that seven to 10 first-round picks last year didn’t get a single dime from a shoe company and if the top guys who are making a couple million are offered pocket change, Vaccaro suggests it might be worth it to wait it out until they prove themselves.

“The 10th pick in this year’s draft is making $2.2 million in salary,” Vaccaro said. “If he’s confident he’s going to be good, is it really worth it to settle for $200,000 on a shoe deal? I say no.”

Agents might not recommend that strategy because then they won’t get the marketing money they’ve been waiting for.

Questions? Comments? SportsBiz@cnbc.com