National Championship Stakes For Nike & Under Armour
CNBC Sports Business Reporter
When Oregon and Auburn take the field tonight to do battle for the BCS National Championship, two shoe and apparel brands will be facing off as well: Nike versus Under Armour.
Nike , the largest shoe and apparel brand in the world, outfits Oregon, while Under Armour , which hit $1 billion in sales for the first time in 2010, covers Auburn head to toe in its interlocking UA logo.
So how important is this to the bottom line of both brands? Try next to nothing given the scope of their businesses. It's more of a "anything you can do I can do better" type of thing.
Last night, Nike was projecting Oregon's logo and its swoosh on Camelback Mountain, while Under Armour Auburn ads adorned nearly every billboard surrounding University of Phoenix stadium where the game will be played.
The bragging rights game takes on a little bit stronger meaning because Nike chairman Phil Knight is Oregon's biggest booster. The man has a headset in his suite to hear the playcalling and has made it a tradition for the team to change some part of its uniform for every game. There's a specially crafted combo for this game of course.
I'm not trying to undermine the value of being there — it's why Nike and Under Armour sponsor teams. Based on the number of logos on the entire uniform, Under Armour — which usually has 17 logos on Auburn's star QB Cam Newton — will get $5.3 million in equivalent advertising from the game broadcast, while Nike will see $3.1 million in exposure, according to Front Row Marketing, a sponsorship evaluation firm.
But Nike does more business in sales in two minutes in China than they'll do from championship locker room gear. And Under Armour, which is still challenged in the shoe space, could use a great shoe review more than an Auburn win tonight. At last check, Under Armour's latest debut in basketball was met with more skepticism, as the brand has achieved a 0.2 percent market share in the first couple months on shelves, according to SportsOneSource analyst Matt Powell.
An Auburn win tonight would be another feather in the cap of Under Armour, whose rise to the top of the industry is the most remarkable growth story in the last decade, but it won't put a dent in Nike's 20-fold sales lead over the brand. What could? Perhaps the signing of Newton to an endorsement deal if he becomes the next big thing in the NFL.
The problem with that thinking is that just because an athlete has been wearing a product for free within the last year, that doesn't mean he'll feel loyal to you when it comes time to open the wallet.
Adidas did more than Nike for LeBron James during his high school years and when the final negotiations wrapped up, Adidas wasn't even in the conversation.
And even if Nike doesn't think Newton is the next big thing, they could buy him just to block him from keeping up his Under Armour consistency. Make no mistake, Under Armour is still small enough compared to Nike that it still has to be smart with getting deals under the radar because Nike is playing with Monopoly money. After all, it's how they got South Carolina and Auburn, SEC teams with big followings that no other company particularly cared about. They got Tom Brady when Nike mysteriously didn't use him much and his contract ran out.
The Nike-Under Armour battle provides an intriguing subplot to tonight's game, but no matter who prevails remember to keep things in perspective. While winning tonight means everything for Oregon or Auburn, either shoe and apparel brand can do more business with one great idea that the other can't envision.
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