Is a $200 Million Endorsement Worth $200 Million?

james-hardenA few minutes ago I read that Adidas gave NBA star James Harden a 13-year, $200 million endorsement deal to wear their shoes on and off the court.

That’s a staggering amount of money. In fact, I wondered for a few seconds if Adidas even makes that much money, but I took a look at their financial reports…yeah, they make a lot of money. Like, tens of billions of dollars each year.

So they can afford it. But, still: Do endorsements reap financial rewards equal to or greater than the investment?

I must be thinking too small about this, but I just can’t imagine that one basketball player has that much of an impact on buying behavior. It’s not like Harden has his own brand of shoes for Adidas. There are no Air Hardens. Adidas is literally just paying him to wear their shoes.

Walk me through this process. Do kids see Harden wearing Adidas, inspiring them to go buy Adidas shoes? Or does it plant the seed in their head that Adidas is cool, so someday they buy Adidas? Do all of those kids (and adults) possibly add up to $200 million in profit over the next 13 year?

Perhaps I’m missing something big here. Adidas knows what they’re doing. Am I vastly underestimating the power of celebrity endorsements?

5 thoughts on “Is a $200 Million Endorsement Worth $200 Million?”

  1. They might be thinking he’s the next Michael Jordan. Is he the next Michael Jordan? I hardly follow sports. I know Jordan, but know nothing about Hardens until now. Is he that good that he’s going to be on the court for 13 years? What are you doing, Adidas?

    • I don’t know how long he’ll play, but definitely not 13 more years. And the Jordan comparison could work…if Adidas were making a shoe with Harden. But it doesn’t appear that they are. He’s just wearing their existing shoes.


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