Adidas, who during the 1990s and into the early 2000s had a promising stake in the basketball world, is still kicking themselves in###because they missed out on snagging the “next big thing” in LeBron James and the billions of dollars he has generated for Nike over a $3 million oversight.
John Paul Vaccaro, better known as “Sonny”, was able to get the Adidas brand embedded into the grassroots level of basketball to vault the company to become one of the most prominent shoe companies in America.
Vaccaro was able to achieve this by pioneering the use of sneaker sponsorships for high school teams to introduce their product to the nation’s elite talent at a young age. Through his annual ABCD basketball camps, which is still thriving today, it gave Vaccaro and Adidas a jump on recruiting the next basketball superstar.
Vaccaro’s first client was high school standout and Los Angeles Lakers shooting guard Kobe Bryant. Vaccaro orchestrated an endorsement deal with the McDonald’s All-American $1 million per year in 1996, sending shockwaves through the industry. Granting so much money to a high school prospect was unprecedented at the time. Bryant flourished under Adidas and made the All-Star game in just his second year in the NBA, marking a clear victory by beating Nike to the punch by signing Bryant before Nike even sat down to the negotiating table.
Vaccaro had a real talent for identifying young talent and even recruited Michael Jordan during his time at Nike. Next up was Tracy McGrady, a Central Florida native and cousin to NBA star Vince Carter, who had a head turning performance at Vaccaro’s ABCD camp. Nike, who did not want to lose out on McGrady as they did with Bryant, took a proactive approach to sign McGrady, but he chose Adidas because he felt the direction it was going with its younger athletes.
In 2003, Sonny Vaccaro was close to landing his biggest client to date in LeBron James. James was a phenomenon like any other player seen, capturing covers of major sporting magazines and having several of his high school games televised on ESPN during his senior year. Vaccaro immediately offered LeBron a $100 million shoe contract over 10 years, which also included signing James to upper management at Adidas.
However, during the sales presentation to the James camp, Vaccaro realized management altered the terms of the contract from $10 million over 10 years to $7 million with incentives.
James, needless to say, walked away from the Adidas deal and signed with Nike for $90 million.
The decision on not giving one of the most most transcendent athletes of this century three more million dollars in guaranteed monies changed the scope of business between the two companies. Sonny Vaccaro says, “it was the dumbest single mistake anybody ever made in the negotiation of a property.”
Nike has made more than $16 billion in revenue since 2003 and in 2014 alone, James scored upward of $340 million in sneaker sales and contributed to Nike controlling an astounding 92% of the market share in the basketball shoe industry in 2013 according to Forbes.com.
Adidas missed out on billions in revenue as well as the opportunity to control the entire basketball landscape. They already had an advantage in reaching the younger stars and with LeBron James on their roster, acquiring stars like Kevin Durant and Stephen Curry could have been a lock.
Now Adidas finds itself signing players like James Harden for $200+ million and finds itself relying more on their emerging lifestyle brand in order to compete.
Date Posted: Wednesday, September 30th, 2015 , Total Page Views: 2352
Like what you're reading? Please help us continue providing you with informative and thought provoking stories by becoming a supporter of Moorenews.net