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Nike secures 12-year NBA, WNBA uniform deal

Published 10/22/2024, 04:22 AM
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NKE
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NEW YORK - In a landmark deal, NIKE, Inc. (NYSE: NKE) has extended its global partnership with the National Basketball Association (NBA), the Women's National Basketball Association (WNBA), and the NBA G League, cementing its position as the exclusive on-court uniform and apparel provider for the leagues until 2035.

The 12-year extension builds on a relationship that has seen Nike (NYSE:NKE) support basketball growth and innovation for decades. The agreement, which includes outfitting, merchandising, marketing, and content collaboration, aims to advance the sport for future players and fans.

NIKE, Inc. President and CEO Elliott Hill expressed the company's commitment to the sport, emphasizing the collaboration's potential to open new opportunities for players and fans. NBA Commissioner Adam Silver noted the expanded partnership's focus on youth basketball, which is expected to create more opportunities for aspiring players.

WNBA Commissioner Cathy Engelbert highlighted Nike's support for women's basketball and the potential for the partnership to enhance the league's development and fan engagement. Additionally, the National Basketball Players Association (NBPA) has renewed its group license agreement with NIKE, Inc., making it an official partner of the NBPA.

The extended partnership will feature new content initiatives, a dedication to grassroots basketball, and the continuation of a joint membership program offering exclusive products, content, and experiences. Nike's investment in the WNBA is also set to deepen, further championing the women's game.

Plans are in place to introduce basketball programs and resources to make the sport more accessible at the youth level, including age-appropriate coaching and playing standards. Nike will also work to improve the playing experience for girls and increase access to the sport through the Jr. WNBA and Basketball Without Borders.

The collaboration will also seek to enhance player, coach, and program development opportunities across Nike's Elite Youth Basketball League (EYBL). Moreover, Nike's presence will expand across marquee league events such as NBA Global Games, NBA All-Star, and WNBA All-Star.

The partnership renewal follows an eight-year agreement initiated in 2015, which saw Nike become the official outfitter for the NBA from the 2017-18 season. Nike has been an NBA partner since 1992 and has played a significant role in marketing the WNBA since its inception in 1997 and the NBA G League since the 2017-18 season.

This announcement is based on a press release statement from NIKE, Inc.

In other recent news, Nike has been the center of attention following key developments. The sportswear giant recently appointed Elliott Hill as the new CEO, a move that UBS believes could be highly beneficial for the company, although the positive effects may take 18-24 months to materialize. Tom Peddie has also been named as the Vice President, General Manager of the North America Geography, a strategic move expected to drive growth in the region.

Amid these leadership changes, Nike's financial performance has seen mixed responses from various firms. Truist Securities upgraded its rating from Hold to Buy, raising the stock target to $97.00, citing confidence in Nike's strategic initiatives and leadership. However, HSBC lowered Nike's price target from $95.00 to $85.00, maintaining a Hold rating due to concerns about the company's product innovation and distribution strategies.

Stifel and BMO Capital maintained their Hold and Outperform ratings respectively, despite Nike's weaker-than-expected revenue and withdrawal of its full-year guidance. BofA Securities kept a Buy rating on Nike, expecting strong sales despite an anticipated 8-10% revenue decline in the second quarter.

In product news, the Pegasus 41, part of Nike's assortment overhaul, received a positive reception, leading to a significant increase in Spring order books. However, franchises such as Jordan and Dunk are experiencing slower releases and declining search interest. These are among the recent developments shaping the conversation around Nike.

InvestingPro Insights

As NIKE, Inc. (NYSE: NKE) cements its long-term partnership with the NBA, WNBA, and NBA G League, investors may find additional context from InvestingPro's data and tips particularly illuminating.

According to InvestingPro data, Nike boasts a substantial market capitalization of $121.6 billion, underscoring its position as a dominant player in the sports apparel industry. This aligns with the company's ability to secure such a significant, long-term deal with major basketball leagues.

An InvestingPro Tip highlights that Nike is a "prominent player in the Textiles, Apparel & Luxury Goods industry," which is evident in its capacity to maintain exclusive partnerships with top-tier sports organizations. This position could potentially translate into sustained revenue streams and brand visibility over the extended contract period.

Another relevant InvestingPro Tip notes that Nike "has raised its dividend for 22 consecutive years." This consistent dividend growth, coupled with the company's commitment to long-term partnerships like the one with the NBA, may signal financial stability and a strong market position to investors.

It's worth noting that InvestingPro offers 10 additional tips for Nike, providing a more comprehensive analysis for those interested in delving deeper into the company's financial health and market prospects.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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