Sorting through Puma’s decision to sign Marvin Bagley and get back into the basketball sneaker market, and whether or not that decision is a good one
In a move that came seemingly out of nowhere -a move which may very well carry the weight of a brand’s future, as well as the immediate future of the basketball sneaker industry- Puma has signed former Duke forward Marvin Bagley III to a basketball endorsement deal. The first NBA athlete, or in Bagley’s case, soon-to-be NBA athlete they’ve signed in almost twenty years.
News of the deal, which was first broken Thursday by Jon Krawczynski of The Ringer, came with quite an interesting detail attached. That this will reportedly be the largest rookie contract since Kevin Durant’s seven-year, $60m deal in 2007.
Now, there are a lot of jokes that can be made here. Especially after you consider the long-held relationship between Nike and Bagley (a relationship which may have entered some fiscally and legally gray areas). But all of those jokes would be at the expense of Nike, and that’s not who this story will be about. The story has to be about Puma, because with this move -and the other moves which led up to this one- the brand is showing that its as serious as it has ever been.
As previously mentioned, this is Puma’s first NBA signee in roughly twenty years, when they nabbed then-rookie Vince Carter to ten-year, $50m deal. However, it’s worth noting that their ten-year deal with Carter only lasted about 15 months. Not because the company was struggling or because the two sides agreed that it would have been best that they go their separate ways, but because the signature sneaker Puma launched for Carter, ‘The Vinsanity’ was incredibly uncomfortable to Carter, and he wanted to leave for greener pastures.
Their split included:
- A press release from Carter which stated that he’d no longer be endorsing the brand
- A terminated Rookie of the Year celebration campaign
- A Boston arbitrator ordering Carter not endorse any competitor of Puma’s for the next three years (broken only months after the dispute drew its conclusion)
- $13.5m in legal damages and an extra $1.5m in legal fees that Carter was legally ordered to pay Puma, which was paid by Nike on Carter’s behalf
- An additional $5m Nike paid Puma in order to clear Carter’s initial contract
- An incredible quote Carter gave to reporters on his then-reported deal with Nike, “I just got out of a Puma suit, how could I have a deal already?” The deal was complete within the next two weeks of that quote.
So yeah, the divorce wasn’t pretty. The damage of it was enough to severely change Puma’s image to any of their perspective NBA signees. And so, they left the market.
Now, twenty years later, they’re trying to push themselves back in the door, and it doesn’t seem like they’re stopping with Marvin Bagley. It’s also now been reported by The Oregonian that the brand is close to signing a deal with Deandre Ayton. On top of that, there are rumors which suggest that Puma has invested nearly $50m into the development of its new basketball division within the last year.
Not only that, but this comes only days after Puma’s record-breaking sponsorship deal with Manchester United Striker Romelu Lukaku.
With all these moves, it’s clear that Puma is more than eager to make noise in the market of athletic sneakers. As far as risk, they don’t really have much to worry about in soccer. But it may not be the case in basketball.
Given that they’re willing to invest so much in basketball, it only seems fair to question whether or not they should.
Even though sneaker culture appears to be at an all-time high, the cultural value of non-retro basketball sneakers is nearing an all-time low. As it currently stands, performance basketball sneakers make up only 5% of the overall sneaker market. Of which Nike, adidas and Under Armour mostly control (in that order).
On paper, it wouldn’t be impossible for a fourth brand to force its way into the conversation, but Puma won’t be the only brand vying for some semblance of spotlight. Hell, they wouldn’t even be the only start-up.
Before they can focus their attention on the big boys, they’ll have compete with already established secondary brands like Anta, Li-Ning, Peak, BrandBlack; recent startups like Big Baller Brand and Q4 Sports; and the reboot of And-1.
Point being, the market is as crowded as it is stagnant. So again, why are they doing this?
Maybe it’s because they’re liking the progress they’re making, or that they truly believe their designs and tech are enough to relight a spark in the market. Or it may be because, unlike every other second-tier brand outside of And-1, they’ve been here before. That and they actually have the capital to back this re-venture into the basketball sneaker market.
Over the past two years, Puma has completely reshaped its image and its relationship with artists and athletes alike. To start, heir partnership with Jay-Z and the naming of Rihanna as their Creative Director has paid dividends, with their sales seeing a 15% rise for the 2017 fiscal year over 2016. They certainly seem to think that combined with their experience can lead to a winning formula.
However, it’s only fair to bring into question just how valuable the brands experience is actually worth. After all, the way things drew to an end the first time can only be considered as failure.
In fairness to Puma, they didn’t fail when the sneaker industry was booming. As a matter of fact, sales of basketball sneakers were falling at the time in a way we hadn’t seen before. In context, it makes sense: Michael Jordan was gone again, only this time there wasn’t much hope for a return, Penny Hardaway’s line had just about run its course, Kobe was putting out whatever space shoe mistake those were with adidas and retros hadn’t really caught on as a trend yet.
The landscape looked bleak, and just about every brand suffered. Converse was going under, Puma had to cut Serena Williams from its books, Reebok cut Shaq’s $5m annual contract from theirs and even Nike, who held as dominant share in the market as ever, sliced $100m from its endorsement budget at the time.
Pretty much no one knew what the consumer wanted, so it’s hard to fault Puma for leaving the market altogether.
Times are different now. As it currently stands, brands seem to know exactly what consumers want: comfort and style over everything else. The issue today is that, given the aesthetic limitations of modern sneaker tech specs, what the consumer wants isn’t what NBA athletes hold as their top priority in performance sneakers. Which is why casual/athleisure sneakers have such a hold on the market.
If the average sneaker customer doesn’t want a basketball sneaker, they don’t really need one. Because with as flooded as you may think the market may be with basketball sneaker brands and their designs, there are way more in the casual/athleisure market. And, based on the reactions toward the recently leaked images of the adidas Harden Vol. 3, Dame 5 and (potentially) Wall 3, the divide is growing.
Maybe Puma has a compromise to this. One that could bridge the gap between both the NBA athletes’ tastes and the average consumers’. Maybe they don’t. And maybe they don’t care to. After all, when they split with Vince Carter back in 1999, basketball sneakers only accounted for 2.9% of their consolidate net sales. Perhaps that’s all their looking for with the addition of Marvin Bagley III: a new venture which won’t hold any substantial weight as far as the overall direction of the brand’s future is concerned.
Regardless of their purpose, this is still a move that deserves a lot of attention. Their potential success and the impact it holds could seriously shake-up the sneaker game.