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Sports apparel giant Adidas announced on March 16 it isn’t renewing its contract with the National Basketball Association. The deal is set to expire after the 2016-17 NBA season.

Adidas is not renewing its contract with the Natinal Basketball Association. 

Adidas made the announcement on March 16. Its apparel deal with the NBA will expire after the 2016-17 NBA season, per ESPN’s Darren Rovell. Adidas fell to third in the shoe and apparel industry behind Nike and Under Armour in 2014. Nonetheless, the NBA inquired about a contract renewal. Adidas, a German company, decided it would no longer do so.

Rovell obtained a statement from Adidas spokesperson Lauren Lamkin explaining the company’s side on the matter:

“While we have enjoyed a successful long-term relationship with the league, we continually review our partner agreements to ensure they are meeting our investment and delivering on our brand and business needs.

“We are reimaging and reshaping our business and have evolved our strategy to look at new, cutting-edge ways to drive our brand and support our business over the long term. We will invest more in telling stories that matter to our consumer, building category-disrupting innovative products, reinvigorating youth basketball with our new Next Generation programs and doubling our roster of professional athletes to authenticate our brand on-court.”

adidas to end apparel deal with the NBA after 2016-2017 Season
http://t.co/dpJHgaR8EU pic.twitter.com/PgoI6i7sZZ— XXL Magazine (@XXL) March 16, 2015

Rovell reached out to NBA spokesman Mike Bass, who said the league has no comment.

Adidas not renewing its NBA deal happens just two months after its new president for North America, Mark King, said “the company would sign as many as 250 new NFL endorsers and 250 Major League Baseball endorsers,” per Rovell.

According to Fortune.com’s John Kell, it was just three years ago when Adidas lost out to Nike in a bid to design and sell NFL jerseys. Adidas estimated its losses due to that setback would be in the $200 million to $250 million range. 

The ESPN update says Adidas has been “under significant pressure” since its two main competitors, Nike and Under Armour, have taken center stage. Rovell adds they are expected to make a serious run to become the NBA’s official uniform supplier.

Kell says analysts attribute Adidas’ failure to keep up with Nike and Under Armour with styles that don’t resonate well with customers. To compensate, Adidas sent its European design team to its Oregon office. It also rehashed its marketing campaign to focus more on the U.S. athlete. 

Learn why the NBA has allowed other brands to compete for the their uniform deal. http://t.co/6LOix9cQIV pic.twitter.com/mKK23mPaGp— KicksOnFire.com (@kicksonfire) March 16, 2015

Kell interviewed King in January to get a more specific take on Adidas’ rebound plan:

“We have done OK in America, but we haven’t competed at a top level with the other two brands in the market — Nike and Under Armour. So whatever we have been doing, it hasn’t been working as well as we want. It wasn’t hard to convince people about that.

“If we’re going to compete, we have to do things differently. Because this doesn’t work. Yes, soccer always needs to be something that we focus on, but a sport we need to be involved in is football. There is a big investment in football.

“Secondly, yes, we’re a performance brand, but our designs need to resonate with the U.S. athlete. Until we look cool to an American kid, we aren’t going to sell any gear to them. 

“There are three opportunities for us. One is running; we have a market share there that’s not as strong as it should be. Basketball is another opportunity. And thirdly, the whole style side, which we call ‘originals.’

“We are going to put our money in those three categories — on everything from products to design, and advertising — and aim to gain market share through those categories.”

 Adidas extended its apparel and shoe deal with the NBA in 2006 when Reebok, which it owns, was five years into its 10-year deal, per Rovell. Adidas global basketball manager Chris Grancio told The Portland Business Journal (via ESPN) the current deal is worth $400 million.

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