For the viewers, we see the NBA Finals as just a battle for supremacy in the league between the top team out of the East versus the top team out of the West. However, the finals is more than that; it is also a financial powerhouse that fuels teams through ad revenue, players through endorsements, and arenas through ticket sales and other placements. Everyone is excited about Game 6 of the NBA Finals between the Golden State Warriors and Cleveland Cavaliers. As you know, the Warriors are up 3-2. Even though we’re still waiting to crown the NBA champs, there are already two clear winners: the television networks and those who advertise.
The NBA, more so than the other professional sports organizations, makes a considerable amount of money through advertising and endorsements. In fact, Marketplace.org reported that television network ABC last year brought in more than $158 million in advertising revenue from the series between the Dubs and the Cavs. The Warriors, led by 2-time MVP Stephen Curry, have been the most electrifying team this season, winning 73 games and are on the verge of winning back to back titles. Analysts recently analyzed Curry’s impact on Under Armour, who signed him to a major endorsement contract. The company’s basketball shoes sales have skyrocketed, thanks to Curry’s signature shoe and his rise to fame.
Morgan Stanley analyst Jay Sole estimates that the way Curry continues to dominate the league, his brand will add an additional $14.1 billion to UA’s market capitalization; note that Jay gave UA an underperform rating on the brand. Think about it for a second, Under Armour’s current market capitalization per the NYSE is $15.2 billion. Jay is saying that Curry’s brand alone could increase UA’s market cap to $29 billion. His potential net worth to UA is one that could rival Michael Jordan’s net worth to Nike.
As noted by Fortune Magazine, Under Armour CEO Kevin Plank said this about Curry and his impact on his footwear division. “We’re just beginning to see what partnering with the right athlete, like Stephen Curry, can do for our business,” he said. If the Warriors win the title this year behind a huge performance from Curry in Game 6 or 7, who knows how this will impact UA’s valuation. I’m excited to see Curry’s impact on the NBA and Under Armour.