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Adidas Will Not Renew Apparel Partnership With NBA

On Monday, Adidas announced that they will not be renewing their deal with the NBA to produce jerseys and apparel following the 2016-17 season.

This is quite a surprising announcement as the NBA and Adidas has had tremendous success since they partnered up back in 2006. Adidas is not backing off the basketball market though, their actually investing more money into it than ever.

Nike and Under Armour are expected to make a bid to become the leagues apparel partner beyond the 2016-17 season. Via Portland Business Journal:

The German company has dropped its bid to extend its apparel contract with the league and instead will focus on developing new products, endorsing more amateur teams and doubling its roster of NBA players.

The company, which has its North American headquarters and basketball division in Portland, has been the league’s apparel partner since it signed an 11-year deal in 2006 for a reported $400 million. The company has been in talks with the NBA about an extension since 2012 but this month decided to walk away.

A source familiar with the bidding process said Adidas made the decision after it was informed last week that the NBA planned to open the competition to other bids. The source noted Adidas has fallen behind its competitors.

The move by the NBA likely meant Adidas would have been a longshot to renew.

Chris Grancio, Adidas’ global basketball general manager, said the deal hasn’t been as lucrative as hoped. Adidas has been unable to make up lost ground with Nike and its Jordan brand, which account for roughly 96 percent of the basketball shoe business.

“We haven’t been able to elevate our brand for the basketball consumer that we’re targeting,” Grancio said. “We ultimately decided that we would change our investment strategy and invest more in players on the court.”

Adidas also recently lost the No. 2 spot in U.S. athletic apparel sales to Under Armour. It remains a distant second to Nike in global sales.

With Adidas out of the picture, Nike or Under Armour will likely be the league’s apparel partner starting in 2017. Each is expected to bid on the contract.

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