When he announced his return to the Cleveland Cavaliers, NBA superstar LeBron James rededicated himself to bringing the beleaguered organization and city its first major sports championship in half a century. Unfortunately for Nike, James’s public redemption and good intentions might not help their bottom line in the long term unless he brings a title to Cleveland.
The global apparel conglomerate and basketball icon unveiled the LeBron 12s on Tuesday at Nike headquarters in Beaverton, Oregon. With multiple colorway options and hexagonal cushions called “Nike Air Zoom Units,” the new kicks will hit U.S. shelves on Oct. 11 and retail for $200. But once new colorways come out, the average price might skyrocket, with a pair of LeBron 11 Elite “Maison LeBron” costing $295 on Nike’s official site.
The question is: Will James's sneakers continue to fly off shelves after returning to a much smaller market after four years with the Miami Heat?
According to Paul Swangard, Managing Director of the Warsaw Sports Marketing Center at the University of Oregon, James’s marketability will probably be immune to market dynamics in his first season back in Cleveland.
"LeBron returns to Cleveland as a champion and his marketability is buoyed by the success in Miami,” Swangard told International Business Times in an email. “Still, the risk to his shoe sales and his overall marketability is higher in a small market where his on-the-court success is almost an imperative. He will have a honeymoon with consumers in year one, but sustained interest will be driven by future success.”
It appears James and Nike are already enjoying that first season honeymoon. According to CNBC, James’s shoe sales have risen an estimated 25 percent. However, that’s half of the bump James’s sneaker line received when he left for Miami back in 2010.
Nike might not be too concerned with the four-time MVP’s change of heart, since James’s shoe line appears immune to the ebbs and flows of the market, or if he even wears them. In 2013, James’s sneakers raked in $300 million, roughly one percent of Nike’s reported $28 billion in revenue, according to CNBC. And as the Wall Street Journal points out, James rarely wore the LeBron 11s last season and the Heat didn’t win the NBA title.
Nike can also bank most of its dominate sneaker market share on NBA legend Michael Jordan’s self-titled line. The Jordan Brand pulls down $2.5 billion in annual sales and holds a 58 percent market share.
"Jordan entered the market in a different era, and continues to evoke the aspirational traits that resonate with consumers. I see Jordan continuing to enjoy a strong market position," Swangard said.
No basketball player of their brand has come close to matching Jordan, but David Carter, executive director of USC's Sports Business Institute, said James does have that potential. Carter said market size no longer plays a significant role, with the NBA's fanbase expanding internationally.
“Jordan is a transcendent, iconic brand that resonates with fans and consumers of all ages," Carter said. "He was the first in this regard during the beginning of the big money era in sports. James may very well overtake Jordan over time, and may do so as the NBA becomes an even more popular league highlighted by superstars like James.”
Swangard also believes that in the long term, sales of James’s sneakers will likely have more to do with the consumer’s attraction to the aesthetics and comfort level with each pair.
"I think LeBron has the potential in winning back consumers who held a grudge over his departure in Cleveland," Swangard said. “Still, it has as much to do with the consumer liking the style and fit of the shoe [versus] athlete personality traits.”