GumGum Sports: Nike Apparel Deal With NBA Generates $500 Million Annually On Social Media

Nike Inc NKE eight-year, $1 billion league-wide apparel deal with the NBA appears to be a steal for the sportswear giant, according to new data on the value Nike derives from the partnership.

Nike’s jersey deal with the league is generating north of $500 million of exposure value on social media alone, according to a new report from GumGum Sports, an AI marketing firm focused on sports media. 

When Nike took over the jersey sponsorship from previous sponsor adidas AG (ADR) ADDYY it was the first time a company’s logo was featured on every jersey in the NBA. The transition to Nike started out rocky, with several players' jerseys ripping in the first week they were put in play, including that of the company’s flagship endorser LeBron James.

The move was a keen one by Nike, a brand that is nearly synonymous with the NBA — which may be how the company was able to negotiate placing its logo on every jersey, meaning that even company's key endorsement competitors like Under Armour Inc UAA's Steph Curry would be consistently photographed sporting the swoosh logo.

“Nike’s apparel deal is a huge hit. What we are talking about is still just a portion of the pie, but the social media piece of it is already worth $500 million a year for Nike,” Brian Kim, senior vice president of product management at GumGum Sports, told Benzinga. 

Nike’s jersey sponsorship is the most valuable ad placement in the NBA, trailed by the newly instituted jersey patch logos that are featured on 19 of the 30 NBA teams, according to GumGum.

Facebook, Inc. FB’s Instagram is far and away the most valuable platform for the NBA, where 80 percent of endorser value is generated on social media.

“A lot of companies focus on the value of an endorsement derived on the broadcast side, [but] we felt we should bring this application to show in real time what the value of sponsorships on social media look like,” Kim said.

“In broadcast you generally only get one piece of footage for your broadcast clip. Social media gives brands an area where you can produce, generate and create branded content in an unlimited amount and interact with fans on a daily basis.”

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Photo courtesy of Nike.