Adidas BETRAYING LeBron James cost the brand $1 billion and race against Nike

Adidas's costly decision to back out of a shoe deal with LeBron James cost the brand $1 billion and set it on a race against Nike.

Adidas BETRAYING LeBron James cost the brand $1 billion and race against Nike

Sonny Vaccaro and how his story with Nike ended (Image: FS)

In 1984, Adidas committed a monumental blunder in the history of shoe endorsements by declining to match Nike’s offer to Michael Jordan. Two decades later, in 2003, Adidas had an opportunity to make amends for that mistake by securing a shoe deal with the high school sensation LeBron James. However, astonishingly, Adidas fumbled this opportunity once more.

According to Sonny Vaccaro, a former Adidas executive, he and the company had reached an agreement to provide LeBron James with a guaranteed $100 million for a shoe deal. However, during the presentation, Adidas altered the financial terms. The Adidad CEO wasn’t sure it was a good idea to commit that much money to an 18-year-old who hadn’t played in the NBA yet. Eventually, James signed a 7-year, $87 million deal with Nike on May 22, 2003.

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Vaccaro stated, “We were at a tournament during LeBron’s senior year, and I made a statement – not an offer – a statement to the James team: ‘LeBron, Gloria, when your son signs, he’s going to get $100 million. Adidas rented an unbelievable house in Malibu, and we put the contract on the table. Gloria and I flipped it over, and I couldn’t believe what I looked at. The numbers changed. My number changed. I told Mr. James, ‘This is what your value is,’ and now, I was giving him a number that wasn’t what my appreciation of his value is. It was over. There was no way in hell they were going to sign.”

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Adidas withdrew from its initial arrangement with Vaccaro. Rather than guaranteeing $10 million annually, they proposed $7 million per year, supplemented by performance-based incentives that could potentially reach $10 million annually. While still a substantial sum, it fell short of what Vaccaro had conveyed to LeBron and his mother.

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Following the incident, Vaccaro decided to step down from his position at Adidas, branding it as “the most regrettable blunder ever made in the annals of negotiations.” His assessment appears to be accurate.

Adidas Dame 8
Adidas Dame 8

Similar to the situation with Michael Jordan 19 years prior, Adidas held a competitive edge over its rivals. The brand had an exclusive sponsorship deal with the St. Vincent’s – St. Mary’s High School basketball team. LeBron even praised the comfort of the Adidas Pro Model 2G, declaring it the most comfortable shoe he had ever worn.

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