At the 11th hour, Nike just simply couldn't let Kevin Durant walk away.
With Durant on the verge of a move to Under Armour, sources told ESPN on Sunday that Nike has exercised its right to match any rival shoe company's offer to the Oklahoma City Thunder star.
Nike has countered Under Armour's offer of between $265 million and $285 million and believes it will keep Kevin Durant for the next 10 years, sources told ESPN. Nike, whose seven-year deal that guaranteed Durant $60 million is expiring, made an initial offer of about $20 million a year that was far from what Durant was looking for. Under Armour's huge play for Durant had many believing that Nike would even let him go at that price.
The overall value of Durant's deal with Nike could hit $300 million or more if his business continues to rise. That number is flexible as he will get a royalty on all sales in his line.
But on Saturday, Nike officials told Durant and his team at Jay Z's Roc Nation Sports that it would indeed step up enough to allow the world's largest shoe and apparel company to keep him in its robust stable of basketball endorsers that includes LeBron James and Kobe Bryant.
While the exact Nike offer for Durant isn't known, sources told ESPN that Durant should make more -- in base and royalties -- than the Thunder will pay him over the next two seasons ($41.2 million). That's why fans in Oklahoma City were nervous about a possible move to Under Armour, which could have steered him more to returning to his local roots to play for the Washington Wizards when he becomes a free agent after the 2015-16 season.
Analyst Omar Saad, senior managing director of ISI's luxury, apparel and footwear team, who covers all the major brands on Wall Street, said that, despite the negotiations coming down to the final hours, he always believed that Nike would win Durant's services.
"For Nike, this was nothing to them," Saad said. "They could easily build Durant's business enough, assuming normal margins, where they could generate a cash flow of $60 million a year. And Nike is really good at monetizing its marketing assets, way better than anyone else."
Saad said, for Nike, Durant satisfies a niche that makes him different from James, Bryant or the Jordan brand. Durant's signature "KD" shoes generated $175 million at retail this past year, according to SportsOneSource, a market retail tracking firm. Not only was the business on the rise, but one retailing source told ESPN that Nike left plenty of money on the table with Durant's shoe at $125 and relatively limited distribution to stores. Simply raising the price and opening up more channels could make the deal worth it, the source said.
It looks like Nike has offered enough to land Durant, though it could be argued as to whether its an exact match to the Under Armour deal. Under Armour's offer included 10 percent stock, which one could argue makes that offer worth more than its present day value.