Tuesday, February 6, 2018

"Derrick Rose's Adidas Contract: Breaking Down the Strange Terms"

SI:

Yet, as Jon Wertheim reveals in his story, Adidas repeatedly declined to invoke its reduction provision. While Adidas was under no obligation to pay Rose less money, it’s unclear why the publicly-traded company would not do so when presented with the opportunity. Adidas’ decision-making is especially hard to understand given Rose’s off-court controversies, which included a highly publicized civil trial for alleged sexual assault.

The company may be concerned that reducing Rose’s payments could cause its other endorsed athletes to question the company’s loyalty to its players. Yet, as Wertheim writes, Adidas terminated its deal with Boston Celtics guard Terry Rozier last December merely because he wore a pair of Nike sneakers in a pregame shootaround.

...

Rose and his representatives negotiated for Adidas to pledge up to $165,000 a year worth of Adidas sneakers and other products in support of AAU team(s) of Rose’s choice. The company also agreed to provide up to $50,000 worth of sneakers and other products to high school(s) of Rose’s choice.

Of course, Adidas could have also benefited from such arrangements. As suggested by the college basketball criminal case involving Adidas officials, sneaker companies view AAU basketball as a way of steering star players towards college programs that are also associated with the sneaker company and with particular NBA agents.