Reebok goes toe-to-toe with Nike If Michael Jordan returns to the NBA, his fiercest competition both on the court and in the shoe stores might be the same guy: Allen Iverson. While the Philadelphia 76ers superstar guard is a household name for pro basketball fans, he remains a relative unknown for the same swath of Middle America that thinks Radiohead makes radios and Snoop Dogg is a comic strip character. Now, on the eve of Jordan's rumored return to the court, upstart Reebok has high hopes to take on sneaker giant Nike by making Iverson the next Jordan. A household name. A cash register ringer. A brand the way Jordan is for Nike. But it's no slam dunk. Far from it. For Reebok, the stakes are huge. It has already invested $48 million in a 5-year contract for Iverson — expected to be renewed soon at a hefty increase. And it's easily spent two, three or even four times that amount blitzing TV and magazines with Iverson's image. Beating Nike is "definitely our long-term goal. But it takes time. Nike has put a lot of effort into being No. 1," says Todd Krinsky, the 30-year-old general manager of Reebok Sports who recruited Iverson while he was still a Georgetown University player. Betting on Iverson to win close games is one thing. Betting on Iverson to sell shoes à la Jordan is another. Hip-hop Iverson, with his tattoos and a police rap sheet to go with his rap lyrics, will never be mistaken for the polished, charismatic Jordan. Marketers haven't confused them. Despite leading the National Basketball Association in scoring and earning MVP honors last season, Iverson, 26, has just two deals — Reebok and Sega. "Iverson is mostly selling shoes back East," says Andrew Woolf, co-owner of World Class Sports, a sports marketing firm that matches celebrities with top marketers. "I don't see many of Iverson's Reeboks here in (Los Angeles). But Jordan's shoes sell just about anywhere." Iverson is hot now, Woolf adds, but he predicts "fans will tire of his routine." And Jordan, 38, the NBA legend who's considering a comeback, is Madison Avenue's all-time endorsement MVP. He has earned nearly half a billion dollars in his career as a pitchman for a dozen companies in addition to Nike. More than 3 years after retiring, MJ still takes in an estimated $40 million for endorsements. But the 6-foot, 165-pound Iverson's fearless performance against 7-foot-1 Shaquille O'Neal and other heavyweights in the NBA Playoffs has helped morph his image from bad boy rapper to underdog hero. "It's been an amazing transformation to watch," says Paul Fireman, chief executive of Reebok. "The adults who looked at him as an outcast and a tattooed villain now admire his tenacity and his love for the game." And buy his stuff: Iverson's No. 3 is now the NBA's hottest-selling jersey. His basketball shoe from Reebok — called the Answer, after Iverson's hoops nickname — has joined Nike's Air Jordan among this year's Top 10 best sellers, says research firm SportScan Info. Iverson's off-court team is already looking beyond sneakers to giving Jordan a run for his money all along Madison Avenue. "A lot of Corporate America is very interested in Allen now. He can pick right up where Michael left off," says Gary Moore, his personal manager and president of CrossOver Promotions in Iverson's hometown of Hampton, Va. That's bold talk. But first the Sneaker Wars, and here Moore seems a little more restrained. "I can see the potential for Allen Iverson and Reebok to equal, if not surpass, Michael Jordan and Nike," says Moore. Cash on the court Big money is on the line. While Reebok may be on the comeback trail, Nike is still the goliath in the $15.1 billion U.S. athletic footwear market. The market is growing again: After 2 years of decline, sales rose 3.6% in 2000 and are expected, even in this year's soft economy, to be up again by low single digits, says Mike May of the Sporting Goods Manufacturers Association. Nike's $9.5 billion annual sales dwarf No. 2 Reebok's $2.9 billion. Two of three NBA players wear the Swoosh, and Nike sells eight of this year's 10 best-selling basketball shoes, according to SportScan. And five of those shoes are Jordan models. "Our retail sales tell the truth of what's happening," says Greg Johnson, marketing director of Nike's special 4-year old Jordan brand, which generates more than $300 million in annual sales of shoes, apparel and other gear. "Consumers decide what's hot. They're voting at the retail level — with their wallets." But buzz among fickle young urban consumers is what makes products hot or not in this market. Trend-watching sports marketers say the buzz in recent months has been mostly about Iverson. "Michael was the main man in the '80s and '90s, and Nike was the lead shoe brand," says Nova Lanktree, president of Lanktree Sports Celebrity Network in Chicago. "Now Allen is one of the premier stars. And Reebok could be the sneaker of the 21st century." Nike scoffs at Iverson's supposed youth edge. "Go ask the retailers about the difference when they launch a Michael Jordan shoe. Or an Iverson or Kobe (Bryant) shoe," he says. Nike releases Air Jordan models on weekends to stop kids from cutting school. A potential ace for Nike is the possibility that Jordan, now part owner and president of basketball operations for the Washington Wizards, will lace up his Nikes again this year. How long he'd play is a question, but it would be a big event in the short term. Jordan is expected to make the call on a comeback by mid-September. "Every time he comes back, it's a new chapter in his life. And consumers find a new way to love him," says Bob Scott, vice president of marketing for Hanes, which is featuring Jordan in a new TV commercial for its underwear. Working on an image But as the Hamlet of the hardwood ponders another career move, Iverson is building momentum for an endorsement fast break. Consider: Iverson's marketability is rising. In April — before his playoff star turn — The Sports Business Daily ranked him fourth on its list of the NBA's most marketable players, behind Bryant, O'Neal and Vince Carter. He has a "terrific chance of moving up" in the next survey, says Andy Jasner, assistant editor. Jasner "absolutely" believes Iverson can challenge Jordan as an endorser. But he also says the old lion still has teeth: Even though the survey of 70 industry experts was limited to active players, Jordan still got three first-place votes. Sports bad boys are back in style with advertisers. The likes of Bobby Knight, John McEnroe and Latrell Sprewell have landed recent deals. "The world has changed since Michael was at the top. There's a new kind of icon and a new type of hero. Allen can be the basketball icon of this new generation," says Reebok's Krinsky. A current Reebok ad, by agency Berlin Cameron and Partners, New York, gets in the face of The Answer's critics with a litany of his accomplishments followed by the challenge: "Any more questions?" Iverson's managers may bring in sports marketing shop Octagon to help land endorsements. Iverson has not worked with a major shop since splitting with super agent David Falk in 1999. Octagon represents Anna Kournikova and Martina Hingis in tennis and David Robinson and Jerry Stackhouse in basketball. And it's a unit of Interpublic, the world's biggest ad firm. Octagon executives declined to comment. Off the court, Iverson married Tawanna Turner, the mother of his two children, on Aug. 3. Iverson's history of off-court troubles, however, still makes Madison Avenue cautious, warns Brandon Steiner of Steiner Sports Marketing. Before this breakout year, Iverson was seen by some as symbolic of a troubled, post-Jordan NBA. He was nearly traded before his MVP season after battles with 76ers coach Larry Brown. NBA Commissioner David Stern publicly rebuked Iverson for what many saw as misogynist and homophobic lyrics on his debut rap CD last summer. He records under the hip-hop alter ego of "Jewelz." Iverson was jailed after a bowling alley brawl in 1993, although the Virginia Court of Appeals overturned his conviction 2 years later. He also was arrested in 1997 on drug and gun charges that were later dropped. Iverson's two corporate partners stuck with him through these troubles, and now get to reap the benefits. "We were one of the first to align ourselves with Allen, and it has worked out very well," says Stacey Kerr, senior product manager for Sega Sports, which has Iverson on a video game. Meanwhile, by his own admission, Jordan is losing interest in endorsements, unless, as with his Nike venture, he gets an ownership stake or input into the products. And even at Nike, Jordan seems to be taking a back seat in buzz now to Tiger Woods, the USA's new endorsement king with a take of about $55 million per year. "Michael is living off the residue. He really isn't pursuing anything new," says Lanktree. As their two very different pitchmen square off, Reebok aims to match Nike shot-for-shot with merchandise. Nike has the Jordan brand and a new Two3 (Jordan's playing number) line of shoes and apparel. Reebok is answering with Answer shoes and MVP and Off-the-Clock sports gear and fashion lines. In 2002, Reebok even plans an Iverson line aimed at women. Even Jordan's Wizards will eventually be wearing Reebok logos. Fireman scored an estimated $175 million, 10-year deal with Stern this year to become the exclusive NBA team outfitter. Reebok takes over rights to the Wizards at the 2004-2005 season. The NBA deal follows a similar $250 million, 10-year deal with the National Football League. "They were presumptuous," says Fireman about rival Nike's approach to the NBA talks. "We didn't outbid them. We just had a better business plan. All this investment has had some payoff already — Reebok posted a 33% increase in profits for the second quarter, for which the company credited hot sales of Iverson products. The key to more endorsement dollars for Iverson will be staying edgy — keeping the outlaw image that has consumer appeal — without going over the edge. Krinsky says Iverson simply will continue to keep it real. "He won't change who he is," says Krinsky. "He constantly hears about the tattoos and the cornrows. But he hasn't changed."		Author Michael McCarthy   Source USA Today   Return to Articles