Durant’s Decision: How Star Athlete Departures Impact Brands, Retailers

When a massive sports superstar like Kevin Durant or LeBron James elects to depart one team for another in the greener pastures of free agency, such a move can send shockwaves not just through those teams or that sport but also through a string of brands and retailers who have aligned themselves with that star and their particular image over the years.

An image that suddenly — and for better or worse — gets an abrupt reinvention, leaving many jilted (former) fans, not to mention countless hours of advertising associating the superstar with their former team and image, as well as the tons of extra apparel, merchandise and memorabilia left lying around after such an abrupt departure.

Such was the case again this Fourth of July weekend when Durant, a former NBA MVP and four-time scoring champion, announced he was leaving the only team he had ever played professional basketball for through nine seasons, the Oklahoma City Thunder, to sign a two-year, $54.3 million contract with, arguably, the most popular and talented team in basketball at the moment, the Golden State Warriors.

Call it a “basketball decision,” as Durant did in describing his departure to the media, or an elite star in his prime opting for an easier path toward the one thing that has thus far eluded him — an NBA championship — or a young man at the top of his profession taking the opportunity to fully cash in on the many career, personal and endorsement opportunities that his illustrious career has earned him.

But Durant’s departure will have further reaching consequences than just tipping the balance of power in the NBA.

Possibly, the best matrix to examine Durant’s departure from the small market and oil fields of Oklahoma City to the bright lights and booming tech city vibe of the Bay Area is through James, another global megastar who has switched teams not once, but twice (jilting his hometown Cleveland Cavaliers for the Miami Heat in 2010 and then opting to return home in 2014 after winning two titles in South Beach).

From an economic standpoint, James’ departure, which he announced in a highly controversial one-hour primetime special broadcast on ESPN entitled “The Decision,” was immediately felt in Cleveland and to the value of James’ own brand.

The Cavaliers’ attendance dropped from the third-highest in the league during James’ final season in town, a sellout every night at 20,562 spectators per game, to just 80 percent capacity, or 16,200 per game, in less than two years after his departure.

Forbes also dropped the value of the Cavaliers franchise, ranked fifth in the NBA before James left at $476 million, to $355 million during that same timeframe, a drop of more than 26 percent.

And that says nothing of the opportunity costs that James and his brand suffered as a result of “The Departure.”

ESPN and the other sports networks were ripe for days with images of fans burning James’ jerseys in the streets of Cleveland. His commercials almost disappeared from the airwaves overnight (only to slowly return), and his line of Nike-endorsed shoes and apparel also suffered a hit from the controversy.

In one ill-fated primetime special, James had ditched his golden boy image for that of a remorseless villain who seemed more interested in fame and success than loyalty or the area where he grew up.

All that slowly came back as James went on to appear in four NBA Finals in Miami, winning two of them, before shocking the world by announcing in 2014 that he was returning to Cleveland to help that city win its first professional sports championship in over 50 years just last month.

It remains to be seen if Durant’s decision will impact him and his brand as negatively as James’ move to Miami did at the time.

Although some fans have already begun burning his jersey, too, Patrick Rishe, director of the business and sports program at Olin Business School at Washington University in St. Louis, who wrote a column about the economic impact of Durant’s departure for Forbes shortly after it was announced, doesn’t think Durant did as much damage to his brand as LeBron did with his move.

“This was handled much better than LeBron handled ‘The Decision’ in 2010,” Rishe said by email. “That said, minimal backlash to the KD brand. It will only help his brand.”

Perhaps Rishe is right in the long term, as playing in a bigger market on a bigger stage with more nationally televised games and competing for (and hopefully winning) multiple NBA championships might only serve to make Durant’s brand more valuable.

As of late Tuesday (July 5) afternoon, Nike had not dropped the prices of any of its Durant merchandise on its website — Nike signed Durant to a 10-year, $300 million endorsement contract in 2014, at that time one of the richest sneaker deals for an athlete ever — and reports have begun to circulate that Nike is actually happy that Durant opted for a bigger market and more career opportunities at Golden State.

However, both Champs Sports and Dick’s Sporting Goods dropped the prices on most Durant merchandise on their respective websites on Tuesday, with $110 jerseys selling for as little as $55.

Ironically, Durant joins a Golden State team that includes Stephen Curry, the two-time reigning NBA MVP and the brightest endorsement star for Nike’s biggest rival, Under Armour.

Curry might be the only NBA superstar outside of James and Durant whose shoes and sports apparel move at a faster clip, with Morgan Stanley recently pegging Curry’s value to the Under Armour brand at north of $14 billion.

Forget how next season between the Cavaliers and the Warriors plays out on the court, with two of the NBA’s top merchandising dogs now inhabiting the same yard in Golden State, it might be more interesting to see how this impacts the burgeoning retail war between Nike and Under Armour.