Teen Phenom Scores Giant Nike Contract

LeBron James has yet to throw down a dunk in the NBA, but the Ohio high school phenom scored big Thursday with a seven-year, $90-million endorsement deal with sneaker giant Nike Inc., the most ever paid for an entry-level player.

James, 18, is expected to be the league’s No. 1 draft pick next month. And although untested in the pros, the 6-foot-8 player was so impressive in training sessions with various teams that many observers expect him to make an immediate mark in the National Basketball Assn.

Nike said that it was willing to plunk down the money because of James’ “tremendous talent potential,” as well as his “rare combination of showmanship and humility -- in huge doses.” Sports marketing experts say James has a proven ability to make cash registers ring, a dream for companies endlessly looking to re-create the gold standard of marketing magic that Nike forged with basketball great Michael Jordan.

James is “a little like the character Neo in the movie ‘The Matrix.’ There are a bunch of people who think he is The One,” said Rick Burton, executive director of the Warsaw Sports Marketing Center at the University of Oregon. “They think ... he’ll lead them back to that time when there was that dominating player that the whole league revolved around.”

In a prepared statement, James said that Nike was “the right fit and has the right product for me.”

Despite James’ potential, the deal represents a gamble for Nike. There’s always the risk of injury. Or the possibility that James will follow in the footsteps of several other once-promising high school athletes who, unlike all-stars Kobe Bryant or Kevin Garnett, have struggled in the NBA.

“There are still many things that have to go the right way,” conceded Lynn Merritt, Nike’s senior director for U.S. basketball, “but LeBron is set for success more than anyone we’ve seen in this game for a long time.”

The buzz about James’ athletic abilities and marketing cachet has been so deafening that Nike signed the teenager even though he faces the prospect of being picked by one of the league’s worst teams -- the Cleveland Cavaliers -- in one of the nation’s weakest media markets. On Thursday, the Cavaliers received the rights to the No. 1 pick in the NBA draft.

James first rocketed to national attention while playing with Akron’s St. Vincent-St. Mary’s high school team, averaging 30.4 points, 9.7 rebounds and 4.9 assists last season and leading the school to a state championship. There was so much interest in James that two of his games were broadcast by ESPN.

When ESPN2 broadcast the first of two high school games featuring James, it drew an audience of 1.67 million households -- the most for that network since Dale Earnhardt died in a crash at the Daytona 500.

James showed his selling power during a controversy earlier this year involving vintage jerseys.

After Ohio high school sports authorities briefly stripped James of his eligibility for taking two of the jerseys as gifts, teenagers all over the country mobbed stores for similar shirts, which continue to be among the hottest-selling sports accessories, said John J. Shanley, a Wells Fargo analyst specializing in the athletic footwear industry.

“If you’re getting that kind of strong demand that’s important only because of its association with LeBron James, think of what Nike will be able to do when they have a full line of LeBron James footwear and apparel,” Shanley said. “They will milk it for all it’s worth.”

James also signed an exclusive multiyear contract with Upper Deck trading cards Wednesday. That deal includes a $1-million signing bonus.

The sneaker pact puts to rest months of speculation and jockeying among Nike and rivals Reebok International and Adidas for the commercial rights to James’ future.

Aaron Goodwin, James’ Oakland-based agent, said the battle for James’ services was heated until the end. Adidas executives flew to Ohio from Germany on Monday, and Goodwin gave them an extra day to put a presentation together. But Adidas pulled out Wednesday, when it appeared Reebok would win. “Reebok was the front-runner,” Goodwin said. At 7:30 p.m. Eastern time Wednesday, Reebok CEO Paul Fireman gave a speech to James and his family at the Akron Radisson hotel. But they did not finalize a deal. Nike had one more chance.

“What turned the tide for Nike was they stepped up,” Goodwin said. “They knew that the kid loved the footwear and the apparel and the equipment they had designed for him. They decided they wanted to get something done.”

Nike upped its offer to just under $90 million and James accepted, triggering a flurry of faxes to consummate the agreement.

James had visited the company’s Beaverton, Ore., headquarters just last weekend for a presentation prepared by two dozen employees, including representatives of Wieden & Kennedy, Nike’s Portland advertising agency. Among the exhibits: a proposed LeBron shoe designed by Tinker Hatfield, the company’s footwear guru who created the look of Nike’s enormously popular Air Jordan line.

Reebok issued a statement Thursday saying it had simply been outbid. “Reebok’s largest competitor simply put more money on the table and in the final hour -- after carefully considering what is in the best interest of our business and our shareholders -- Reebok elected to not match this offer,” the statement said.

Shoe companies spend millions on athletes, hoping to duplicate the Jordan success story, especially in the lucrative basketball shoe category catering to young males.

Reebok has hit pay dirt with its Allen Iverson models and likewise Adidas America, with its T-Mac shoes named for Tracy McGrady.

For its part, Nike recently expanded its stable of stars, which includes the likes of Jason Kidd, by signing Syracuse University hoops standout Carmelo Anthony last Friday to a reported $3.6 million a year; it is in the hunt to lock up Los Angeles Laker Kobe Bryant.

The deal now means that James will make more per year on average from his shoe contract than he will playing the game that made him famous. Under the NBA’s rookie salary cap, James is expected to bring home about $12 million for the first three years of his basketball contract.

David Cornwell, a sports business attorney who used to be general counsel for Upper Deck trading cards, said a “competitive marketplace” dictated that Nike had to lay out major money to sign up James, despite the fact he hasn’t faced the sharp elbows of regular NBA play.

Cornwell said he watched James play college players such as T.J. Ford at the Jordan Nike camp in Santa Barbara last summer.

“It was ‘Cancel Christmas.’ This guy stood out,” said Cornwell, whose clients have included sports super agent Lee Steinberg. “Yeah, he hasn’t dribbled or taken a shot in the NBA, but all the evidence is that this guy is going to be a superstar.”

And in the arena of sports endorsement contracts as well, there will be few who will top him, predicted James’ agent.

“This is an exception,” Goodwin said about the Nike deal. “LeBron came in at the right time, the right space. It all worked for him. You won’t see someone next year getting a deal $1 million better than the LeBron deal.”

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Top endorsement deals

Here are some of the top single endorsement deals made by sports figures:

*--* Amount Contact of deal length Year Athlete (sport) Company (millions) signed Tiger Woods (golf) Nike $100 5 2000 LeBron James (basketball) Nike $90 7 2003 Venus Williams (tennis) Reebok $40 5 2000 David Duval (golf) Nike $28 4 2001

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Some athletes have multiple endorsement deals that may add up to more than the figures listed above.

Researched by Times librarian SCOTT WILSON

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Times staff writers J.A. Adande, Tim Brown and Larry Stewart contributed to this report and Associated Press was used in compiling it.