How do NBA shoe deals work?

Sneakers matter in the NBA. Sporting apparel companies have their fingerprints all over the league fans know and love, and virtually every player has some type of allegiance to one of these companies.

Sneakers are part of the dream for these players. They grew up idolizing the previous stars that had their own symbols. Think Michael Jordan, LeBron James, and Kobe Bryant — all athletes with signature brands, logos, and sneakers to go with their extraordinary talent.

The path to joining their idols starts with Thursday night’s draft. Not only will they find out where their new home on the court is, but most of them will start looking for a home off it with a signature apparel brand.

We’re here to break down how that process works.

What brands are we talking about?

The biggest three brands you’ll see in the NBA are Nike, Adidas, and Under Armour, in that specific order. China-based companies like Li-Ning, Anta, and Peak have made strides in recent years. And, of course, once Lonzo Ball is drafted, we’ll have Big Baller Brand in the mix.

But no company has pull anywhere close to that of Nike. In 2014, the swoosh had about 72 percent of the league’s athletes signed under contract, if we include Jordan Brand, which is a Nike subsidiary. They have a star-studded roster that includes the likes of LeBron James, Kevin Durant, Kyrie Irving, Draymond Green, Anthony Davis, Paul George, and, before he retired, Kobe Bryant.

They continue to build their roster each and every year. They most recently inked consensus No. 1 pick Markelle Fultz to a deal worth $1.5 million annually, per The Vertical, and already signed De’Aaron Fox to their roster before that.

Adidas has a solid roster of about 70 players that continues to grow. It includes players like James Harden, Damian Lillard, Joel Embiid, and Kristaps Porzingis. They also signed five lottery picks in last season’s draft, which is a big deal for a company looking to make waves. But they still have a ways to go before they can reach the heights Nike has hit.

Stephen Curry has been a solid brand ambassador for Under Armour, but the Warriors’ loss in last year’s NBA Finals, along with poor design in his Curry 3 shoes over last season, caused Under Armour’s basketball sales and overall sales to suffer. Still, Under Armour got a commitment from Kansas’ Josh Jackson, the first lottery pick to join the brand since Emmanuel Mudiay in 2015.

Other companies have made strides, but Nike is still king.

So how do players choose a company?

Just like they’d choose a team in free agency. An athlete has his or her choice in what product they’d like to endorse. There are several factors that go into the product they choose, and some can get personal.

Helen Dooley, the senior vice president of Tandem Sports, said many players grow up wanting to endorse a certain product or thing. It’s about the money and the benefits they can get, but the basic tenet is always this: “Does this brand reflect who I am and give you a broader platform,” Dooley said.

“There’s certainly the opportunity to create a business with a brand is a great opportunity for any player. Even if you don’t have your own signature shoe, there is a chance to align with a brand you believe in,” she said.

Obviously, money comes into play here, too. The company that offers a player the most will probably walk away with a deal. That’s how Dwyane Wade ended up with Li-Ning and Klay Thompson moved to Anta.

But what else do those companies offer? A bigger stage than they had before. And for Wade, he also gets design input on his shoe and hosts his own blog. That’s something he would never have at Jordan Brand where he was previously.

So does everyone get a signature shoe?

No way.

In fact, it’s very rare for NBA players to get signature shoes at all. There are only 17 athletes in the league right now that have one, and one of them is Matthew Dellavedova for PEAK Australia. Russell Westbrook has a signature Jordan Brand shoe, but it’s never worn on court. Lonzo Ball will join that list once he enters into the league, so lets go with 18.

Most players don’t even get to talk shoe design, let alone their own signature line created by the company. That sort of deal is reserved for the best of the best. Outside of Ball, who is independently endorsed, you won’t see a rookie donning a signature shoe this fall when the season starts.

Most players don’t get their own signature line until years down the road. There are exceptions, of course, like Kyrie Irving, who rose to prominence early in his career. But even that took three years to happen.

So if it isn’t a signature deal, what kind of deal is it?

There are typically three types of deals players will see in the league, Dooley said: Merchandise deals, cash deals with player-exclusive color ways, and the rare signature shoe lines we previously discussed.

“Merch” deals are for the NBA’s rank-and-file. Players are provided merchandise from the brand up to a specific dollar amount, and it re-ups annually.

Players are allowed to share that merchandise with whomever they want. Say Player X has a brother who needs a new pair of shoes. He can use his merchandise deal to order him new shoes if he so chooses.

Merch deals also come with bonuses, Dooley said. Small things like winning the skills challenge during All-Star weekend, or winning the All-Star Game MVP can be used as performance bonuses to earn players extra cash within their deals.

As a player progresses and gets better, merchandise deals become attached with cash. A cash deal is typically valued at at least $200,000 to $250,000, Dooley said, with some exceptions for higher-end players. And cash bonuses are still part of the deal along with the merchandise provided by the company.

“That’s not a huge amount of money for most players, but a decent amount depending on who you are,” Dooley said.

As players continue to progress, they get player-exclusive shoes that come with their own personal logo and branding on a team-specific colorway. As an example, Kevin Love has his own logo on Nike’s Hyperdunk silo.

While merchandise deals are usually annually renewed, cash deals can be three to five years long, with perks and bonuses in the contract for the player.

Signature shoe deals are reserved for the best players in the league. And sometimes the deal can be for hundreds of millions of dollars over more than a decade.

“That’s going to be for a player that they want to keep in their stable for the duration of his career,” Dooley said.

James Harden just inked one of those deals with Adidas last year, netting him $200 million over the next 13 years. LeBron James has a deal for the rest of his life with Nike. These companies normally don’t like to let success walk away.

And all contracts include the apparel company having the right to first refusal after a deal is expired, as well as a match clause in case an athlete or celebrity chooses to negotiate with another brand. Like restricted free agency in the NBA, once your matched up, you’re in for the long run.

But that doesn’t mean players stay in one place forever. You’ll recall the famous story of Curry bolting to Under Armour because Nike did not respect him.

Why does any of this matter?

We tend to think the NBA’s primary employer is their actual team, but LeBron James will make more money in his lifetime from Nike than he will from the Cleveland Cavaliers.

These brands matter. Each and every rookie that signs with one has a chance to move up in the company ranks and become a star athlete. These are the players you’ll be seeing in commercials and on billboards. They’re wearing the sneakers your children or younger siblings will want to wear.

Branding is a huge part of the NBA and sneakers play a big role in it. It will be really exciting to see where these young players all begin their journey to stardom.

Where have the top picks signed?

Here’s what we know so far:

Markelle Fultz: Nike
Lonzo Ball: Big Baller Brand
Josh Jackson: Under Armour
Jayson Tatum: Nike
De’Aaron Fox: Nike
Jonathan Isaac: Nike
Malik Monk: Nike
Dennis Smith Jr.: Unsigned