Patience has finally paid off for Dennis Smith, Jr. The Mavericks’ promising rookie is signing a three-year endorsement deal for $2 million annually with Under Armour including incentives, according to a report from ESPN’s Nick DePaula.
Under Armour has signed Dennis Smith Jr, Josh Jackson & Terrance Ferguson from 2017 Draft. They'll lead the Drive 4 & Charged Controller.— Nick DePaula (@NickDePaula) August 8, 2017
After receiving initial offers in June for less than $1 million annually, Smith and his camp decided to bide their time and wait for a better deal to come along. Smith’s highlight performances in the NBA Summer League catapulted him to his new multi-million dollar contract.
He was one of the most exciting players in Vegas, dunking with little effort during warmups while averaging 17.3 points along with 4.8 rebounds and 4.3 assists per game. He also showed off every bit of his 48-inch vertical with the most impressive missed dunk you’ll ever see. (Via Dallas Mavericks)
Smith previously developed a relationship with Stephen Curry, Under Armour’s leading athlete, at his SC30 camp and was impressive. Now he’ll join Curry on Under Armour’s roster and will be one of their most prominent athletes.
What makes Smith appealing for shoe brands?
Smith should’ve been a no-brainer for any of the big companies. He ended up being a late lottery pick at No. 9, but he’s one of the most athletic players in the draft class as a guard. Sneaker companies want to sign guards because of how often they have the ball. All eyes are always on them.
Plus, Dallas is one of the best media and television markets in the world, which makes Smith all the more enticing. Mix that in with his flashy play and athleticism, and he’s the kind of prospect that Nike and Adidas could regret not landing.
Adidas let Smith slip from out of their hands
Smith and Adidas have been synonymous for years now. He was a featured player in the Adidas Uprising tournament in California, where Adidas invites the top high school players from around the country to come play.
From there, Smith went to NC State — an Adidas-branded team — and played through his freshman season while rebounding from a torn ACL and meniscus he suffered at the Uprising tournament. But Adidas has been there every step of the way for Smith, and it was expected that they’d have a bit of pull on him because of their past together.
That obviously turned out not to be the case. Smith’s lottery position didn’t exactly help his cause, but Adidas missed out on an opportunity to sign one of the better talents in the draft class.
It hurts them a bit more because now they’re on the outside looking in with this class. The only lottery pick they have signed is Utah’s Donovan Mitchell. Last year, they signed Brandon Ingram, Jaylen Brown, and Kris Dunn.
Exactly how big is this for Under Armour?
This is a straight-up coup for Under Armour. This was always a possibility, but seemed unlikely to happen back in June. Nike came on strong and signed seven draft prospects early, but didn’t manage to grab Smith, who was regarded as the sleeper endorser of this draft. There are some who believe Smith could end up being the best player in this draft class.
Sneaker deals work similarly to NBA deals in that the later you get in the lottery the less money companies are willing to pay you — unless you’ve got some special appeal. Smith’s deal at $2 million per year is closer to what higher lottery picks typically get but with a couple more years tacked on instead of just three.
Smith is worth it for Under Armour because of what he could become. This is essentially like restricted free agency in a roundabout way. Under Armour was willing to dig deep in their pockets to entice Smith to sign. Other companies could afford to do the same, but they had to make a choice to and ultimately didn’t.
Now, Under Armour has Smith and Josh Jackson in its pocket as two top-10 picks with the potential to pay huge dividends in the future.
Kris Stone, Under Armour’s basketball sports marketing director, said Under Armour has to fight their way up to the top as the underdog.
If you look at all the other brands we're competing with, we're not even a quarter of their size and we're the underdog. Dennis was overlooked in the draft. We're both still trying to climb a mountain
That’s largely true. Both Nike and Adidas have marketing and advertising budgets worth billions of dollars, while Under Armour is still growing in that area. Last year, the brand suffered from slow growth and had a .7 percent decrease in net revenues because of struggling sales. Their stock values have also been up and down throughout 2017, despite the success of the Golden State Warriors.
Under Armour has Curry, but he needs help to keep the brand afloat. Tom Brady, Cam Newton, and Bryce Harper are all part of that but none of them have the same appeal NBA players do.
Under Armour has to find a way to climb that metaphorical mountain, and ponying up for flashy athletes at the top of their basketball roster is the best way to grow and make up that difference. With Smith, Under Armour is doing exactly that.