Where does Jordan Brand success leave Nike in basketball?

Ad Age did a brief case study on the Jordan Brand last week, revealing that it has eclipsed the sneaker sales of Reebok and addidas. That surprised me for a minute, but not when you look deeper at the roster of athletes it has assembled. Dwayne Wade, Carmelo Anthony, and Chris Paul are arguably the next three most marketable players behind Lebron and Kobe, so add all of their sneaker sales with the line of Air Jordan’s and you can see why the sales numbers are where they are.

My question is what does Nike plan to do moving forward. Jordan Brand has limited distribution, premium pricing and positions itself as the Mercedes (or fill in the luxury brand) of the industry. One look at their website indicates what the brand strives to be – the lineup of athletes dressed in fine suits lounging in a room no sign of sneakers, basketballs, or uniforms. Jordan Brand also poached Derek Jeter and CC Sabathia, a few prominent football players, and boxer Roy Jones. Again, all top of the line public figures in their respective sports.

Will Nike take Jordan Brand to other sports and continue to carry it as the premium play it is now, or will extend vertically in basketball, expand distribution, and offer products at various price points? From there, what is the end game for brand Nike? If they allow Jordan Brand to expand within basketball, which I don’t feel is the strategy, does Nike shift its focus away from basketball all together. If it horizontally expands Jordan over to baseball, football, and beyond as the premium brand, does it start to target lower price points or will it compete directly with Jordan risking some cannibalization to house maximum market share under the same Beaverton, Oregon roof?

I don’t have any answers, but it’s a testament to the power of MJ on how fast this entity grew and the lineup of stars it immediately attracted. At a time when Under Armour is trying to enter the sneaker business, Nike continues to get stronger, and with Jordan Brand now successful on its own, brand Nike can shift its efforts to other sports and other products to cut into the strengths of Under Armour, Reebok, and addidas.

Nets Ticket Deal: Inappropriate or Innovative?

The Nets set off a buzz around NBA and sports marketing circles last week when they released the Match-Up ticket plan – 10 games against the NBA’s biggest attractions and 5 reversible jerseys with Nets player on one side and opposing superstar on the other side. Traditionalists didn’t know where to start, with promoting opposing teams players or attaching all the big games to the same ticket plan instead of forcing fans to buy the unsellable games in order to see Lebron. Brett Yormark broke basic ticket sales and marketing rules NBA teams have followed for years in one announcement.

Nobody has ever accused the Nets or their CEO for lack of creativity and innovation, but that only proves even the best salesmen can’t fill the arena with a bad team and a bad arena. That said, this deal makes sense for the team. Before addressing the potential negatives, some positives. Immediate awareness of the ticket plan with a splashy, unique offering, so everyone knows it exists. It’s generated interest. Though not scientific and not a large sample, I’ve heard numerous people say, “Wow, I’m thinking about buying that.” For how many ticket plans, and ticket price cuts scroll through, rarely does it actually elicit excitement – this one has.

On the flip side, the Nets are promoting other team’s players, not the best way of marketing your own team. Before digging in, keep two important points in mind that have proven themselves over time: 1) team success drives sustainable attendance, not ticket deals; 2) marketing’s top fear is cutting prices (applies to any business). New Jersey is coming off two straight seasons out of the playoffs, traded away its marquee superstar in Vince Carter (though arguably Devin Harris is a better player now), and have all but deserted its current fans by threatening to move to Brooklyn. Oh yeah, they play across the river from Madison Square Garden in the worst arena in the NBA. Like showing up for a gun duel with two fists, they have no chance to succeed under these circumstances.

Given these circumstances, why not market some of the teams the Nets are playing to get fans out to the arena. I have always felt small market teams struggling for attendance should leverage opposing teams and opposing stars more than they do. Face reality, a giveaway for the 5 Nets uniforms would not generate any excitement (nor would that same giveaway in most arenas). Add in Kobe, Lebron, KG, Dwight, and Wade, and you have added value for your fans, you increased their willingness to pay with the promotion. [I argue teams should consider marketing alliances to push travel packages in opponent cities, i.e. Nets market to Cleveland fans, or Boston fans, to capture revenue from fans with peak interest when a team’s own fan base can’t fill the arena – another subject for another day.]

Without running an analysis on sales numbers it’s hard to draw conclusions about the bundling all quality games together in one package vs. leveraging each game to upsell less attractive games. At a high-level, fans are now trained to expect the Cavs game packaged with Sacramento, Indiana, and Memphis. They don’t get excited about that, its still a tough decision to buy that package. The Nets took away any question – every game in this deal has an attraction, so fans feel like they are actually getting a deal, and are not left to judge if buying 4 games I don’t care about is worth the ticket to see Kobe play. This approach should boost sales for this package above what teams typically see for ticket deals.

Further, the Nets didn’t slash prices and they bundled 10 games together, so they are selling quarter-season ticket packages at or near full price. From that perspective, it’s a quick way to boost your full-season equivalents. Arguably, a bigger revenue bump than would have been received by separating these games and pairing them with less attractive opponents that drive fans away.

Time will tell if the plan succeeds, as measure by attendance numbers and revenue generated. Teams need to accept reality, as the Nets have, that fans want to see Kobe and Lebron and want to buy their jersey’s not necessarily those of the home team. And some fans only want to see the NBA stars, not a watered down package of lottery teams. Rather than continue to ignore these facts, teams need to find ways to capitalize on it, earn brand favorability for your team, maintain a sustainable business, and be ready to maximize profits when your team is one of those on the short list of NBA elite. For all those who criticize the Nets, I’ll place my bets on their average ticket price and overall attendance for those 10 games.