Gear

Lacrosse Industry Rumblings: Nike Buying Under Armour?

Nike Lacrosse Syracuse
Nike is already well established in lax... and everywhere.

It’s been reported that Nike is contemplating the purchase of Under Armour, and the lacrosse world is definitely buzzing about this prospect.  Some see it as a good move, others not so much.  Some think it will never happen, while others are hopeful that it will come to fruition.  This is obviously bigger than just lacrosse, but what would this move mean for the lax world?  And could it actually happen?

I’ll start with the latter question first.  Yes, it could actually happen.  Nike, along with the rest of us, has seen Under Armour make big strides in apparel, and now footwear.  Under Armour is big, but Nike is bigger, and they definitely have the money and power to buy UA.  If they did, it would most likely be like GM buying Cadillac or Buick, or Warrior buying Brine, at least in the sense that they would keep the “competitive brand” alive.  Under Armour has pull with consumers, and Nike probably wants that pull.  Because a more diverse pull is good, right?

Another reason that I could see Nike purchasing Under Armour is UA’s recent push into more sports, equipment manufacturing, and wild uniforms.  Nike got into lacrosse in a major way right before UA did with an apparel push and new equipment.  Nike has also taken Oregon Football to new levels with their crazy uniforms.  And now UA is doing all of that as well.  So the new question seems to be, do you invest in, and try to control, something new and popular that does what you do?

Nike Lacrosse Syracuse

Nike is already well established in lax... and everywhere.

Because of this popularity, Nike may be forced to pay a premium for Under Armour, but the investment could definitely prove worthwhile, especially if UA continues to be as popular with new consumers as it has been in recent years.  Basically, Nike has to be thinking that Under Armour is gunning for them, and using very similar marketing and design approaches, so buying them now could eliminate a future threat to their sporting goods dominance.  And buying now is better than paying through the nose later.  So to a certain extent, the move makes a lot of sense.

On the other hand, the move might not happen for a number of different reasons.

To look at it simply, Nike is a HUGE entity, and they probably aren’t all that worried about Under Armour.  The purchase would be an investment.  And like any investment, Nike will have to look at what else they could do with the money.  Could they reinvest the investment in themselves and make their company that much better, and valuable?  If so, the UA deal probably won’t go down.  Nike could easily choose to not go through with it.

Maybe Under Armour just isn’t going to sell.  Jay Hancock, of the Baltimore Sun, seems to believe that the deal won’t happen.  He says the the Plank brothers own 29% of the company and that is enough to prevent a sale.  Basically, he says it all rests on them.  And they know what they’ve got, and simply won’t want to give it up.  He also mentions that they are doubling the size of their headquarters, and that a move like that doesn’t sound like people who are interested in selling.  But Maverik was in the middle of moving their offices to better space when the Bauer deal was announced, so I’m not putting as much stake in the latter fact as Mr. Hancock is doing.

Since Kevin Plank (the founder) owns 24% of the company, he has the most to gain with a sale, but he also has the most to lose.  He could reap a serious windfall with a sale, but by holding on to the company, and expanding and improving, he might be in a for an even bigger windfall down the road.  If he is motivated by money only, I can’t see the sale going though, but only because there is so much MORE money at play further along.

Hancock also makes the point that Nike is enemy number 1 for Under Armour, so why would they ever sell to them?  The answer to that is actually simple: money.  If you’re down to sell out, you’ll do so with anyone, as long as the price is right.

One of the commenters on the Bmore Sun quickie post points out that entrepeneurs grow tired of day to day operational management and while this is genrally true, I’m not so sure it applies here.  UA is the first major successful business the Planks have started, and being that it’s related directly to Athletics, and Maryland (Kevin Plank’s alma mater), I could see them wanting to maintain ownership. If Nike really is their model and target, wouldn’t they want to emulate Doug Knight?  If that is the case, the likelihood of them selling would most likely diminish.

Nike could try to buy up a big chunk of Under Armour through non-Plank channels, but financially, this could be hard.  Merely on the news that Nike was considering the move, UA stock jumped up a couple of bucks.  If they started to actually buy UA stock at a rapid rate, I can only imagine what would happen to the overall acquisition price.  And this seems to be too risky a path for a behemoth like Nike to take.  Then again, if they see UA as a truly invaluable arm of their future plans, they might be more than willing to buy them, no matter the price.

So that’s really the question you have to ask yourself… how valuable is Under Armour, and their possible future market share, to Nike?

What do you guys think?  Is this going to happen or not?  If it does (or doesn’t), was it a smart move?  And by who?  SO MANY QUESTIONS STILL.  I know, I know…

#JoinLAS

About the author

Connor Wilson

Connor is the Publisher of LacrosseAllStars.com. He lives in Brooklyn with his better half, continues to play and coach both box and field lacrosse in NYC as much as possible, and covers the great game that is lacrosse full-time. He spends his spare time stringing sticks and watching Futurama.

12 Comments

  • I think that IF and WHEN this happens, it will be a great thing for lacrosse.  I think this would put a real challenge to the MLL/Warrior/Brine relationship if not the MLL in a whole.  What will happen if Nike decides to start of league of their own, but not give itself brand exclusivity?  They can afford to keep it open to other brands, which would create a more marketable athlete and team, when they can  somewhat create their own endorsement deals. 

    Nike/UA would probably get most of the shoe deals, because when it comes to kicks… NIKE has that market on lock. 

    And isnt Rabil still a UnderArmour guy?!?!  If so, where would his marketing allegiances lie because we all know that Nike could easily buyout anything Warrior had on the table. 

    Nike has done relatively well, in “sharing” some of its top athletes… so this might create a Nike/UA/STX type of relationship that could work with an athlete like Kyle Harrison.  K18 sportin’ Huaraches, UA shorts/shirts, and STX and Nike LAX gear?  I could see it.

    What this would also do is create a NEW type of marketing campaign for NIKE/UA.  Nike is the staple in the world of athletic gear and apparel, Under Armour has taken control of “younger” market of athletes…  Warrior/Brine better watch out!  And just for fun I think Nike should purchase Maverik as well, but still leave it as it’s own separate brand… Just a thought.

    -Chewy

  • Whether or not that happens I do not believe that Nike will ever have the REAL Lacrosse products like Warrior, Brine, Maverick, Gait and even Stx. While Nike kills in products like clothing helmets pads and sticks are just something they don’t have. Warrior and Brine are without a doubt the leaders of Lacrosse and I hope that never changes because they make fantastic products.

    • If Nike wanted to, they could just “redesign” the current product offered by the current manufacturers and source out the same companies to co-produce the equipment.

      And to echo what Emmett said, STX has been helping Nike to put out some legit lacrosse gear.

    • I must say… I have an Elite 10 head, Nike SC sprint shaft, Nike Vapor Elite gloves… and all are good products.  While what @twitter-105419701:disqus  says is true, in that a lot of the their stuff is very similar to STX gear, the two are actually pretty separate.  I think Nike actually has a very bright future with lacrosse if they stick with it full bore.

    • I really doubt they would buy them and shut them down.  Adidas owns Reebok, they didn’t shut them down.  Warrior owns Brine. New Balance owns Warrior. Bauer owns Maverik.  it goes on and on.  You buy a company to invest in them, if you want to shut them down, you do other stuff.

  • To answer that last question, Nike probably wants the Under Armour brand for it’s base products- compression shorts, turtlenecks, heat gear and skull caps. UA basically mainstreamed the products that are becoming more often seen on boring people doing normal stuff like jogging, skiing, hunting, or serving in the military than on a high school sports field. My friends and I seem to rarely purchase these products from Nike or cheaper imitators, preferring Under Armour. I see the buyout as a synergy move and I don’t see UA footwear or lacrosse gear surviving. This is just a guess and I could be completely wrong!

    They’re probably under a lot of pressure not to sell. I feel like people in Baltimore are so proud that UA is a baltimore company. 

Leave a Comment

Yes No