Jay-Z will lead Puma's return to the NBA

Senior Writer
Yahoo Finance

Puma has largely sat out the American basketball sneaker race for nearly two decades, focusing on other sports for logo exposure while Nike, Adidas, and Under Armour battled it out in the NBA.

Now, Puma is jumping back into the NBA with a giant splash: the company has signed three of the top NBA Draft prospects and announced Shawn “Jay-Z” Carter as its new creative director of Puma Basketball, as first reported by Complex.

There’s some relevant recent history with that job title at Puma: Rihanna became creative director of Puma Womens in 2014. NPD Group apparel analyst Matt Powell has told Yahoo Finance he believes Rihanna’s work with Puma is one of the few examples where a celebrity ambassador actually boosted a brand’s sales.

Jay-Z and Beyonce attend Game Six of the Eastern Conference Quarterfinals during the 2014 NBA Playoffs at the Barclays Center on May 2, 2014 in New York City. (Elsa/Getty Images)
Jay-Z and Beyonce attend Game Six of the Eastern Conference Quarterfinals during the 2014 NBA Playoffs at the Barclays Center on May 2, 2014 in New York City. (Elsa/Getty Images)

Puma has young stars, but stiff competition in NBA

Puma has added projected No. 1 draft pick Deandre Ayton of Arizona, Marvin Bagley III of Duke, and Zhaire Smith of Texas Tech to its roster of sponsored athletes, betting completely on tomorrow’s stars to pave the way for the brand in basketball.

Puma is still a distant No. 3 to Nike and Adidas Group among sports apparel brands globally. The Frankfurt-listed company had $4.1 billion euros in sales last year, an all-time record for the brand, and shares are up 38% in 2018 so far. But like Adidas (the other sports brand in Herzogenaurach, Germany, both founded by a Dassler brother), it is better-known across the world for soccer and running than for basketball, baseball, or American football.

The global face of Puma’s brand has been Usain Bolt for years, and it is arguably still Bolt even though he has retired from competitive track. The company is still using an image of Bolt on the cover of its annual financial reports. The vast majority of its other endorsement deals are with soccer players.

Usain Bolt on the cover of Puma’s 2017 annual report (Puma.com)
Usain Bolt on the cover of Puma’s 2017 annual report (Puma.com)

In American sports, Puma has a small handful of big names in the NFL, including New England Patriots receiver Julian Edelman and Houston Texans linebacker Jadeveon Clowney. Puma Motorsport is a sponsor of Team Penske in Nascar and Indycar. And in golf, Puma sponsors the young star Rickie Fowler, who dresses in head-to-toe, bright orange Puma gear on the course and has arguably done more to promote the brand than any other US athlete in the last few years.

The last time Puma signed an NBA player to a big contract was Vince Carter in 1998. And Nike enjoys more than 90% market share in basketball sneakers. Under Armour, in its NBA efforts, has seen only mixed success from its big investment in Steph Curry signature basketball shoes.

Ayton, Bagley, and Smith take Puma’s list of NBA stars from zero to three. The brand also signed NBA legend Walt “Clyde” Frazier to a lifetime contract this month, aiming to relaunch its retro line of Walt Frazier’s Clydes a la Adidas’ Stan Smiths, which have enjoyed a major resurgence.

Add up Frazier, Ayton, Bagley, and Smith, and the Puma NBA invasion is obvious. The last piece: adding cultural icon Jay-Z to the roster.

Jay-Z and Roc Nation Sports agency

According to Puma’s global director of brand marketing Adam Petrick, quoted in Complex, Puma approached Jay-Z about the role and, “it was something he wanted to be a part of.” (Jay-Z’s representatives did not return a request for comment.) 

Of course, Jay-Z has an impressive recent résumé in pro sports. He became a part owner of the Brooklyn Nets in 2004, then sold off his sliver of ownership (less than 1 percent) in 2013 in order to become a registered agent (agents cannot be team owners).

His agency, Roc Nation Sports, has grown its roster since 2013 to more than 50 pro athletes in multiple sports, including Kevin Durant, Jeremy Lin, and Skylar Diggins-Smith in basketball, Todd Gurley, Victor Cruz, Juju Smith-Schuster, and Ndamukong Suh in football, and Robinson Cano, CC Sabathia, and Yoenis Cespedes in baseball.

On news of Jay-Z’s new role at Puma, some onlookers are already wondering if there might be ethical issues with the head of an agency holding a dual role at an apparel brand eager to sign athlete clients. It’s a reasonable question. Puma exec Petrick tells Complex Jay-Z, “will not be involved in selecting players for Puma’s basketball division,” but he also said Jay-Z’s agency was a key factor in Puma bringing on Jay-Z: “We’ve been working with Roc Nation for quite some time. They’ve been great partners to us for several years.”

Despite what Puma says, it’s hard not to foresee Jay-Z steering Roc Nation clients to Puma, which would help the brand gain a foothold quickly. There are two examples already: Puma signed WNBA star Skylar Diggins-Smith, a Roc Nation client, last year; and Roc Nation signed NBA prospect Zhaire Smith in April, before Smith signed with Puma.

Daniel Roberts is the sports business writer at Yahoo Finance. He hosts the podcast Sportsbook and the video series Business + Coffee. Follow him on Twitter at @readDanwrite.

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