Business is a tricky proposition and anyone who’s into it will tell you a million stories about how it’s literally a game of inches. One such storyteller is Sonny Vaccaro, former sports marketing executive for Nike and Adidas.
Vaccaro, now 77 years old, recalled how Adidas low-balled LeBron James– then an 18-year-old rookie– which ultimately prompted the St. Vincent- St. Mary’s superstar to sign with Nike. Guesting in Chris Vernon’s NBA Ringer show (and transcribed at The Ringer), Vaccaro explained how he convinced Adidas to give an unprecedented 10-year, 10-million dollar contract which was ultimately held off by the company.
Vaccaro: You have to understand, Kobe got $1.5 million with other things in [his] contract. Tracy got close to maybe $1.82 million. So the numbers were moving up, but nobody was paying … anybody that kind of money. And Adidas was rolling. Well, we were, I convinced the owners. I wanted Adidas to give him $100 million, $10 million a year, guaranteed. $100 million is what it would have come to. And that number was off the wall. No one [had] ever gotten close to that [at the time].
We were going to bet our whole future on this kid, LeBron. There was no question that he wasn’t going to be courted by other people because obviously he was going to be, but no one believed in him, not $100 million worth. That I do know.
Imagine in Malibu, overlooking the Pacific Ocean, and we lay out the plan. And the number [was] supposed to be $100 million. I sat down that day [with] Gloria James, [LeBron’s] lawyer, and … LeBron, and all these people. I saw the contract. It wasn’t $100 million. It was like $70 million, and they had incentives on it.
It wasn’t so much the number, $70 million or $100 million, because $70 million was a hell of a lot of money, right? But you have to understand what it was to me. The reason I was, and I still am respected, I believe, in that world, is [that] if I said something to you, you [would] believe me. If we had a deal, we had a deal. [Adidas] changed the number on me. I’ll never forget that as long as I live.
Long story short, Nike swooped in and shackled LeBron for 10 years worth 90 million dollars. His damaged reputation aside, Vaccaro called Adidas’ blunder ‘the biggest mistake in the history of corporate America.’
I said then, I’ll say until I die, the biggest mistake ever made in corporate America on this sort of a thing, was when Adidas backed out of signing LeBron James. [If] they sign LeBron James, the world changes.
Vaccaro admitted there’s a possibility of Nike going over that $100M offer but the fact that LeBron often wore Adidas during his high school playing days said a lot about their chances.
Oh well, that’s how business is; you win some and you lose some. In the case of Adidas, though, they lost by a whopping billion dollars.