words // Nick DePaula:
“John won’t be accepting the offer.”
Just at the close of yet another business week earlier this fall, on Friday, October 2nd to be exact, those words shocked the halls of the adidas Village in Portland, Oregon.
All summer and into the start of the season, adidas, the Washington Wizards’ All-Star point guard and his representatives at Relativity Sports had been hammering through details – an agreed-upon base number, mostly – and progressing towards a new shoe deal extension that would link John Wall and his emerging signature adidas footwear business deep into his career, for many years to come.
After very nearly agreeing to the framework of a new deal in early July, just as John was unveiling his second JWall signature model and knocking out a cover shoot for SLAM’s KICKS Magazine, the negotiations soon came to a standoff.
By mid-September, the deal was “falling apart,” according to an industry source.
How did things get to that point?
To start, we must first go back to the summer of 2010, when John Wall was drafted 1st overall to a struggling Washington Wizards franchise that he would soon revitalize, and when he also signed a reported 5-year, $25 Million shoe deal with (an equally struggling) Reebok.
The hope was that he would similarly revitalize the fledging Reebok Basketball category as well, but a lackluster Zig-based shoe series, all during a time when John was simply learning how to run a franchise as a 19 and 20 year-old, never quite translated into success for the brand.
According to several industry sources, the Reebok deal actually paid Wall an initial base salary of $2.5 Million, with the rest of the money to be made in on-court performance incentives and signature sales royalties. He was basically robbed of a Rookie of the Year bonus on a technicality, as 2009’s top overall pick Blake Griffin was awarded ROY, after being hurt in the final preseason game of his true rookie season a year prior.
Wall would go on to earn All-Star nods and playoff appearance incentives, but clearly fell short of the sales targets that could’ve earned him up to the $5 Million per year figure.
By the middle of his third NBA season, Wall was returning from a leg injury and on his way to sorting through the pace of the pro game, eventually evolving into the franchise point guard we’d all expected him to become.
The Washington Post, reporting on his upcoming sneaker free agency, characterized the Reebok to adidas transfer by saying that “the partnership was terminated in the third year when injuries hampered his early career. He then joined Adidas, which owns Reebok, for the remainder of the contract.”
That isn’t an entirely fair framing of the move, as adidas, Reebok’s parent company, was looking for ways in which to strengthen its basketball roster in the wake of Derrick Rose’s season-ending string of injuries. Reebok was also divesting away from hoops and the accompanying required design resources, while aggressively attacking the training and fitness category instead with its new CrossFit partnership.
The Three Stripes simply absorbed the existing terms of Wall’s initial Reebok endorsement deal, and on January 9th, 2013, announced that they’d added him to their growing roster of NBA endorsers. The following year, his debut adidas signature model, the JWall 1, launched to a modest reception, and it was just a year later that his 5-year rookie shoe deal was set to expire.
As both sides made progress towards a new extension this summer, the discussed number was hovering around a guaranteed base of $5 Million per year – a noted jump from his prior deal, and landing Wall in the same tier as fellow signature athletes Kyrie Irving and Damian Lillard.
Make no mistake about it, the relentlessly splashy $200 Million headlines surrounding James Harden’s sneaker free agency and eventual 13-year adidas deal most certainly became a factor in Wall’s negotiations as the summer progressed.
After appearing to be headed towards agreeing to terms with adidas, the Harden numbers clouded where Wall’s representatives felt his true market value should land.
“They wanted Harden money,” another source simply said.
John’s agents pushed hard towards the $10 Million mark, to no avail. Much like the NBA’s restricted free agency window, there was a “match clause” on Wall’s shoe deal, meaning his agents at Relativity Sports had the summer of 2015 to take pitches from other brands, and adidas could fully match any new offer Wall agreed to.
The problem was that John Wall simply had no other brands making a concrete offer. No other brand was offering the coveted trio of pure cash, marketing push and a signature line. The offers just weren’t there.
Nonetheless, adidas still stepped up to make what was considered a sizable direct offer of their own, eventually meeting halfway between their $5 Million starting offer and Wall’s $10 Million asking price, according to multiple sources.
Wall simply declined the extension offer.
Where does all of that leave John and adidas?
By not accepting adidas’ offer by that October 2nd deadline, just as several colorways of the JWall 2 were headed to retail stores, the two sides agreed for Wall to play out the season wearing the shoe on-court in games. He’s mostly worn the all red edition, making for a blur of color and little branding visibility for adidas.
Meanwhile, Wall and his agents can continue to hear offers from other brands during the season, with adidas retaining their right to match.
Adidas hasn’t promoted Wall on social media during that time, while the previously-paid-for banner ads and in-store displays at partners like Foot Locker serve as the only public association between the two.
Wall will be an unrestricted sneaker free agent this summer, after the season concludes. The adidas “match clause” will have expired, and Wall will be free to sign with any brand of his liking.
Unsurprisingly, Wall has been spotted literally never in adidas off-court this fall, even wearing Retro Jordans from time to time, and practicing in Kobe Xs. Tonight, for the first time, he wore the Nike Kobe X on court in a game, apparently citing “footwear issues” with his JWall 2 signature shoe.
“My main focus is just play basketball,” Wall said when asked by the Washington Post after shoot-around earlier this month. “I let my agents and marketing team and them negotiate and talk.”
While he’s an All-Star point guard in a major market, with an explosive and exciting game, his signature shoe track record of poor sales and his lackluster social media presence unfortunately makes it all but impossible for Wall to command a new deal in the $10 Million range that he was hoping for. His window for leverage towards “Harden money” was last summer, as it’s the restricted match clause that can spike the dollars so high.
Nike surely has no incentive to offer near eight figures, and is also fully invested in point guard Kyrie Irving’s signature line, making a Nike Wall signature shoe a long, longshot.
“I don’t even know what the back up option is,” says one source.
Wall could field a huge offer from a China-based brand. His agent Dan Fegan just negotiated a new deal for Dwight Howard with Peak, after Howard wore adidas for the entirety of his career to this point.
Of course, going that route entirely shifts a player’s marketing presence away from the US, as China brands haven’t looked to consistently promote their athletes stateside, where they have little national retail presence. For China’s top trio of brands – Anta, Peak and Li-Ning – more than 99% of their business comes from the Chinese market.
It’s also uncertain if either Jordan Brand or Under Armour would have serious interest in Wall, for a reduced price that would unlikely include a signature shoe, as they’re currently committed to major stars in Russell Westbrook and Stephen Curry.
As it stands, Wall and adidas are simply at a standstill, and expected to play out the remainder of the season before eventually parting ways this summer.