Why Under Armour Investors Should Root For The Warriors in The NBA Finals

By Markets Fool.com

This year's NBA Finals will be attracting attention for all the usual reasons, including a head-to-head duel between superstars Lebron James of the Cleveland Cavaliers and Stephen Curry of the Golden State Warriors. Below the surface though, there's also a notable business storyline in this year's Finals.

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The series marks the first time that a majorUnder Armour sponsor will be squeaking on the Finals hardwood court, as Curry -- the league's reigning MVP -- will be flying through the lane in his namesake Curry One shoes by Under Armour all series long.


Curry One basketball shoe. Source: Under Armour.

Rising to prominence on the back of its compression t-shirt and other form-fitting clothing, Under Armour now sees footwear as perhaps its biggest opportunity. And no segment of that category is tougher than basketball where rivalNikeowns nearly a whopping 97% share of the market. For an idea of what a piece of that pie would mean to Under Armour, Nike sold $340 million worth of Lebron James' signature shoe, last year, which represents more than 10% of Under Armour's total revenue. Nike's Jordan brand, by comparison, brings in $2.6 billion in annual sales.James' shoe was easily the best seller last year followed by Kevin Durant, also a Nike sponsor at $195 million. Stephen Curry's shoes did not hit stores until earlier this year so comparisons with last year are unavailable.

Why superstars are so important
As the success of the Jordan brand indicates, basketball players have more power to sell shoes than any other type of athlete. Curry is probably not Under Armour's best known athlete. That honor likely goes to New England Patriots Quarterback Tom Brady or even Masters winner Jordan Speith, but football cleats and golf spikes don't move the way basketball sneakers do.

Teenagers and the other basketball amateurs buying the sneakers want to identify with the player behind the shoe, which is why the player's popularity is so important, and it's why an icon like Michael Jordan, who has his own "Jumpman" logo, can continue selling shoes more than a decade into his retirement.

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Nike has made an art of sneaker branding, selling $80 million of one Jordan model in a week last December. The resale market for Jordans is also valuable due to the scarcity of the shoes, and fans and resellers can be seen waiting overnight outside of sporting goods stores. What a diamond ring is for some, basketball shoes are for others.

Fortunately for Under Armour, Curry, the Warriors' baby-faced point guard is one of the more likable players to hit the hardwood in recent years. His jersey was the No. 2 seller in the league (behind James), and he was the top vote-getter for this year's All-Star game. His Facebook page has over 2.5 million likes.

It's gotta be the shoes
With its aspirations in basketball, Under Armour is firmly setting its sites on Nike's castle. The brand synonymous with the Swoosh began life in the early 70's as a running shoe maker, but found its footing in the mid 80's with basketball and Michael Jordan. Basketball has helped lead the company to $30 billion in sales and huge brand recognition around the world.

Like other dominant brands, the popularity of Nike owes to a mix of marketing prowess, including the "Just do it" slogan, and technological innovation such as Air, the Fuel band, and Flyknit.

For Under Armour, toppling Nike is no easy feat, but Curry's appearance in the NBA Finals will likely help the company build inroads on Nike's footwear empire.

If the Warriors win
A Warriors victory would certainly help Curry and Under Armour's profile, but a win alone isn't enough. Curry needs to shine and outplay James. He needs to electrify the crowd the way Jordan did in the past and Kobe Bryant and James have done more recently.

As a shooter, Curry may not be the most natural of shoe salesman as slam dunks are more likely to move the merchandise than three-pointers, but the more he can do to elevate his status in the league and his fame with fans, the better chance his shoes have of breaking through.

At 27, Curry likely has several strong years ahead of him, and with his fame only building, it may take a few years, but Under Armour could have the superstar they've been waiting for.After two games, Curry's play hasn't been the best, and he was characteristically out of touch on Sunday, shooting just five of 23. Still, there is plenty of time for him to shine. A championship would not only take Curry to the next level, but could also shine more light on Under Armour, too.

The article Why Under Armour Investors Should Root For The Warriors in The NBA Finals originally appeared on Fool.com.

Jeremy Bowman owns shares of Apple and Nike. The Motley Fool recommends Apple, Facebook, Nike, and Under Armour. The Motley Fool owns shares of Apple, Facebook, Nike, and Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.