The shoe fits Dwyane Wade
In 1984, Converse officials were so content with Magic Johnson and Larry Bird as endorsers, they let Nike pay a rookie named Michael Jordan an outrageous $500,000 per year to sign with them.
Preoccupied with the bidding for what shoe company officials believed were by far the most marketable players, the best offers made to the fifth pick, Dwyane Wade, topped out at $400,000 or about 3 percent of what James would make per year from Nike.
Dwyane Wade is hot on the collector's market. Last week, game-worn shoes supposedly autographed by the star went for $1,800 on eBay, a 2003 Upper Deck Exquisite Patch card sold for $10,000, while autographed rookie cards soared above the $600 mark. Wade has a memorabilia deal with Hollywood Collectibles, which sell the following Wade-autographed items:
Wade and Shaq framed auto photo: $699
"LeBron was a property before coming into the Nike deal because of the exposure he got in high school," said Ric Wilson, sports marketing director for Converse, which won Wade's services. "Dwyane simply flew under the radar."
And that's despite the fact that, just months before, Wade led his Marquette team to the Final Four.
Like Johnson and Bird, James and Anthony don't appear to be fool's gold. But given the buy-in price and the Miami Heat guard's performance, the 23-year-old has a chance to be the best value for a shoe brand since Air Jordan.
"No one in the shoe business thought that he would become what he has become," Henry Thomas, Wade's agent, said later.
In his sophomore season, Wade averaged 24 points per game, three shy of James' average and three more than Anthony's average. Meanwhile, Wade's team still is in the playoffs, while James' Cavaliers didn't make it to the postseason and Anthony's Nuggets were bounced out by the San Antonio Spurs in the first round.
Throughout the season, a handful of small endorsements have come Wade's way, including an exclusive memorabilia deal with Hollywood Collectibles, a clothing deal with P. Diddy's Sean John line, a local Range Rover sponsorship and a contract with EA Sports to be the cover athlete on its upcoming video game, "NBA Live '06."
But Wade's most challenging pitch job likely will be Converse.
The brand that is famous for its Chuck Taylor canvas shoes hit rock bottom in January 2001, when it filed for bankruptcy after a series of corporate takeovers by holding companies failed. So too did endorsements by notable bad boys Dennis Rodman, Latrell Sprewell and Bob Knight.
But Nike saw value in the name and purchased Converse for a reported $305 million in July 2003. Although the brand had become primarily just a fashion icon once canvas shoes weren't worn on the hardwood anymore, Nike officials made it known they wanted Converse to build serious basketball shoes. Success was dependent on having a prominent signature athlete, something that Converse hadn't had since Charlotte Hornets forward Larry Johnson starred as "Grandmama" in the mid-'90s.
Having signed a group of underrated rookies before the acquisition, including Wade, Toronto Raptors forward Chris Bosh and Chicago Bulls guard Kirk Hinrich, Converse has a chance to get a healthy return on its investment. Right now, though, the company is moving as fast as it can to capitalize on the success of Wade, who recently was among People's 50 Most Beautiful People list.
After acquiring the brand, Nike was faced with the decision of whether to sell Converse at mass retailers or in shoe specialty stores. Nike's Starter brand shoes and Nike-owned Shaquille O'Neal's Dunkman brand sell at value stores like Wal-Mart for under $40 a pair. Thanks to the low price along with the popular spokesman, 6 million Shaquille O'Neal pairs of shoes were made last year more than any other basketball shoe.
But Converse officials are not shying away from relying on Wade, and are hoping to get into the shoe retailers instead of big, inexpensive superstores. The suggested retail price for Wade's signature basketball shoe will be $90. Converse already makes a Wade lifestyle shoe called the Wade County, which sells for $65. And even though Wade's signature basketball shoe will be out in the fall, commercials touting the quick guard as "The Flash" debuted this week.
"Like running is to Nike, basketball is to Converse," Dave Maddocks, Converse's vice president of global brand marketing, said. "The awareness of the Converse brand is much larger than the Converse business, and it's our job to grow that business."
"The risk to developing a broader line for Converse includes potentially cannibalizing existing market share for Nike," said David Turner, senior vice president of BB&T Capital Markets, a firm that does investment banking work for shoe retailer Finish Line.
But some analysts say making Converse a premium basketball shoe is a risk, given that shoe retailers aren't likely to take less of the standard Nike product to make room for its sister brand on the shelf.
Others say that as long as Converse has Wade signed to what now seems like a bargain price, they should take advantage of it.
According to Neil Schwartz of market retail tracking firm SportsScanINFO, only jerseys with "O'Neal" on the back sold more than "Wade" last week. And Schwartz says many of those people won't shy away from shelling out a couple extra dollars to have Wade's shoes on as well.
Darren Rovell, who covers sports business for ESPN.com, can be reached at Darren.email@example.com