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Nike Is Scoring Big With March Madness -- but for How Long?

By Aimee Duffy – Mar 18, 2014 at 6:15PM

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Market share is a precious thing. Here's a look at which brands have the biggest presence in the 2014 NCAA basketball tournament.

There is an awful lot to like about March Madness. Whether or not you actually enjoy men's college basketball is besides the point for some people -- instead, it's the lose-and-go-home, Cinderella-story nature of this tournament that captivates so many people. The feel-good aspect of the NCAA tournament -- the straight-up emotional connection viewers have with the games -- is not lost on equipment and apparel manufacturers. This is where brand shines, and every year, this is the biggest sports stage outside of the Super Bowl. 

Given that brand is so closely connected to emotion, sponsoring an underdog or the eventual champion can offer premium exposure and a unique opportunity to boost sales, doing a world of good for companies like Nike (NKE -1.78%)Under Armour (UAA 0.85%), and Adidas (ADDYY 0.30%). With that in mind, today we'll take a look at how the apparel sponsorships break down for this year's NCAA men's basketball tournament.

While we typically think of the sports apparel world as a three-way tangle between Nike, Under Armor, and Adidas, the NCAA men's tournament is a pretty lopsided battle. According to Sports Business Daily, Nike and its Jordan brand sponsor 44 out of the 68 teams that made it to the postseason. Russell Athletic does the jerseys for four teams, but Nike does the sneakers for those four teams, bringing its total of full or partial representation to 48 teams. Still, its share of the field continues to shrink, down from 52 teams last year and 55 teams the year before that. Adidas clothes and shoes 19 teams, while Under Armour has just one. There will always be some fluctuation year to year; for example, last year Under Armour represented three teams. But this trend does not bode well for Nike.

What matters now, obviously, is which teams win. Nike sponsors all of the top seeds and all of the No. 3 seeds, while Adidas claims three of the No. 2 seeds and half of the No. 4 seeds. Adidas' sponsorships include Louisville, the reigning champion and a team that many analysts think could win it all again this year.

That said, there is arguably just as much upside -- maybe more -- in sponsoring an underdog as there is for a perennial powerhouse. If Stephen F. Austin makes it to the Elite 8 round, it will provide tremendous exposure for Under Armour, and perhaps no one will notice that there is literally not one other team wearing its uniforms this year. Similarly, if Weber State becomes the first No. 16 seed to knock off a No. 1 in the history of the tournament, Adidas will have something to write home about.

Bottom line
The NCAA tournament is an interesting microcosm of the sports apparel world in general: Nike trying to hang on to its impressive market share while Adidas grabs for more with one hand and fends off upstart Under Armour with the other. The former already lost a major account to the latter when Under Armour stole away Adidas' Notre Dame sponsorship. There are no guarantees, and no percentage of market share is ever safe. Remember, there was a time -- 2008 and 2009 -- when Reebok might have been in this conversation, but those days are long gone. Enjoy the tournament.

Aimee Duffy has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Nike and Under Armour. 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.

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