Linpossible is Nothing: Adidas is also cashing in on Linsanity

It is hard to ignore the buzz surrounding the phenomenal rise of Jeremy Lin; his impressive performance for the Knicks has fueled so much media attention that hardly anyone hasn’t heard of him. Lin is an Asian American playing a sport dominated mostly by African Americans. He was also undrafted coming out of Harvard University, and was leter let go by two NBA teams: the Houston Rockets and the Golden State Warriors. Kobe Bryant had no idea he existed. These factors are what make his underdog tale so inspiration, and has ignited Linsanity not only in the United States, but overseas in Asia as well.

The Jeremy Lin effect

Besides the emergence of some “lintertaining” puns and giving sports journalists something new to write about, Lin’s continual success on the courts has resulted in monetary success for others off the courts in addition:

• From being the 28th most-selling event at Ticket Liquidator, Knicks tickets jumped to number one in the two week period since Linsanity started. Average prices of Knicks tickets rose from $130.53 on February 3rd to $211 on February 19th (that is a whopping 62% increase).
• The stock of Knicks parent Madison Square Garden (MSG) has risen a cool 13% since the beginning of February. Furthermore, according to MSG, viewership for Knicks games on its network has also increased 70%, which they expect to drive up their advertising revenue.
• Demand for Lin apparel has been off the hook according to sporting apparel company Modell’s Sporting Goods, and they are scrambling to keep up. Lin’s jersey is also the number one sell for the NBA’s online store since his February 4th breakout game.

Adidas

Lin’s identity as a Taiwanese-American and his great accomplishments have those in Taiwan and China rooting for him, as people find him relatable and inspirational. The WSJ article I came upon today talks about Adidas’s plan to profit from the high demand for Jeremy Lin apparel in Asia, as Lin’s increasing fan base want to openly show its support. In the next couple of weeks, the German sporting apparel company plans to roll out Lin’s jersey to its 6700 stores in China. Adidas anticipates on profiting greatly on Lin’s superstar status, given its licensing agreement with the NBA in China. However, the company’s plan to maximize their earnings through Lin’s fame is complicated by the basketball star’s current contract with Nike, as well as the competition from Chinese sporting apparel companies also mass producing Lin apparel.

In the short term, selling Lin jerseys in its Chinese stores translates into a quick and easy profit for Adidas. The article does not draw conclusions about whether Adidas’s long term strategy includes Lin or not. However, if Adidas were to sign Lin after his contract with Nike ends, it would no doubt be an incredible key resource for the company. If Lin continues to perform as well as he currently is, his star power will sure pass that of Yao Ming’s in China. And utilizing Lin’s stature and success story would be a great marketing strategy for the company, as they battle it out for market share with Nike in China. Both companies have recognized the increasing purchasing power of brand conscious Chinese consumers. Whether Lin chooses to stay with Nike or sign with Adidas plays a big role in determining each company’s success in China.

Like many other Asian Americans, I am rooting for Lin’s continual success and will be following his story closely. Being that he is already being compared to Michael Jordan and Kobe Bryant, I think that Jeremy Lin’s career is very promising to say the least. How do you guys feel about Lin’s recent rise, and what business implications of his success do you see for the Knicks and sporting apparel companies like Nike and Adidas?