The Big Investment of Stephen Curry
In 2011/12, Stephen Curry had a repetitive ankle injury that made him miss most of the season. During the summer, he had two ankle surgeries while he was trying to turn his career around, and like many other big talents that ended their career with cruel injuries, the Warriors fans did not expect to see the skinny guy in the following season. The Warriors took a bet, a huge bet. In October 2012, the team from Oakland offered Curry to extend his contract for four years in return to $44 million. That was way below the original contract of $80 million for five years which Curry was entitled to get, however, in the new circumstances, analysts concluded that the new contract is actually better for Curry than to the Warriors.
As part of the Warriors investment, Curry was sent into a special treatment to rehabilitate his ankle and knees. The treatment included a mapping of 5000 points in his body and a special Yoga position that strengthen Curry’s core muscles. Since this injury, Curry, which his game is based on quick and extreme moves, proved that the Warriors one million treatment investment was a smart play.
Golden State’s GM, Bob Mayers, commented after Curry’s sign up: “Time will tell, but we felt like obviously, we put $44 million dollars on the table (to show) that we believe in him. It’s a big belief in his health; you can bet against it or you can bet on it, and we decided to bet on it.”
That was a good bet by Myers. In the next five seasons, Curry has become the face of the league with a phenomenal 2014-15 season including an MVP award and one special ring that brought back the Golden State Warriors their first championship since 1975. The following season, Curry was the first player to be elected MVP by a unanimous vote and lead the league in scoring. The Golden State ended the playoffs as a runner-up to the Cleveland Cavaliers, losing the finals, but it does not change the fabulous team that built up from this moment, that special bet in October 2012. With Curry as the heart of the team, the Warriors won the championship again in 2016/17 and set themselves in a good position to win the title back to back for the first time.
Curry was ranked 83 in the NBA top earners players. He was also ranked fourth in his own team. That changed in the last summer when the Warriors upgraded his contract to more than $34 million a year. Hence – Stephan Curry was the best investment in the NBA history!
Under Armour Investment and Curry’s Share
The Warriors were not alone to bet on Curry. Under Armour, an American sports clothing and accessories company, jumped on this catch after Nike passed on to upgrade Curry’s contract. It was simple, Nike offered Curry 2.5 million for a yearly contract, Under Armour offered 4 million and won.
The deal lifted Under Armour business to a level of doubling its value. So, after the Warriors championship, the company upgraded Curry’s contract, provided him with company shares and extended their partnership until 2024. Last year, The Business Insider claimed that Curry could be worth $14 billion to Under Armour. Kevin Plank, Under Armour’s CEO, said that he wants to build a $1 billion basketball brand around Curry.
For the past five years, Steph Curry’s shoe line was Under Armour salvation. Shoe sales were skyrocketing and the stock price reached its record in 2014 ($120.16) with the increasing popularity of Curry. Since then the stock fell drastically, partly due to the latest unsuccessful Curry 3 shoe line that influenced the company revenues. It is clear that Curry’s popularity is flourishing as he has the number one selling jersey among NBA players. Perhaps… Under Armour is now Stephen Curry, an injured company with a lot of potentials.
The Golden State Warriors and Under Armour did not invent a new type of investment. Warren Buffett, actually, made a fortune based on the same notion. There are two types of investments: the first one is to invest in a company along with its peak, Google, Apple, and Facebook are all holding on at their peak and no one can tell when it might end. The second investment is Stephan Curry, take a hurt, damaged product with plenty of potentials, put your money on it and go to bed for a few years. Ask Bob Myers, he has done it.