The value of sports sponsorship to Stephen Curry (sponsee) and Under Armour (sponsor)

1 Introduction

Sports sponsorship has been increasing popular as marketing strategies in the international world. Different from traditional marketing, sports sponsorship brings benefits to both sponsor and sponsee (Shank and Lyberger, 2014). In the sports sponsorship marketing, the case of Stephen Curry (sponsee) and Under Armour (sponsor) is a very successful one. Since the corporation between each other in 2013, Under Armour has quickly entered the market and beat the top competitors. It became the second largest sports brand, following the leader brand, Nike.

Stephen Curry is the current NBA hot star. He also promoted the brand value of shoes with personal endorsement. In order to maintain the advantages, the costs spent by Under Armor is larger than general sponsors, and the efforts are transformed into values. Curry performed greatly. It can be said that Curry himself hold up Under Armour’s market. While at the same time, the value of Stephen Curry in sports sponsorship market is also dramatically increasing. Therefore, this research will discuss the value of sports sponsorship to sponsee and sponsor by analyzing the case of Stephen Curry under sponsorship of Under Armour.

2 Type of sponsorship

Sports sponsorship is an investment in sports entities to achieve marketing objectives and support organizational goals. The entity can be athlete, league, sport team and sports event and so on (Parker, 1991). Sponsorship can be based on an event, an organization or an individual. The major types of sponsorship include business sponsorship, non-profit and foundation sponsorship, federal programs and individual sponsorship (Stovall).

There are many different forms of Sponsorship. For Stephen Curry and Under Armour, the sponsor provided required equipment for Stephen Curry to take part, the new boots. In addition, it also provides money for Stephen Curry, including a certain amount of market share in the company and a large number of endorsement fee. Under Armour also held some public activities in international market, and invited Stephen Curry for advertising.

3 Benefits for sponsor and sponsee

As the objectives of sponsorship can be both direct and indirect, the benfits of sponsorship also include direct and indirect ones for both sponsor and sponsee (Abratt et al., 1987).

3.1 Benefits for sponsor- Under Armour

For sponsor, the direct benefit is the increasing consumer demand for the sponsoring organization and its products, due to the attachment of products to Stephen Curry. This is also the final strategic objectives for sponsor(Shilbury et al., 2009). According to Morgan Stanley investment company expert Saul, in a year’s time, the amount sales of the Under Armor footwear with Curry’s endorsement increased by 350%.

At the beginning of 2015, Under Armor launched Curry’s signature warrior Curry One, which also increased the sales of other basketball shoes. Only in the second quarter of the Warriors’ playoff, Andrea’s basketball shoe sales soared 754%, while in the first half of the year, it’s four times more than the same period in 2014. Sozzi (2015) proposed three signs that Stephen Curry has profound impact. Firstly, retailers want to sell more Curry merchandise. Secondly, new products launched on the website are quickly resold. And lastly, sales of Under Armour’s footwear are surging

While in an indirect way, the sponsor Under Armour get generating awareness in the market, and improve competiveness. In 2014, Under Armour becomes the second largest brand in north American sports market. It also treated the leading role of Nike intensely. US media also speculated that, Under Armor brand is likely to become the world’s second largest sports brand because of Stephen Curry star effect.

Sponsorship is a kind of merchandising or a way of advertising. But different from traditional media, the sponsorship is of lower costs. It breaks the barriers to diverse media. For media include television, newspaper, social media and website, as long as Stephen Curry performs on these media, Under Armour gets its exposure. For example, in china Stephen Curry opened his Sina Weibo. The fans has been over 2.44 million currently. This is marketing based on social media and internet. While when he played role in NBA games, the television becomes platforms. In summary, with popularity of the sponsee, the sponsor’s name will be brought to the public, prominently displayed on advertising, seen on the TV and in newspapers, heard on the radio and every media platforms with barely costs (Gwinner, 1997).

Moreover, sponsorship can create a positive image for the company. The image of Stephen Curry represents the image of Under Armour, through sponsorship it builds relationships with customers and image enhancement (Chavanat et al., 2009).  Stephen Curry has its unique characteristics. He is a very hardworking player and does not afraid of failures or difficulties. This is consisting with the spirit of Under Armour, seeking to transcendental ego and be more professional (Gwinner, 1997).

In addition, because the sponsee, Stephen Curry is a famous basketball player internationally, it can help the sponsor to reach new target markets and specialized target markets. Although the contract provided by Under Armour for Stephen Curry is the boots, the reputation brings market opportunities for other products of Under Armour, such as its clothes. The personal image of Stephen Curry also brings positive influences. In china, fans called him “mengshen”, meaning very cute and nice image. He is young and active. He is a good player, husband and father as well. Customers who value family believe in him, and thus in the brands (Rovell, 2016).

The popularity of Curry among customers not only influence general audiences, but lead to fans economy. Customers buy goods and services. But fans are enthusiast and fanatic (Crawford, 2004). In fans economy, the Personal commitment and emotional involvement of customers generally leads to decrease in price sensitivity and outcome sensitivity. Curry has its fans group, which are the most important customers for Under Armour.

3.2 Benefits for sponsee – Stephen Curry

For the sponsee Stephen Curry, the direct benefit is the increased exposure given by the sponsor. The value of Stephen Curry as a basketball play also increased a lot in the sponsorship market. According to analyzers, the brand value of Stephen Curry to Under Armour could be worth 14 billion dollars (Haden). The contracts between Under Armour and Stephen Curry could influence the stock price of the company.

However, the direct benefits to Stephen Curry is the increasing income level. The endorsement fee provided by sponsor is over 15 million dollars. Curry also has stock share in the company, which is also valuable due to the company performance. Because of enough money, curry can train and compete without financial burden. He can also use the money to do many things, such as charity and coach for sports. Without financial burden, curry can do full-time work and concentrate on the sport.

4 Negative impact on sponsor and sponsee

4.1 Negative impacts on sponsor- Under Armour

Aaker proposed the conception model of brand equity (1991). Brand equity is formed by five aspects, Brand Awareness, Perceived Brand Quality, Brand Association, other equity of brand and Brand Loyalty (Aaker, 1991). The former four aspects can contributed to brand loyalty. Perceived Brand Quality and Brand Association are the core of brand equity. Among customers who know Stephen Curry, they formed association for Under Armour. However, according to the Building Customer Based Brand Equity theory proposed by Kevin lane Keller (1993), the Perceived Brand Quality must be positive to ensure the effects of marketing, otherwise it will lead to negative influences (Keller, 1993).

This model is important to obtain customer loyalty, particularly for non-fan customers. There are differences between identification to brand and loyalty to brand. According to Kagan (1958), identification is a process when individuals react to something that happened to them. While loyalty means that the individual have tendency to repeat purchasing behavior. Only when customers have loyalty, they are sensitive to the specific brands (Odin, Odin and Valette-Florence 2001).

Although successful sport sponsorship could obtain benefits with low costs, it is also of high risks. If the player did not do well, both in professional area or in individual life, then the sponsor will have had poor value for money (Woisetschläger et al., 2015). Before Under Armour, Stephen Curry was a sponsee by Nike. However, Nike gave him up when his career was in bad time (Haden). Under Armour saved Stephen Curry, who also created large values to the brand. But it would be a loss for Nike. So for sponsors, especially new entry in the market, it is difficulty to select the right sponsees and to maintain their values. However, according to the empirical study conducted by Abiodun (2011), companies are not too keen on taking risks unnecessarily. They are willing to provide sponsorship for diverse target segments due to the good image and wide region of audience (Abiodun, 2011).

In addition, differences may occur during the sponsorship process. Sponsorship is about building a long term relationship. The longer the sponsorship lasts, the more the value to both the sponsor and sponsee (Cornwell and Relyea, 2000). Particularly, sponsors depends more on a long term relationship. However, in recent days, the relationship between each other is intense. Due to the different opinions between Stephen Curry and the CEO of Under Armour according to the statement of Donald John Trump (Heath, 2016). Although this affair has not been clearly solved, it brings public relation crisis to the company (Schnittka, 2010).

4.2 Negative impacts on sponsee – Stephen Curry

As for the negative impacts on sponsee, the sponsorship can be withdrawn if the performance is bad. But a worse impact is that, sponsee may have to be under lots of control by the sponsor. For example, with the agreement between player and sponsor, the player have to wear the equipment under certain conditions. They also need to obtain approve of the sponsor of not wear. There is no consultation for the sponsee not to wear the sponsor’s name. In addition, personal life of the sponsee may also be influenced. The public pay attention to their personal life, which could influence the brand image. So sponsee need to pay attention to what they do.

Sports sponsorship is an effective way for marketing. But it is also a rare resources for players or sports. Only very limited players and sports have the chance to obtain sponsorship. And particularly, those well-known players are more likely to obtain new sponsorship or higher value if they perform well. While for large number of less-well known players, they are under lots of stress to achieve such success.

5 Conclusions

In summary, this essay explores the value of sports sponsorship to both parties based on the sponsorship case between Stephen Curry (sponsee) and Under Armour (sponsor). The definition and type of sponsorship are reviewed. The sponsorship form between Stephen Curry and Under Armour are discussed. it explores the benefits of sports sponsorship for sponsor and sponsee as well as the negative impacts and limitations. For Under Armour, the sports sponsorship with Stephen Curry directly increase its sales, and indirectly build brand image, increase popularity, get generating awareness, improve competiveness and opens new market. while for Stephen Curry, the benefits include large income, increasing values and less burdens as well as achievements. The negative impact on sponsor and sponsee are also explored. For sponsor, there is still way to go to achieve brand loyalty, particularly when Perceived Brand Quality are negative. The sport sponsorship is of high risks when select the right one who will always maintain the performance. differences may occur during the sponsorship process, such as the political disagreement between Stephen Curry and the CEO of Under Armour. While for sponsee, Stephen Curry has the responsibilities to keep performing well. more control from sponsor will be added to sponsee. Sports sponsorship is an effective marketing strategy to both parties, but only number of limited players or other sports entities have the opportunity for sponsorship.

6 References

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