Andrew here. This morning, we’re taking a time out from the Musk-Trump soap opera for something a little less polarizing but just as dramatic: the business of creating stars in the N.B.A. Tania Ganguli, who used to cover basketball for The Times, reports from the N.B.A. finals on a critical question facing the league: How do you cultivate the next generation of transcendent superstars? Plus, Calum Marsh, a DealBook contributor who has reported extensively on sneakers, digs into why big brands like Nike and Adidas are selling digital versions of their shoes in the video game Fortnite. (Was this newsletter forwarded to you? Sign up here.)
Star struck
If you tuned into the thrilling Game 1 of the N.B.A. Finals on Thursday night, you may have found yourself wondering: Who are these guys? There’s no LeBron James, no Stephen Curry. No Lakers, no Knicks, nor even any Celtics. Neither of the teams — the Indiana Pacers or the Oklahoma City Thunder — had been in the N.B.A. finals for more than a decade. To the average sports fan, their rosters are largely unknown. “I’m not sure I completely buy into the premise of your question,” said Adam Silver, the N.B.A. commissioner, when asked about a finals with limited star power. “I think Shai is an enormous star.” He was referring to Shai Gilgeous-Alexander, who won the N.B.A.’s Most Valuable Player Award this year after leading the league in scoring and helping drive the Thunder to 68 wins, the most in franchise history. Silver also mentioned Tyrese Haliburton, the Pacer’s guard with a penchant for late-game heroics. But even Silver acknowledged those players are lesser known outside basketball fandom than the league’s biggest stars. In some ways, that’s a product of what the league wants — for all of its teams, no matter how small the market, to have a chance at making the finals. But that change also conflicts with one of its major tenets — that star power sells. Stars have fueled the N.B.A. since the 1980s. Larry Bird and Magic Johnson drove its stampede into the popular consciousness, and then Michael Jordan globalized the game. Stars drive viewership and interest, which in turn drive up the price of media rights deals, cash from sponsors, ticket sales and team valuations. For the past decade, the league’s ecosystem has revolved around James and Curry. James is now 40 years old, and Curry is 37. The question of who will be the next face of the league, once those two have retired, has hung over the sport for years. The league’s new push for parity could hurt its search for stars. Silver noted that part of what made Curry, James and all the superstars who came before them so popular was that they regularly played for championships. But the N.B.A. has deliberately made it harder to build a dominating superteam, and long strings of finals appearances are no longer the norm. At the same time, audiences are shrinking. More than 35 million people watched Game 6 of the 1998 finals, in which Jordan won his sixth (and final) N.B.A. championship. In 2023, when the Denver Nuggets won their first championship, the series averaged 11.6 million viewers per game. Winning alone does not guarantee the same amount of exposure as it once did. To some extent, stars are made. When Victor Wembanyama, the Frenchman who is nearly seven and a half feet tall, was set to enter the N.B.A., the league promoted his games while he was playing in France. But talent and exposure can take a star only so far. The best player on the 2023 championship Nuggets team, for example, was Nikola Jokic, a Serbian center who has won the league’s M.V.P. Award three times and is one of the best to have ever played the game. But he had no interest in promoting himself and didn’t capitalize on the moment to build his brand. Jaclyn Reilly, co-founder of Ethos Group, a brand strategy firm that works with the W.N.B.A. star Angel Reese, said the fracturing media landscape, with its ever increasing choices of content, made it more difficult for an athlete to stand out. “that’s why it’s even more important for the athlete to be strategic,” she said. All eyes are on Haliburton and Gilgeous-Alexander. The Thunder have built a sustainable team that some expect to be championship contenders for years. That would give more exposure to Gilgeous-Alexander’s game play, his fun sense of fashion and his signature shoe with Converse. His profile has already risen this season. For the Pacers, Haliburton has created several viral moments this season. In a playoff game against the Knicks last month, he made an improbable shot at the buzzer at Madison Square Garden to send the game to overtime. Then he made a choking symbol with his hands, a homage to the former Pacer Reggie Miller, who directed a similar gesture toward Spike Lee, a Knicks superfan, 31 years ago. Knicks fans hated that Haliburton did that — but they won’t forget it either. This week, in Game 1 of the finals, Haliburton hit a jumper in the game’s final second that won the game for the Pacers, who had trailed by 15 points in the fourth quarter. A performance like that, especially if it leads to a championship, just might be the kind that makes a superstar. Haliburton walked into his postgame interview carrying a pair of his signature shoes from Puma, which he had worn during the game. Some reporters chuckled as he thumped the shoes down on the table, and Haliburton smiled sheepishly. But he wasn’t going to let a chance for that much exposure slip by.
A feud between Elon Musk and President Trump escalated quickly. Tensions had been rising for days as Musk railed against the Republican policy bill and Trump pulled a close associate of Elon Musk’s out of the running to lead NASA. They reached a public breaking point on Thursday, when the president and billionaire entrepreneur traded insults and threats on social media. Tesla shares plunged more than 14 percent, rebounding slightly on Friday. Trump had a “very positive” call with China’s leader. The president implied in a post on Truth Social that he and Xi Jinping had resolved issues surrounding mineral exports, which China recently halted to the United States. The conversation signaled a potential thawing in the relationship between the U.S. and China after weeks of escalating tensions. On Friday, Trump said top U.S. and Chinese economic officials would hold talks in London on Monday. The labor market stayed steady in May. Employers added 139,000 jobs last month and the unemployment rate remained 4.2 percent, the Labor Department reported on Friday. But the report also hinted at turbulence: Revisions showed employers added 95,000 fewer jobs in March and April than previously reported, and job growth was driven almost entirely by health care and social assistance, as well as leisure and hospitality. A Supreme Court decision added more pressure on affirmative action programs. The unanimous ruling sided with a straight woman who lost positions to gay workers, arguing that the appeals court had been wrong to require her to meet a higher burden because she was a member of a majority group. Is the W.N.B.A. underpaid? In an opinion article for The Times, Claudia Goldin, the Nobel Prize-winning economist, argued that the relatively smaller audience and business of the women’s league compared to the N.B.A. does not justify the extent to which its players are paid less. The W.N.B.A attracts about one-third as many viewers per player as the N.B.A., for example, but its average salary is 1/80th that of the men’s league. The Latest Air Jordans? They’re digital.
Next, Calum Marsh, who has written about sneakers over the past five years, explains how brands are reaching kids with digital versions of their footwear. In March, when Jordan Brand released the Air Jordan 4 “Brick by Brick,” a collaboration with the BMX athlete Nigel Sylvester, they sold out almost instantly, quickly doubled in value on the resale market and were championed by collectors as an early contender for sneaker of the year. But for some sneaker fans, the real fun began two months later, when the “Brick by Brick” became available in Fortnite — as a fully digital replica that could be purchased for 1,000 “V-Bucks,” the game’s virtual currency, or about $8.99. Fortnite, the online multiplayer shooter by Epic Games, introduced Kicks, a vertical within its popular in-game marketplace dedicated to footwear, in November. Alongside a handful of quirky proprietary designs, the virtual shop sells shoes by Nike, Jordan Brand, Adidas and Crocs, which can be worn by player avatars and shown off during matches. For gamers — especially kids — these digital sneakers represent a form of creative self-expression. “The younger generation sees what happens on the internet as no less important than the offline world,” Funs Jacobs, a technology and culture strategist, said. “To older generations, it sounds insane, but it’s a bit of an identity thing.”
They’re also a big business. Fortnite, a free-to-play game, has more than 500 million registered users and an average of over two million active players every day. Its $5 billion in annual revenue comes almost entirely from the sale of virtual goods. Though Epic would not provide exact sales figures, a representative from the company said players had selected and applied Kicks to their avatars nearly seven billion times since November. Epic and its brand partners divide the revenue from in-game sneaker sales. But the sneaker companies have a more salient motivation. Consumers have been losing interest in sneakers, as the frenzy for retro shoes whipped up during the pandemic has gradually abated. Putting sneakers in virtual worlds is a way to drum up interest among younger consumers, who may be converted into ardent sneaker fans because they saw the shoes in their favorite game. “Gaming has emerged as a pivotal touchpoint in reaching and influencing Gen Z and Gen Alpha,” said Thomas Wehner, the global head of Adidas Gaming, pointing out that Adidas was eager to “authentically engage” with the “vast community, creativity and cultural relevance” offered by a game like Fortnite.
Younger audiences can be difficult for brands to reach through traditional media. Advertising in television, newspapers and magazines rarely reaches them, leading companies to look for opportunities across social media and video games for better reach. “By partnering with Epic and Fortnite to launch Kicks, we’re meeting the next generation of athletes where they are — in physical and virtual spaces,” said Nikhil Pandit, global director of gaming partnerships at Nike. The sneaker market is heavily nostalgia driven: Fans who grew up watching Michael Jordan in the ’90s have spent billions collecting his classic shoes. According to Nike, selling shoes in Fortnite is partly about the long-term payoff — it wants to build future nostalgia among a new generation who may one day want to buy the real-life version of the shoes they once owned in the game. But brands are also helping to facilitate the sale of real sneakers to those invested in the digital ones. Recently, Nike began offering customers who purchased digital sneakers early access to highly coveted shoes via their proprietary app — making it easy for a virtual customer to be converted into another real-life sneakerhead. Quiz: most valuable sneakerIdle time, a move to online shopping, and an increase in disposable income during the pandemic helped turn sneakers into an asset class, with the 2020 release of “The Last Dance,” an ESPN documentary about Michael Jordan, fueling skyrocketing resale values for Air Jordans in particular. In 2023, the auction house Sotheby’s sold the most expensive sneakers ever, a pair of Air Jordan 13 shoes worn by Jordan during the 1998 NBA Finals. What was the price? A. $50,000 B. $120,000 C. $1.4 million D. $2.2 million We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times. Thanks for reading! We’ll see you Monday. We’d like your feedback. Please email thoughts and suggestions to dealbook@nytimes.com. Quiz answer: D.
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