Harden's agent, Rob Pelinka, negotiated the deal. Pelinka confirmed on Thursday that Nike informed him that it would not match the term sheet from Adidas. The deal with Harden, which will have him wearing Adidas shoes on the court and gear in social settings, officially begins on Oct. 1.
As of now, Harden will average $16.78 million on the final three years of his deal with the Rockets and $15.38 million annually from Adidas. But if Harden hits certain benchmarks, it's possible he will earn more annually from Adidas than the Rockets.
Aside from a signature shoe, a Harden apparel line is expected along with branded marketing commitments. Harden and Adidas are also expected to attempt to disrupt the shoe marketplace amid underwhelming successes for the brand.
Harden became a sneaker free agent just at the right time, as Adidas needed to make a move. The company, which signed Chicago Bulls guard Derrick Rose to a huge 14-year contract in 2012, hadn't seen many dividends from that deal because of injury. Sales of the Rose shoe have failed to eclipse any of Nike's stalwarts -- LeBron James, Kevin Durant and Kobe Bryant.
The first signature shoe for the brand of Washington Wizards guard John Wall, who was originally with Adidas-owned Reebok, fell mostly flat. Portland Trail Blazers guard Damian Lillard is not only in the Pacific Northwest, but he's also on a team that isn't built for postseason success.
Adidas has been struggling in the United States. Last year, Under Armour passed the company as the second-largest apparel seller behind Nike, and Adidas has less than a 3 percent share of U.S. basketball shoe sales compared to Nike's more than 90 percent, according to market retail tracking firm SportsScanInfo. In the first six months of 2015, Adidas sold fewer shoes in the U.S. than Skechers and New Balance.
When Adidas' offer to Harden first came to light, it was thought that Nike would pass. Nike's stable is already well stocked thanks to James, Durant, Bryant and Kyrie Irving, while Chris Paul and Carmelo Anthony have shoes for the Jordan brand.
In his six years with Nike, Harden has never had a signature shoe, but the Hyperchase, which he wore almost exclusively last year, sold well.
Harden, now with the most recognizable beard in sports, has the off-the-court swagger that none of Adidas' other basketball spokesmen have, and his off-the-court presence could get maximum exposure as he just started dating reality star Khloe Kardashian. There's also an Adidas connection in that family, as pop star Kanye West, who's married to Kim Kardashian, left Nike for Adidas last year to make his Yeezys.
"We're a brand of creators and James embodies that more than any athlete in the game. His addition to the Adidas basketball family is a game changer," said Chris Grancio, Adidas global basketball general manager, in a statement. "This partnership gives him the opportunity to achieve his goals and express himself in a totally new way as a creator. He's already one of the most recognizable sports figures because of his game, his look, his hunger to win and his style on the off the court. His ceiling is far from reached, which tells you the future for him and our brand looks incredible."
There's also a built-in audience in China, thanks to the fact that former All-StarYao Ming made some of the nation Rockets fans.
Nike will take over for Adidas as the league's official apparel supplier beginning in the 2016-17 season.
FTGUp: Harden to Adidas a panic move
Scoop Jackson and Darren Rovell discuss if Adidas should make Rockets guard James Harden the Kanye West of basketball.