For nearly two decades, Kylian Mbappé has worn NIKE, Inc. (NYSE:NKE). On September 18, that relationship was officially over, and the World Cup’s all-time leading goal scorer signed with a company that only entered football this year and plans to launch its first football products in 2027. On Holding AG (NYSE:ONON)’s decision to sign Mbappé seems to be more than just a marketing splash, since analysts see it as a direct shot across the bow of NIKE and adidas, the two companies that have dominated football apparel for decades.
We recently examined why Baird abandoned its sportswear recovery thesis and downgraded NIKE alongside Dick’s. Read Here: Baird Pulls the Plug on Its Sportswear Recovery Thesis, Downgrading NIKE and Dick’s All at Once.
What the Deal Entails
Mbappé, who currently plays forward for Real Madrid, will become a global ambassador and collaborate directly with On’s product teams on footwear and apparel design. Financial terms were not released, but according to The Athletic, the deal includes an equity component in addition to cash, tying Mbappé’s own financial upside directly to On’s stock performance. Along with the Mbappé announcement, On named football commentator Thierry Henry as the company’s director of football, formalizing a connection that had been in the works since late 2025.
Why Analysts See This As a Bigger Story Than One Athlete
Evercore ISI analyst Michael Binetti didn’t mince words in a note to clients, writing that the announcement represented a direct challenge to NIKE, Inc. and adidas, which he described as having a near-monopoly in the football market. According to Binetti, a significant investment in such a broad category should act as a solid near-term catalyst for On’s stock. That’s a significant statement given the scope of what On Holding AG is getting into: adidas outfitted both World Cup finalists, Spain and Argentina, and also manufactured the tournament’s official match balls, while earning record revenue from jersey sales during the month-long event. Football clothing remains one of the largest and most entrenched segments in the sportswear market, and On has had no meaningful presence there until now.
Mbappé is expected to bring what the company calls his “elite perspective” to test and develop future football products, such as On’s robot-assisted Lightspray production technology. Telsey Advisory Group analyst Cristina Fernández pointed to On’s tennis roster as a template for how well this approach can work. Following the brand’s second-quarter results, Fernández noted that Flavio Cobolli and João Fonseca helped drive a nearly 300% increase in tennis apparel sales.
A Difficult Backdrop For NIKE
The timing exacerbates an already difficult stretch for NIKE, Inc.. The company’s shares are down about 42.95% year to date, with CEO Elliott Hill still dealing with a slew of issues, including rising competition from newer, trendier companies, On Holding AG foremost among them. NIKE also lost Barcelona star Lamine Yamal to Adidas in 2024, so Mbappé’s exit is part of a pattern rather than an individual loss.
Institutional Positioning
Institutional positioning shifted in opposite directions for the two companies. On Holding AG saw hedge fund ownership increase modestly, from 52 in the first quarter to 54 in the second. NIKE, Inc. experienced a steeper drop, from 71 funds to 56 over the same period, reflecting the broader institutional concern that has built up around the stock during its extended downturn.
The Case for On
Signing the World Cup’s all-time leading scorer provides On instant credibility in a category where it had no presence prior to this year, and the equity component of the arrangement aligns Mbappé’s personal interests with the brand’s long-term success rather than a one-time endorsement check. On’s tennis roster serves as a recent template for converting athlete partnerships into measurable sales lift, and Evercore’s framing of NIKE and adidas as having a “near-monopoly” suggests there’s real market share available for a credible new entrant to capture, especially if On can translate Mbappé’s global visibility into product credibility in the same way it has in tennis and running.
The Case for Caution
That said, football clothing is a well-established, capital-intensive industry in which Adidas, in particular, has decades of ties with clubs, leagues, and federations that a single athlete signing cannot replicate. On is starting from scratch against two competitors with significantly higher manufacturing scale, distribution networks, and marketing expenditures in this particular area, and gaining actual market share will most certainly take years rather than a single signing cycle. There is also a risk of translating Mbappé’s engagement into a product that resonates, as athlete input into design and testing doesn’t guarantee commercial success.
Insider Monkey’s Verdict
Investors in On Holding AG should look for concrete product milestones, football footwear launches, retail rollout, and any early sales data as the true test of whether this deal results in revenue rather than just headlines. Investors in NIKE, Inc. should see this as one more data point in an already well-documented competitive erosion story, and they should look for signs that the company’s broader turnaround under CEO Elliott Hill is stabilizing athlete relationships and brand relevance, rather than treating this single departure in isolation, because the broader pattern represented by losing both Yamal and Mbappé in recent years is more important than either individual loss on its own.
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