It's not that Nike and Adidas haven't been innovating. Nike continues to focus on improving performance for elite athletes, but its emphasis on nabbing big-name partnerships with athletes to preach about its on-court capabilities might be netting diminishing returns. "Brands need athletes performing at a high level wearing their products," Powell said. "It gives them authenticity and credibility. That truism is never going to go away. But I think that brands are spending far too much money on athletes and really not seeing the return, at least in terms of merchandise sales, to offset those costs." LeBron James and Nike founder Phil Knight meet up in Los Angeles in February. Juan Ocampo / NBA / Getty Images