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Editor's note: This is a brief excerpt from a recent research report written by Hedgeye Retail analyst Brian McGough.

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Hedgeye's McGough: Under Armour Scores Win Over Adidas with Andy Murray Deal | $UA - andy

1-MINUTE TAKEAWAY from mcgough

At 27 years old, Andy Murray isn't quite a tennis dinosaur, but he's getting close. That said, this is still a coup for Under Armour which was able to steal him away from Adidas. The 4-year deal is just north of $5mm per year (about 2% of the company's 2014 projected marketing spend) and less than a half of a percent of total revenue. In other words, it's a drop in the bucket for UA. And it gives them a bonafide presence on the court.

The company's current lineup of athletes (Sloane Stephens and Robert Ginepri) don't spend a lot of time playing in front of a national TV crew. UA has been unafraid to diversify, trying its hand at everything from speed skating to supermodels, so tennis is a logical extension for the brand.

Bottom line: At the price that they are paying…this is a win for UA.