In a statement, Puma North America Inc, a unit of Puma AG, denied that ithas breached any of its obligations and stressed that it will "requireCarter to honor his exclusive ten-year Puma contractual agreement."

But analysts said Carter's decision, which could lead to arbitration withthe German sneaker company, is the latest example of the struggles proathletes face in a declining sportswear market.

Shoe manufacturers have been limiting their endorsement relationships withathletes for several years and scaling back some marketing campaigns, butthe trend now seems to be reaching all the way to the superstar level. "Thisis not the way you sell shoes anymore," says Tom Doyle, research directorfor the National Sporting Goods Manufacturing Association, a trade group inChicago. "I don't think athletes' expectations should be as high as theywere in the past."

Shoe companies and high-profile athletes have been parting ways withincreasing regularity lately. Reebok International Ltd, based in Stoughton,Mass, has cut its roster of athlete endorsers by about half in recent yearsand made news in 1998 by terminating a $5 million annual contract with LosAngeles Lakers center Shaquille O'Neal.

Last year, New York Yankees shortstop Derek Jeter and Italian shoe makerFila Holding SpA dissolved their contract. Jeter's agent says the companywasn't doing enough to support the relationship. A Fila official says thecompany agreed to end the contract after deciding to cut back on itsinvolvement in baseball. Jeter subsequently signed with Nike Inc. Details ofCarter's deal with Puma have never been disclosed, but industry insiders saythe shoe deal totaled about $800,000 a year a relatively large deal for anuntested rookie. Carter's agency, PMI ProSports Marketing, said in astatement Tuesday that the basketball star "No longer endorses Puma productsand Puma is not authorised to use his name."

A spokesman for Carter said Puma hasn't yet made good on its promise tointroduce a new shoe line for the athlete, and that the level of advertisingsurrounding Carter has been far lower than expected.

The loss of Carter would represent a significant setback for Puma, which hasgone against conventional wisdom by signing a brood of promising young starsincluding Carter, US Open Tennis champion Serena Williams, New OrleansSaints running back Ricky Williams and boxer Oscar de la Hoya.

In addition, the company has been making inroads into the licensed apparelbusiness, buying the rights to make uniforms for National Football Leagueand National Basketball Association teams. The company recently launched a$70 million ad campaign featuring the tagline: "The relentless pursuit offun."

In years past, Carter's breakout performance in the NBA last season- whichhas drawn flattering comparisons to Michael Jordan - would have beenfollowed by a marketing blitz from his endorsers. But by all accounts, theroughly $50 billion sporting-goods business has been soft lately, andfootwear sales have been dismal.

Fila's footwear sales in the US, for example, dropped 48 per cent for thefirst nine months of 1999, according to company reports. Moreover, Doyle andother analysts say the public has grown "a bit jaded" by the salary demandsand off-court conduct of many pro athletes. Both Converse Inc. and Fila haveterminated contracts in recent years for behavioral reasons. Above all else,Carter's troubles at Puma seem to suggest that no superstar jock will soonmatch the shoe-marketing track record of Jordan, who will introduce his 15thsignature Nike sneaker next month.

Even Allen Iverson of the Philadelphia 76ers - one of the rare NBA athleteswith a signature shoe on store shelves - isn't benefiting from a majormarketing push. A Reebok spokesman says there are currently no majoradvertising campaigns planned for the shoe until next fall.

(The Wall Street Journal)