Such hoopla is a testament to Nike’s carbo-loaded marketing machine. Using its formula of identifying stars early, embracing controversial figures and designing products and ad campaigns around them, the company has pulled away from the competition, leaving rivals like Reebok gasping for air. Last week Nike posted quarterly earnings up 55 percent from last year, while reports circulated that the chairman of Nike’s No. 1 rival in the business, Reebok, Was fending off a palace revolt. But as the company races farther ahead of its rivals, it has crossed the line from ubiquity to controversy. At this year’s Open, athletes like Boris Becker complained that a Nike sponsorship guaranteed rivals better match times and more TV exposure. And one New York Daily News sportswriter charged that the Nike-NFL deal and the signing of Nike client Deion Sanders could “influence the outcome of a season and affect the balance of power in an entire sport.”
That may be a bit hysterical, but it’s dear that the $3.8 billion company’s influence goes well beyond its sales. Much of Nike’s clout comes from its ability to round up some of the world’s best competitors to endorse its gear. Nike officials aren’t saying just how many athletes the company has signed, but it sponsors 15 of the top 25 NCAA basketball teams and has endorsement deals with more than 250 NFL players. It’s also not afraid to bring controversial athletes into its stable. Example: basketball bad boy Charles Barkley, who has spat on fans at an NBA game. After the incident Nike ignored the bad manners and put him on TV saying, “I’m not a role model.” During the Tonya Harding-Nancy Kerrigan knee-bashing debacle, the company paid $25,000 in legal expenses for fellow Portland resident Harding. While Nike says it doesn’t necessarily seek out naughty players, the rebel image has been a big part of its marketing strategy. “They really dig the no-no celebrities,” says David Burns, who matches athletes with corporate sponsors. “They’re really turned on by that.”
Nor is Nike immune to charges that it abuses its marketing power. Consider the company’s college and high-school promotions. Typically, the company “adopts” a team, outfits it in uniforms, sweat suits and shoes emblazoned with the Nike Swoosh–and expects the team to don it. As critics see it, the practice presents two problems. One is that Nike’s presence in high schools could make it possible for the company to pressure athletes to attend Nike-supported colleges. The other is that the company’s largesse with coaches raises the question of misplaced allegiances. Says Bill Friday, former president of the University of North Carolina, whose basketball team wears the Nike label: “They influence the coaches’ salary, they influence who wears what, and they prescribe what logo is worn. I think they’ve gone too far.”
The problem has grown large enough to be of concern to the National Collegiate Athletic Association. In February the NCAA launched a committee to review the relationship between apparel manufacturers and the athletic community. The group recommended that the manufacturers be prohibited from writing, calling or meeting with student prospects for recruitment purposes. Nike officials defend the company’s sponsorship practices, saying it is no different from a local barbershop that backs a Little League team. “Like it or not,” says Nike spokesman Keith Peters, “sports are a big part of our lives, and they become part of our lives when we are kids.”
According to some critics, Nike’s partnership with the Dallas Cowboys is its most bold and disturbing move yet. In recent years, Nike has begged for the right to put the Swoosh on football gear, but so far it’s gotten licenses only for hats, gloves and caps. Under Jones’s deal, Nike would pay $2.5 million for the privilege of putting the logo on every seat, water bucket and grounds employee in Texas Stadium. The NFL is suing to block the deal on the ground that it infringes on the league’s ability to parcel out merchandising rights. But the pact could also impinge on an unwritten rule that says NFL teams must share in the revenue from merchandising. Since Jones doesn’t have to share the Nike money with other teams, the NFL charges, deals like this one would effectively steal from the poorer teams and give to the rich. Says Roger Headrick, chairman of NFL properties, “It could create a league of haves and have-nots.”
The deal also raises a question about whether Nike is helping the Cowboys sneak around NFL-mandated salary caps–and whether the shoemaker could unduly influence where free agents end up playing. Under league rules, teams that can afford to pay players big signing bonuses can amortize the payment over the life of their contracts and avoid bumping up against the salary cap. Teams could use money from Nike, the NFL says, to pay bigger signing bonuses, lure better players and sidestep the cap. And it only makes sense that Nike would prefer one of its star endorsers to play on a team that the company already backs. It’s an issue already. After Jones closed his deal with Nike, the Cowboys signed Deion Sanders to a contract that included a $13 million bonus. Jones was unavailable for comment. Nike’s Knight says, “We didn’t violate any NFL agreements or any laws of the land.”
Many of the gripes about Nike’s growing power may amount to sour grapes. Take Boris Becker’s assertion that Nike athletes got better match times at the Open. Even Becker’s manager admits that the reason for the better treatment is that Nike’s players are tops in the game. Knight dismisses the idea that Nike’s endorsement activity can tilt the playing field. “We don’t have that much power,” he says. “And we haven’t exhibited it in a way that’s really worthy of criticism–we truly care about the game.” The commissioner of the National Basketball Association, the league with the most experience dealing with Nike, agrees. “We’ve seen Nike’s influence on the NBA as very healthy,” says David Stern. Despite the controversy, Nike’s image is still scoring a slam dunk with consumers–more than one out of three athletic shoes sold in the United States now bears Nike’s Swoosh. And in the game of sneaker sales, those are the points that really count.
Nike got smacked with a lawsuit in 1987 for using the Beatles song to launch the Air Max cross-trainer.
Nike’s basketball shoes and Michael Jordan became synonymous in 1988. Spike Lee’s “Just Do It” spots starred himself as Mars Blackmon, the ultimate Jordan fan.
In a 1992 spot, aired during the Super Bowl, Jordan co-stars with Bugs Bunny, alias “Hare Jordan.”
The $12 million 1989 campaign featured the multitalented Bo Jackson and a bunch of other celebs from guitarist Bo Diddley to tennis star John McEnroe.
Targeted to Europeans, this 1993 glamorous high opera starred basketball bad boy Charles Barkley, flying angels and even a Don Giovanni-like ghost.
In these controversial 1993 spots, actor Dennis Hopper played a fanatic football fan who even sneaks into a locker room to sniff an athlete’s shoes.
Aired in time for this year’s U.S. Open, this spot featured both of the tournament’s top-seeded players–Pete Sampras and Andre Agassi.
Aimed at girls, these new ads show many young women urging their off-screen parents to let them play sports so they can avoid society’s ills.
