Sports Business Digest » Nike

Nike replaces Umbro as Man City uniform manufacturer

Emmett Jones — Wed, 09 May 2012 15:48:15 +0000

Manchester City is continuing to increase in notoriety both on and of the pitch. Fresh off the club's 1-0 win over Manchester United last week, which was broadcast to American audiences by ESPN, comes the announcement that Manchester City will officially name Nike as the team's official uniform sponsor beginning in the 2013-2014 season. The club currently has a deal with England-based Umbro, a Nike subsidiary. While the move is nothing more than a vertical move within the Nike conglomerate, there is certainly something to be said from Man City generating enough interest to have Nike take over distribution and manufacturing duties.

As it stands now, Umbro's sponsorship will continue until the end of the 2012-2013 season -- Umbro has been Man City's uniform sponsor since 2009 -- after which Nike will manufacture and design all Man City uniforms, and any other ancillary products that are related, until 2019.

“We are delighted to have further strengthened our relationship with the Nike family,” said John MacBeath, interim CEO of Manchester City. “Nike's deserved reputation as the leading global sports brand, its unparalleled research and development capacity, leading global retail distribution networks and award winning marketing capabilities, mean that this is a very important step forward in the evolution of Manchester City.”

Currently Man City sits tied with Manchester United for first place in the Premier League, with Man City holding a tie breaker due to head-to-head competition.

Nike designer adds insensitive insult to Rose injury

Emmett Jones — Mon, 30 Apr 2012 12:56:21 +0000

In this current age of "instant-media", you'd think people would know better by now. Think before you tweet. Especially since the internet doesn't have a delete button. Nike shoe designer Jason Petrie caused a mini-firestorm on twitter over the weekend, when he tweeted the following after the knee injury to Chicago Bulls superstar Derrick Rose, [blackbirdpie url="https://twitter.com/#!/sevenzro1/status/196363865188085760"] The first half of that tweet is in reference to Miami Heat superstar Lebron James. Petrie and other Nike designers designed Lebron's Elite 9 shoe which he wore during the Heat's playoff game on Saturday. "Pooh" is a nickname for Rose, which was given to him by his grandmother. Rose signed a reported $260M endorsement deal with Adidas in February. Clear insensitivity aside -- Petrie followed up his tweet with well-wishes for Rose, only after tweeting a delightful rant of since deleted "me against the world/I hate everyone who disagrees with me" tweets -- his actions once again bring to light how easily brands can be effected, either positively or negatively, by the world of "instant-media". Surely, Nike is in no danger of shutting down tomorrow -- its had a monopoly in the basketball shoe market for years now -- but if even one person begins to question Nike's integrity or the quality of their employees and decides to base their purchases off of Petrie's ill-conceived tweets, then its clearly to the company's detriment. Losing a repeat customer or even failing to sway a fringe customer is never good for business, regardless of the size of your profit margins. That being said, Nike went into PR mode on Sunday, issuing this statement,

"As a brand that is passionate about sport, we recognize the intense level of play that every athlete has engaged in during this basketball season and respect the dedication it takes to compete. One of our basketball footwear designers posted comments online that we feel are inappropriate, and he has since apologized. We wish anyone who is injured a speedy recovery."

In the age of Twitter, 140 characters can go a long way. Issuing a Sunday press release about a Saturday night tweet from a shoe designer, for example...its a little out of the ordinary. Apparently Nike, and other companies and sports teams who have personalities engaged in new media formats are continuing to suffer through the growing pains that accompany the usage of new media.

Nike, Hurley, and Converse team up for ‘Salvation’

Emmett Jones — Thu, 07 Jul 2011 12:51:44 +0000

Nike, Hurley and Converse have teamed together again to open the third of a series of a series of new retail concepts entitled 'Salvation Malibu'. The trio promises that this store, located in Malibu, California, will offer 'fresh attitudes, innovative consumer experiences, market tailored product offerings, community resources, and the introduction of customization services.' The previous two iterations of this multi-brand store, 225 Forest and Salvation Irvine, opened in 2009, in Laguna Beach, CA and Irvine CA respectively. As mentioned, Salvation Malibu looks to provide a unique opportunity for consumers; on-site customization,

Salvation offers the consumer the best products from NIKE, Hurley and Converse, and a premium shopping experience with a sales staff that demonstrates a passion for action sports, art, music and fashion. Salvation also offers consumers the unique and exciting opportunity to express their own sense of style and creativity at “The Workshop,” an on-site customization station allowing consumers to create their own custom footwear, apparel and accessories leveraging artwork from artists across all three brands. Consumers can choose items to customize, such as NIKE and Converse footwear, Hurley boardshorts and bikinis, tees and bags, providing consumers the power to create products that speak to their individual sense of style. It’s a portal into a design community, both virtual and hands-on, for consumers to share ideas, concepts and bring an artist’s eye to the key items from each of the brands.

For more information on Salvation Malibu, check out the store's Facebook page.

Lebron, Jordan sued by Lebron Jordan.

Emmett Jones — Thu, 10 Mar 2011 16:27:53 +0000

From the "This has to be made up" department, Lebron James, Michael Jordan, Nike, and Converse are being sued for $150 million dollars...by Lebron Jordan. [format] Lebron Jordan -- The Brooklyn-based start-up shoe company that was started using Google ad revenue from online dating sites -- is suing the aforementioned better-known entities for what essentially amounts to a count of tortious interference with business relationships. And how did those entities interfere with the business of Lebron James? [/format] By sending cease and desist letters for what they believe to be trademark infringement violations. [quotes]Nike, in its letter, pointed out that not only does the company own several trademarks using the terms Jordan and LeBron, but one of the shoe models on Lebron Jordan’s Web site appeared to be a carbon copy of Converse’s iconic Chuck Taylor All-Stars. Going further, Nike pointed out that the shoe appears to be standing atop a Converse shoe box. (via Portland Business Journal)[/quotes] Nike believed Lebron Jordan infringed on its various trademarks due to various factors (Similar types of goods, strength of Nike's own marks -- there's numerous criteria to examine in trademark infringement lawsuits) and they sent their cease-and-desist. The problem is that Lebron Jordan ignored the letter(s), apparently to their own detriment, hence the lawsuit, [quotes]“The negative press surrounding the threatened action against us has caused us to lose a multi-million dollar deal in addition to declining sales because of the assumption that we have infringed on their respective trademarks,”[/quotes] Yeah...Good luck with that. [format] Although Lebron Jordan did state their lack of affiliation with Nike and their various entities with their press release, the terms "Lebron" and "Jordan" are already pretty well established brand names and barring Lebron Jordan's ability to show priority (they established their trademark first), or to effectively assert a fair-use or parody defense, I don't see how the can even effectively litigate their lawsuit, let alone win it. [/format] Seriously...you're selling basketball shoes called Lebron Jordan's, for roughly the same price as a pair of Lebron James' or Michael Jordan's shoes, and you seriously believe that you won't confuse any consumers into inadvertently buying your product or dilute Nike/Converse trademarks in the process? [format] I hope they enjoy the publicity of this lawsuit, as Lebron Jordan may not be long for the basketball shoe world. [/format] (image via LebronJordan.com)

Under Armour wins BCS apparel battle, but Nike is still winning the war.

Emmett Jones — Tue, 11 Jan 2011 13:00:26 +0000

When is a loss still a win? [format] Last night, millions of viewers watched the Auburn Tigers squeeze out a win over the Oregon Ducks to win the BCS National Championship. What viewers also saw was a clash between two apparel companies; Nike and Under Armour. [/format] Oregon -- with their custom made Nike uniforms, and Nike chairman Phil Knight, their omnipresent benefactor, came up 3 points short to the Under Armour-clad Auburn Tigers led by Heisman winning QB Cam Newton. [format] Sounds like a victory for Under Armour and a loss for Nike, right? Well...not exactly. [/format] Under Armour received roughly $5.3 million in advertising exposure from the championship broadcast, $2 million more than Nike, with both teams receiving roughly 10 minutes of focused television exposure. (via Darren Rovell) They also managed to purchase every billboard outside of the University of Phoenix stadium to increase their presence for those fans on-site. The marketing plan, on its face, seems sound. Actually, it was impressive. Cam Newton was adorned in Under Armour logos, UA billboards were outside, and they received extended exposure on SportsCenter during the live interview session (see: Cam Newton and his Under Armour headband/fashionable choker). Moreover, its quite fortuitous that Under Armour happened to sponsor the team that eventually participated in the National Championship. UA hasn't thrown a ton of money into the collegiate marketplace -- University of South Carolina, University of Maryland, and Auburn -- ranking outside the top 25 in NCAA apparel licensees, yet they were able to land the 14th most popular team (Ed. Note -- not every team sells through the CLC. Teams like Ohio State and USC do their own licensing, but a large majority of the NCAA is represented)...and that team went on to win a National Championship. [format] Of course, don't throw a pity party for Nike, they're still doing just fine. [/format] To understand why, you have to remember that Nike still has a stranglehold on every business in which they participate. This is partially why they were so slow to move into the fast-growing "toning-shoe industry", why they were seemingly willing to let Tom Brady go (he later signed an equity deal with Under Armour), and why, while they're certainly watching the success of Under Armour with some interest, they are probably far from concerned. Nike is the company that stole the show away from Adidas at last year's World Cup, the company that was largely featured with Team USA basketball, and the company that signed an exclusive uniform/sideline apparel deal with the NFL last year. Is Under Armour making great strides? Of course. But Nike is still miles ahead of its younger competition. [format] Need proof? Nike brought in $20 billion in revenue from November 2009 to November 2010...Under Armour brought in a little under $1 billion in the same time span. [/format] Need more proof? The shirts and hats that the Auburn players were wearing after the game...Guess who makes those? [format] Even though Nike took a "hit" in the apparel battle, they're still clearly doing quite well in the war. [/format]

Chinese Shoe Companies Growing

admin — Wed, 20 Oct 2010 09:49:28 +0000

Recently there have been a lot of headlines featuring Chinese sport brands picking up shoe contracts with NBA players. NIKE (including the Jordan brand) still dominates the market with over sixty active players under contract, while Reebok has just under sixty, the rest is fractured between Converse, Adidas and a few others. So who are these Chinese companies and who are their athletes? For starters, Yao Ming's appeal and air time on Chinese television makes any Houston Rocket player a hot commodity and prime suspect to be nabbed by a Chinese shoe brand. Patrick Patterson is a prime example. Recently he was signed by Peak sports brand and is position by the company to be their American face. In the past Chinese shoe brands have kept to signing established and sometime second tier veterans. LiNing signed Damon Jones a few years ago, before he headed to Puerto Rico. And Anta signed Steve Francis and Bonzi Wells back when they where playing alongside Yao on the Rockets. Last year Anta signed it's largest deal ever by landing the 34-year old Kevin Garnett. But a few months ago Li Ning signed rookie Evan Turner and was reported to be having discussions with John Wall before he signed with Reebok. While Anta may be keeping with the old model of sighing veteran players Peak and Li Ning are looking to begin gambling on young talent to build awareness of their brand. Expect more headlines featuring young NBA talent signing deals with Chinese sport brands. And don't let yourself think this is necessarily a plan designed to sell more shoes in America. Actually, it is a branding strategy to obtain more market share in China. Yep... these companies are not interested in your greenbacks. So before you say to yourself or blog comment " these shoes are all ugly", remember... they where not designed to appeal to your fashion tastes. They have been made in China for China. They are just using the NBA and its players to sell more shoes in the market everyone is licking their chops to get into. Below is a list of current NBA players with Chinese shoe contacts. PEAK Patrick Patterson – Rockets Shane Battier – Rockets Kyle Lawry – Rockets Carl Landry – Rockets Ron Artest – Lakers Sasha Vujacic – Lakers Jason Kidd – Mavericks Sonny Weems – Raptors Darnell Jackson – Cavaliers Kevin Love – Timberwolves Jason Richardson – Suns LI NING Evan Turner – 76ers Baron Davis – Clippers Shaquille O’neal – Celtics Jose Calderon – Raptors ANTA Kevin Garnett – Celtic Luis Scola - Rockets

Does Nike’s NFL move kill Reebok?

admin — Thu, 14 Oct 2010 12:30:55 +0000

NFL owners approved a five year exclusive uniform/sideline apparel deal with Nike this week, marking the end of the NFL's relationship with Reebok (owned by Adidas). The move marks Nike's first return to NFL uniforms since 2001 -- the company previously only held footwear and glove rights. Nike's new deal will take effect in April of 2012. Although the terms of the deal were not disclosed, Sports Business Daily reported that Reebok paid the NFL a reported $25 million a year to become the official equipment supplier...in 2001. Needless to say, with the NFL's marked increase in popularity over the last nine years, Nike paid a larger sum for the right to supply the NFL's jerseys and sideline apparel. And as for the apparel itself? Apparently we can expect a radical change to the NFL's uniforms, according to CNBC's Darren Rovell's interview with Nike Brand President Charlie Denson,

Darren: Many fans want to know how much you are going to change the jersey. Will it be similar to what you've done in college with pretty significant overhauls? Denson: We plan on changing the NFL jersey dramatically just like we've done with the college programs, using new thinking and the greatest technology available. The NFL program hasn't had the same type of advancement in recent years. (via CNBC)

It's been an impressive few months for Nike. When they weren't stealing Adidas' spot light as title sponsor during the 2010 World Cup, or being mentioned as the "big sponsor" behind Team USA basketball during this summer's World Championships, they apparently were plotting to score a sponsorship deal with the NFL. The NFL deal comes on the heels of Nike reaching an all-time high stock price (a record which has since been broken), after the company set several financial records, including highest gross margins, free cash flow, and direct-to-consumer sales. While Nike is riding the high of what will be a huge NFL deal, what about the company that lost the sponsorship, Reebok? To say that the revenue obtained from the NFL deal was a large piece of Reebok's revenue pie? That'd be an understatement. Citigroup Inc. estimates that nearly $350 million of Reebok's $565 million in annual US sales came from their NFL contract (approximately 2% of Adidas' overall yearly revenue). While Reebok does have licensing deals with other sports (MLB, NHL, MLS) and high profile endorsers (Chad Ochocinco, Sidney Crosby, Peyton Manning, and John Wall all endorse the ZigTech line), the sales obviously pale in comparison to the roughly 60% of sales generated from the NFL contract. $350 million dollars...So, does losing more than 62% of their yearly U.S. sales revenue effectively kill Reebok? Not exactly. There has been a shift within the Reebok organization towards womens athletics and fitness, hence the ZigTech line, and Reebok's wildly successful Easy-Tone shoe product. Of course, for the sake of comparison, Reebok's Easy-Tone shoes, which were consistently sold out at various stores during the summer months, allowed Reebok to double their market share in the womens footwear industry to 7% (approximately $90 million in sales), with Nike still dominating the industry with more than 30% of the market share. $90 million is a far cry from $350 million...but such is the cost for shifting the company's focus. Nike has always had an advantage over its two competitors; it took Reebok being purchased by Adidas in 2006 to even make the yearly revenue comparable. They simply have more money to spend on the big sports sponsorships, especially when they're otherwise intrinsically tied to the sport, as they are with football. Maybe, for now at least, Adidas and Reebok are resigned to finishing in second place.

Nike stock. Now, at an all-time high

admin — Tue, 21 Sep 2010 15:00:18 +0000

If you are a Nike shareholder, you had a pretty good day yesterday. The company's stock hit an all-time high ($79.04) before closing $78.37.

The apparel giant, based outside Beaverton, also held its annual shareholder meeting Monday. Shareholders approved four measures at the meeting, each nearly unanimously. “Those might have been the highest votes we’ve ever had,” said co-founder and Chairman Phil Knight. “It might have been because of the high stock price.” Nike's fiscal year concluded on May 31. Despite a dip in sales, the company set several financial records, including its all-time highest gross margins (46.3 percent), free cash flow from operations ($2.8 billion) and direct-to-consumer sales (nearly $2.5 billion). At Monday's meeting, CEO Mark Parker reiterated his aggressive growth plans for the company, saying he wants to grow revenue to $27 billion by fiscal 2015. For Nike's 2010 fiscal year, the company had $19 billion in revenue. “That’s an ambitious goal, but it’s exactly what investors should expect from Nike,” Parker said. The company’s growth plans focus on several areas, including continued innovation and growth in brands such as Converse and Hurley. Parker wants to double Converse's sales to $2 billion within five years. Nike also plans to spend between $500 million and $600 million to beef up its retail presence. (via Portland Business Journal)

Nike has certainly been busy in the past couple of months, doing a great job of ambush marketing during this summer's world cup, they were just named the title sponsor of the 2010 Winter Dew Tour, and of course, who can forget Nike's strong ties with Team USA basketball? Brandon Jennings can tell you all about that, if you've somehow forgotten. Of course, that all being said, Parker's growth plan really is extremely aggressive. Granted, we seem to be out of the economic recession, but growing revenue by $8 billion dollars in 5 years? When you already seemingly have a stranglehold on the market? Nike should be a very interesting company to watch over the next couple years, as they try to reach that goal.

Landon Donovan, the newest national endorser?

admin — Wed, 23 Jun 2010 20:25:22 +0000

For those of you that have been away from any sort of sports programming today, Landon Donovan? He’s now kind of a big deal.

Donovan’s game winning goal, in stoppage time, has branded him as an American hero. Of course, from a marketing standpoint, the question becomes what can be done with Donovan’s new found fame? Octagon’s David Schwab summed it up best with this tweet:

“Landon may have just done what Lance, Mia & Phelps did. Be marketable outside of his sport.”

…And maybe he has. The first rule of being a nationally recognized endorser? People have to know who you are.

Check.

In the minutes following Landon Donovan’s game winning goal in the 91st minute of action (which sent the U.S. to the round of 16), (Internet) traffic spiked to 11.2 million visitors per minute, which moves the event past the 2008 presidential election as the second highest traffic spike of all-time.

Today’s number was also likely pushed significantly higher because England and Slovenia were also playing a suspenseful World Cup match at the same time. The plethora of World Cup breaking news briefly knocked Yahoo Sports offline and also caused issues at Twitter –- though the latter has been somewhat of a regular occurrence during the World Cup (on a related note, tweets containing “USA” spiked to 6% of total tweet volume). (via Mashable)

Combine that with whatever number of people that were watching the game on television and did not use the internet, and it’s probably safe to assume that Donovan is in the consciousness of the general American public.

It’s also vitally important that the athlete be “in demand”. The whole nation can know your name, but if they don’t actually want or believe in your brand? Endorsers will not be beating down your door. Needless to say, Donovan currently has that area covered as well,

Donovan, the face of American soccer, first appeared on a certified autograph trading card in 2004, pictured as a Los Angeles Dodgers fan as part of an insert set in the Playoff Absolute Baseball set.

That card, prior to Wednesday, was valued at a mere $40 but had been selling for as much as $75 during the first 10 days of the World Cup. In the moments after the U.S. national team’s victory over Algeria, one of the cards on eBay had eclipsed the $100 barrier with three hours still remaining while four new copies of the card had been listed within minutes of the outcome, with two sporting Buy It Now prices of $499.99 and the other two featuring $200 price tags. (via Beckett Blog)

Now, do I expect a Landon Donovan card to sell for $500? Well, no. But the fact that anyone even had the audacity to ask $500 for the card says something in and of itself.

Finally, the athlete has to actually be marketable. There are already a few well-known companies that believe in Donovan’s marketability; he currently has endorsement deals with Gatorade and AT&T among others, and was most recently spotted in Nike’s brilliant Write the Future commercial. He also is an apparent endorser of the Mexican lottery,

Donovan appears to be relatively marketable, he’s well-spoken, talented, and after today, he’s well-known and in demand…even amongst non-soccer fans. It certainly isn’t outlandish to see some more endorsement opportunities in the near future. Will Donovan’s goal put him on a plateau with heavy marketing hitters like Peyton Manning? Of course not. But might he be mentioned in the same breath as Michael Phelps or Lance Armstrong?

Quite possibly.

Viral Video? Look no further than Nike

admin — Tue, 18 May 2010 14:00:27 +0000

You know, I’m starting to think that this Nike company may be able to stick around for a year or two.

Nike, the sports shoe/athletic apparel/casual apparel super company, has immersed itself in the social media space. Whether you’re reading the latest basketball tweets on Nike’s basketball account, checking out one of their many Facebook pages, or checking out something on Nike’s blog, the company seems to be everywhere you look in the new media space.

Particularly, if you’re looking for a viral video.

According to branded video content distributor goviral, Nike owned three of the top ten most viral videos during the month of April. It seems like time and time again, there are a handful of big brand sponsors that are owning the viral video marketing space and Nike is one of them along with regulars Heineken, Coca-Cola, and Red Bull. (via Activ8Social)

As the article goes on to point out, three Nike videos (Secret Behind Nike Air, Nike Music Shoe, Earl and Tiger) went on to accumulate over 4.3 million views on Nike’s official YouTube channel…in the month of April. That’s not even taking into account all of the various copies of those videos that weren’t on Nike’s official YouTube channel. That’s a lot of eyes viewing your products, and hopefully making you, as a company, a lot of money in the process.

For the sake of showing an example, below is Nike’s controversial Earl and Tiger (created by Wieden+Kennedy Portland), taken from a non-Nike YouTube channel .

4.3 million views in one month is just another example of the power of social media. There is a reason why sports sponsors and sports teams are moving into this new media space; it produces results. Don’t believe me? Maybe you should go check out the video views on your favorite sports video.