Saturday, October 20, 2018

Nike's September to Remember

Nike is arguably one of the most successful athletic apparel/equipment companies in history. Founded by Oregon alumnus Phil Knight in 1964, Nike is currently valued at $29.6 billion and last year raked in $34.35 billion in profits. In addition, they sponsor a countless number of professional athletes ranging from LeBron James to Serena Williams as well as over 70 NCAA Division 1 schools. LSU is among one of the ten SEC universities who has a contract with Nike.

On September 5th, Nike made the decision to feature former NFL quarterback Colin Kaepernick in the 30th anniversary of their “Just Do It” advertising campaign. Kaepernick, most known for his kneeling protests during the national anthem, had not taken an NFL snap since 2016.

The commercial launched the night of the NFL Kickoff Game on September 6th and included the likes of Usain Bolt, LeBron James, Serena Williams, and Seattle Seahawks rookie Shaquem Griffin. Kaepernick narrated the entire one-minute advertisement but was actually shown in it for roughly about 10 seconds.

Approximately 30 seconds into the TV spot, Kaepernick uttered the notable line, “Believe in something, even if it means sacrificing everything.” This quote, on its face and as an impartial phrase, would tend to not rile up any reasonable person. However, because Kaepernick was the one saying it, various people throughout nation gave this statement more weight in either a positive or negative context.

As Nike probably expected, this move would send shockwaves throughout the entire country as the company’s stock price dropped about 2.2%. There were about three general types of responses that most Americans exhibited when the news broke of the Kaepernick advertisement campaign.

First, there was the upset crowd. Some of the more extreme people in this group tended to burn any and all Nike apparel they owned, cut off the Nike logo from any apparel that was not ablaze, and swore they would never buy anything the company manufactured ever again.

These people believed that Kaepernick’s kneeling before a football game had no resemblance whatsoever to the actions of the men and women in the military, fire department, and police force who are willing to sacrifices their lives every day.

Next, there was the supportive crowd. The people in this group praised Nike’s decision and saw it as a great promotion for social activism given the clout that the company has in both Corporate America and around the world. They took no issue with Kaepernick’s kneeling as the First Amendment of the United States Constitution gave him the right to peacefully protest.

Finally, there was the neutral crowd. The people in this group were either going to buy or not buy Nike products because that was their own prerogative. At the end of the day, Nike deciding to use Kaepernick in a commercial did not matter to them. It is possible and in fact very plausible that they just preferred other brands like Adidas, Under Armour, Reebok, and many others instead of Nike.

Though these reactions were reported more at the national level, Louisiana was not immune from the controversy. On September 5th, Mayor Ben Zahn of Kenner, Louisiana, sent out a memo that forbade booster clubs in the area from using or purchasing any Nike products. This ordinance lasted about a week before a protest rally featuring New Orleans Saints players Cameron Jordan and Terron Armstead prompted Zahn to talk to a lawyer and overturn the ban.

For the protesters, they were more concerned with the children of Kenner being targeted for wearing Nike apparel along with the economic impact the ban could potentially have on New Orleans. Cameron Jordan actually spoke at the rally and said the following, “Everything that Nike has done in its slogan is pushing forward.

So when it comes to something like this and it’s affecting the community that we’re in right now... how is this pushing forward?” Though he did repeal the Nike prohibition, Zahn was unapologetic. He reiterated that he had his focus “on the city of Kenner and the many great projects we have in store for our city.”

A month since the Kaepernick ad, tensions have appeared to calm down and Nike’s stock has moved back up to nearly $85 a share. The company still remains No. 18 on Forbe’s “Most Valuable Brands” list and is the only member of the apparel industry to hold one of the 100 spots.

Keep in mind also that on a global level, most foreign nations do not care about the actions of an American football player when it comes to companies they are deciding to invest in or buy from. This is evidenced by the increase of sales in China by 16%, in Europe by 13%, and in Latin America by 8%. Domestically, Nike’s stock as a whole has been up 50% this year and has surged to 134% since 2013.