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In 1992 Nike spent some $250 million to create consumer desire through the association of products and sports, but this combined ad and "promo" (the in-house term for endorsement deals) budget does not include the huge royalties paid to some athletes when their signature products take off. Two decades ago the meager contracts offered Nastase and Portland Trail Blazer Sidney Wicks for wearing Nikes stretched the corporate budget. A decade ago the $100,000 a year paid to McEnroe was considered scandalous. And when Falk negotiated a $3 million, multiyear Nike contract for Jordan two years after that, it looked like the endorsement coup of the century.
These days Jordan rakes in more than $20 million a year from Nike and at least another $20 million annually from other endorsement deals. Jim Courier's interlocking guarantees from Nike might make him $26 million over four years. Agassi, who has been under contract to Nike since he was 16 and gets a $2 million-per-annum guarantee plus a royalty on certain items, is said to have been infuriated by Courier's numbers.
"The size of the payments to coaches is what's gotten all the attention lately," says Knight. "The first coach we ever paid was [former Oregon basketball coach] Dick Harter, in the '70s. After two or three years of trying to get shoes on the school, we heard that he had a deal with Converse for $2,500. So we said, 'If that's how it works, we'll pay him the $2,500.' The whole March Madness phenomenon took off on TV, and the numbers went up."
"The whole thing happens on TV now. A few years back we were extremely proud of a novel, three-quarter-high shoe we'd developed. But we only sold 10,000 of them the first year. Then John McEnroe had ankle trouble and switched to the shoe. We sold 1½ million pairs the following year. The final game of the NCAA basketball tournament is better than any runway in Paris for launching a shoe. Kids climb up next to the screen to see what the players are wearing."
Strasser used to say that "each sport has a separate dream, and we must design shoes that address each dream." But since 1987, as Nike has changed from a shoe company into what Knight and the others have called "a marketing organization," the strategy has been to ascribe to each dream a Nike association that often entwines premier athletes with a pair of shoes.
The work of drafting, balancing and maintaining the Nike endorsement team—and the trick of matching athletes with new products and new imagery—requires a particular, almost metaphysical vision of the sports landscape. If Nike is going to spend millions "presenting its athletes as whole people," as Knight has put it, taking the time to hang out with them and build them flashy shoes that conform to their personal tastes and obsessions (as Sanders's cross-trainers reflect his jewelry and Courier's fascination with baseball is the basis of his clothing line), the company says it can't afford some bland Mark Spitz.
"When I scout and draft a Nike basketball team," Howard White recently told a gathering of sports marketers in Beaverton, "I'm looking for attitude and style. If I were pulling together a competitive basketball team instead of a Nike team, I might need a great center, a player like a Brad Daugherty. He'll get everybody involved and help you win. But a player we draft has to represent something. We consider elements of style. Does he excite anyone? If he can't move people and offer a certain attitude, then he just won't do much for us as an endorser."
Nike guys don't have to be nice. "Every time McEnroe throws a racket," Strasser used to say, "we sell more shoes."
For every baby boomer who believes he or she has grown up with the straight-shooting Nolan Ryan or one of the serious track stars projected by Nike, and thus is offended by the behavior of Barkley or Agassi, there is a younger Nike consumer who is inspired by displays of attitude. But when Nike realized that the anti-country-club, rock 'n' roll tennis imagery projected by Agassi was turning off older players, it created the toned-down Supreme Court line, grabbed Courier with an estimated $3 million-plus signing bonus and designed a solid but warm campaign that would play up Courier's newfound maturity while projecting the energy and spirit he is often thought to lack.
Late this spring the consensus in Beaverton was that this year's NBA draft class would be thin on future superstars of Nike aptitude or attitude. Bobby Hurley, the feisty guard from Duke, certainly interested the company, as did Kentucky forward Jamal Mashburn and Michigan forward Chris Webber. But the Nike basketball stable was already full of talent, and with only a few exceptions the players were high-profile veterans. Perhaps the only missing piece was a heavily hyped rookie known as Shaq, who wasn't a Nike guy anyway.