SI Vault
 
Triumph of the Swoosh
Donald Katz
August 16, 1993
With a keen sense of the power of sports and a genius for mythologizing athletes to help sell sneakers, Nike bestrides the world of sport like a marketing colossus
Decrease font Decrease font
Enlarge font Enlarge font
August 16, 1993

Triumph Of The Swoosh

With a keen sense of the power of sports and a genius for mythologizing athletes to help sell sneakers, Nike bestrides the world of sport like a marketing colossus

View CoverRead All Articles View This Issue
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Only six or seven college basketball players are invited to formally tour the World Campus each year and witness a Nike presentation, and only Shaquille O'Neal, who was a star at LSU when he look his tour last year, ever showed up in Reebok gear and yawned during the sports marketing team's elaborate spiel. O'Neal had told various agents and marketing types long before leaving college that he had his own ideas about his image and endorsement future. He had no intention of competing with Jordan, Barkley and the others already at Nike for money and air-time. So he signed a $15 million, five-year deal with the R company and went on to sell the Shaq umbrella marketing concept to other corporations for millions more.

Everyone at Nike seems to hope O'Neal fails miserably. Shaq—as any Nike secretary or sales rep from Beaverton to Pusan can tell you—is no Nike guy. "He's not a Nike guy because they don't have him," says Sonny Vaccaro. "What's a Nike guy? They got Nike guys in prison, too, you know. This stuff is——."

Although Nike executives consider the 1993 NBA draft crop uninspiring, their competitors do need new stars. So the marketing team gathered in the McEnroe building before the draft knew that Fila, Puma, Pony and some of the smaller companies were probably out to bag a signature star. One passing consideration was for Nike simply to corner the draft by signing up all the top players. But what would the public think of such a power play? No recent Nike tactic has raised more eyebrows among the sports business cognoscenti than the creation of its nascent sports management program, which reflects an effort to exert control over the images Nike casts into the marketplace. Nobody in Beaverton was pleased to observe the dilution of Jordan's Nike-clad image by the addition to his portfolio of Gatorade, McDonald's, Wheaties, Chevy, Hanes and other products.

But for Knight the decision to take action came when he first saw Agassi hawking Canon cameras on TV. When Agassi looked into the camera and said, "Image is everything," Knight flipped. "It was 180 degrees from our imagery," says Knight. "We work hard to convey that performance, not image, is everything."

The sports management program was born shortly thereafter. "This whole sports marketing thing's just gotten bigger and bigger," says Knight, "and the sports agent business is changing. Sports agents came out of an era when a guy making $100,000 was a well-paid athlete, and the agent was a fringe lawyer or a guy with a huge passion for a sport. On a $100,000 NBA contract the agent got $4,000. Now you get $120,000 agent fees for a single contract and another million for an endorsement—of which the agent gets up to 20 percent. The incentive to fragment an image is huge, and when you split it up too often, nobody wins."

Nike's first sports management client was Bo. As with Jerry Rice, Pippen, Sanders, Ken Griffey Jr. and Tim Hardaway, Jackson is a "marketing only" client. Nike pays him a yearly guarantee for the right to okay all his endorsements and nonteam marketing-related activities. Nike negotiated contracts with Pepsi for Bo and with Coke and Montgomery Ward for Pippen, for whom the company even did a "Scottie" candy-bar deal. Jordan was approached to join the new management program. "I told them that while I understood their feelings about control, they'd have to compensate me for what I could lose," says Jordan. "That ended the discussion."

The controversial "career management program" now includes only three athletes: rookie quarterback Rick Mirer of the Seattle Seahawks; the Miami Heat's high-bounding young guard, Harold Miner; and Mourning, whose NBA debut this season was overshadowed only by the presence of Shaq. "Five years from now maybe I will say we should have gotten Shaq," Knight says. "You rolls the dice and you takes your chances. After all, I am the guy who said a college player named Magic Johnson's professional future was in doubt because he was a player without a position. Remember that we didn't have Magic, and we didn't have Bird, and we still did pretty well."

For Mourning—who was drafted No. 2, after Shaq—the decision to allow Nike to select an agent to handle his contract with the Hornets, direct his financial affairs, forge his public image, manage his charitable activities and negotiate and control all his ancillary marketing agreements was something like the son of a military man joining the Army. At 23, Mourning is a Nike man young enough to have grown up as a Nike kid. He attended Nike summer camps and played in Nike high school tournaments.

As a high school sophomore Mourning was befriended by Vaccaro, whom Mourning considers to be one of the most important figures in his life. Not only did Mourning attend a Nike college, but to this day he is mentored by Thompson, the Georgetown coach and Nike board member. Vaccaro and Nike were widely criticized when Mourning decided to enroll at Georgetown, because it was assumed that Nike's close relationship with the Hoyas and Thompson had informed the decision.

In 1978 Knight had hired Vaccaro to establish a grass-roots basketball presence for the company. Nike quickly struck deals with a network of high-profile coaches. Some of them, like Thompson and Jerry Tarkanian, who was at UNLV at the time, were soon being paid six-figure yearly sums.

Continue Story
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20