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VI. The Dream
Brian Clare, a 25-year-old Nike EKIN—EKIN, as senior executives often seem embarrassed to point out, is Nike spelled backward—says the honor of being invited to the Final Four in New Orleans was right up there beside the day he met Jordan. Clare was one of only four EKINs rewarded this year for their loyalty to the cause with a ticket to the Final Four. Clare sold insurance after college, and he worked in an athletic-shoe store for a while. But then he landed what he calls his "glamorous and completely cool" job, driving hundreds of miles each week from store to store, talking all day about Nikes.
In New Orleans, Clare met Dean Smith, the legendary coach of North Carolina; he saw Jordan's face projected onto a huge building near the Superdome; and he noted the requisite airport and highway billboards that propelled Nike into every vista. Clare says he felt as if he were part of "some amazing force."
From another vantage point the Nike profile at this year's Final Four was comparatively subdued. Converse, a relative fossil among competitors from the Nike perspective, had taken a full-page ad in USA Today, boasting that three of the four teams would be clad in Cons. Only Michigan would be sporting Nikes. "That was our game," Vaccaro said of his own Nike years. "We had all four teams one year, and we laughed at the world."
Vaccaro held forth in New Orleans alongside Strasser from an Adidas suite one floor above the Nike suite in the same hotel. The Vaccaro and Strasser reunion at Adidas was the talk of New Orleans—at least among shoe guys and sports marketing insiders—until word went around that Knight and Nike had also made a move. Mike Krzyzewski, the respected coach of Duke and a longtime Adidas endorser, had struck a deal with Nike. The piece of the rumor that lit up the Final Four cocktail circuit was that Krzyzewski would get a million-dollar signing bonus, a $375,000-to $400,000-per-annum multiyear contract and lots of Nike stock options. The deal would rank among the most lucrative ever struck between a shoe company and a coach, and the general reading of the story was that Knight had decided to send a message to Strasser as he and Vaccaro set out to revive Adidas. "Hell," said Vaccaro, "I'm not going to have a million dollars to spend on promotional deals all year. Adidas is like a pimple on Nike's rear end. Only Reebok can go head-to-head with Nike."
Sports marketing director Steve Miller admitted that the timing of the Krzyzewski announcement reflected a Nike proclivity for public orchestration, but he endeavored to point out that what was being called the "the Krzyzewski deal" was really a deal between Nike and Duke. The new trend for us, Miller explained, is to hook up "near exclusive sponsorship deals with whole universities"—as Nike is in the midst of doing with Southern Cal. As contracts with competing manufacturers run out, USC's foot-ball. basketball, tennis, volleyball and track teams will all be clad in Nike gear. "This is our new thrust," said Miller. "The money goes to the universities, and they can distribute it to coaches themselves. If the institution keeps some money for itself, we think that's the way it should be."
The Nike juggernaut raced through the first half of the year, striking deals, trying to make everything go faster. Record annual earnings were announced in July, with domestic sales up 10%—about what was expected, and essential because the overseas theaters were bogging down due to poor currency exchange rates and the European recession. If the goal of $6 billion in sales by 1996 is to be reached, then international sales must increase steadily. Meanwhile, women in America will be the focus of a heavy national advertising campaign. The outdoor fitness market—hiking and trail-running shoes and the like—is another growth area in which Nike sales have doubled over the past year (to $123 million), and they are expected to surge.
In February, Nike heralded its recent purchase of the cash-strapped Ben Hogan golf tour, one of the less prominent PGA circuits but one that has nurtured many top players. Golf-related sales account for only $32 million of Nike's $4 billion income, and its golf business has been relatively weak, but Knight believes the sport is "well run" and worthy of Nike association. During a mass conference with golf writers gathered to ask about the Hogan venture (now known as the Nike Tour), Knight bristled at the implication that Nike was after the upmarket types who play the sport. "That's like asking if we go directly at inner-city kids with our basketball line," he said. "We just do it to be in the sport. That's what we do."
In mid-April, in the wake of an agreement to outfit the entire Kenyan track team, a Kenyan runner sporting the new Nike colors (but still wearing his old Asics shoes) won the Boston Marathon. But the end of the month brought new indications of the tenuousness—the "fragility," as Knight always puts it—of an enterprise based on the fortunes and even the moods of athletes. First Bo Jackson stunned executives by refusing to participate in a new ad campaign designed around his hip. Then Sanders, distraught over scant playing time with the Braves, a dragged-out salary negotiation with the team, and the death of his father, suddenly decided to slop playing baseball. Trouble was, more than half a million pairs of the nifty gold-mesh cross-trainers—each shoe bearing Sanders's number with the Braves and the Falcons—were due to arrive in the stores in mid-June. "This," Knight observed, "is turning into an interesting May."
In early June, after Deion had returned to the Braves, the matchup in the NBA Finals more than compensated for the company's failure to monopolize the Final Four. Four starters for the Chicago Bulls and four for the Phoenix Suns were Nike endorsers. Jordan, Barkley and even Dan Majerle commercials were on the air before the Finals began, including a Barkley "role model" ad in which Charles says, "Just because I can dunk a basketball doesn't mean I should raise your kids."