Triumph Of The Swoosh

Like Jordan and Barkley and Agassi before him, Mourning was after something not deliverable by performance alone. When it came time to negotiate with the Hornets, Mourning held out, and fans and reporters were quick to blame Nike. After a series of reports in the Charlotte Observer indicating that Mourning might never play for Charlotte because of the financial security Nike had already assured him, one angry letter to the editor asserted that Nike's $16 million deal with Mourning had "taken the spirit out of the game."

He finally came to terms with the Hornets in November 1992. Just a week earlier a million-dollar ad campaign against Nike was announced by an association of labor unions and manufacturers called Made in the USA. The association had stated that consumers would be asked in magazine and newspaper ads to send their "dirty, smelly worn-out" sneakers to Phil Knight. The idea was to call attention to the loss of domestic shoe-manufacturing jobs to low-cost foreign producers—which make almost every branded athletic shoe sold in the U.S.—and to repeated accusations that third world factory workers making Nikes earn as little as 14 cents per hour.

More than 200 U.S. corporations are, in fact, larger than Nike in terms of revenue, but it's hard these days to think of another company that generates so much popular passion. National TV news programs picked up on the mention of low wages and poor working conditions endured by Nike workers abroad, and the Made in the USA campaign generated so much publicity from the mere announcement of its intentions that the association never bothered to run more than one ad.

"We've become a discrete set of values for our consumers," says Nike p.r. director Liz Dolan, looking back on almost a year of incidents that had in some ways marred the perception of the company. "Because we're connected to sports, our success is perceived as something bad. If a computer company in the Silicon Valley grew so quickly that profits had doubled by the year, created thousands of new high-wage jobs and delivered buckets of money to its shareholders, the public would be thrilled."

Seven years ago Knight proclaimed that "some company will become the IBM of the sports-apparel industry within the next five years." But now that Nike logos mark the landscape far more prominently than those of IBM, now that Nike has risen above most of the other organizations connected to sports, the corporate quest is to not become the floundering IBM of the sports business. Nike is clearly the most efficient and powerful organization in sports, yet it exists in a hypercompetitive sphere that has been dominated by four shoe dynasties over the past 25 years. Knight believes that these empires, unlike auto or computer dynasties—but just like sports dynasties and batters on streaks—tend to ascend to brief, Icarian moments. Make the mistake of talking to a Nike exec about the company's "ownership" of half the basketball-shoe market or 75% of the cleatedshoe market or 40% of the running-shoe market, and he or she will break in with, "It's borrowed. No market in this business ever is owned."

"The brand cycles in this industry last only around seven years," says Knight. "You've got to reawaken the customer every season, yet there are these larger cycles. First Converse had its day, then Adidas, then Nike. The cycle took us from zero to a billion dollars in a short time, and suddenly Reebok had its years in the sun. Then Nike was reinvented during the late '80s, and now we're back on top."

"There is no doubt that this industry is looking for something new," says Gary Jacobson, a Wall Street analyst who specializes in the athletic-shoe industry. One of every three athletic shoes sold in the U.S. may be a Nike, but the American market has become saturated. The American closet is so full of colorful shoes that consumers tend to replace only those that have worn out. Nike talks of the urgency of deploying the "global power brand," of figuring out how to dominate the imagery of sports abroad as in the U.S.

So much of Nike's public presence is hitched to the abbreviated careers of its athletes that staying on top means establishing a presence at every draft, in every sport or tournament and on every team. "If we're a giant, then we're a pretty fragile giant," says Knight. "Every six months is like a new life. We can't take our eye off the ball, because if we lose it, we'll have a bitch of a time getting it back."

But as the company strives to maintain its lead, corporate imperatives seem to collide with the perceived values that Nike claims it is protecting. Nike has therefore become a lightning rod for all the popular ambivalence about the convergence of American business and American sports, and for an increasing uneasiness over the way sports preoccupy the public consciousness. Lately it has occurred to Knight that the sheer force of Nike's image-making has perhaps created expectations capable of blindsiding the company—and Knight, as all who know him confirm, is a man who likes to see what's coming.

It was a Japanese reporter who rose at the Nike-organized press event in a Barcelona movie theater before the medals-stand showdown. "Mr. Jordan," he said, "how does it feel to be God?" Jordan grinned his famous grin and deflected the question, but over the next several months, Nike's leaders began to wonder if, as Knight had said, "the hype had finally gone too far."