Time to take swish at Nike
Cold, hard cost analysis: Idea global sportswear giant has moral compass for sticking by Woods is ludicrous
The idea Nike has any moral compass is ludicrous. You would have to possess a heart of stone — or have placed a significant stake in Francesco Molinari at 30-1 — to begrudge Tiger Woods claiming his 15th major title at the US Masters golf major last weekend. Hollywood studios are already furiously sniffing the rights for a narrative that encompasses many trials, tribulations and a redeeming triumph.
His personal glory was shared by Nike, which quickly released a video entitled “never stop chasing that crazy dream” which attracted 24.6 million views on its website. For this, the company was lavished with praise. “Nike’s
years of loyalty to Tiger Woods paid off on Sunday,” was the headline on CNN. Meanwhile, the
New York Post commended Nike for “sticking by” Woods after revelations broke of various marital infidelities, his arrest for driving under the influence and a collapse in form when many other sponsors including Gillette, Gatorade, AT&T and Accenture abandoned him.
All this suggests Nike kept paying Woods during his fallow period through the goodness of its black, black heart. Yet even when Woods dropped to 1199 in the rankings, he remained by far the sport’s biggest name. One American golf writer estimates around 80 per cent of its web traffic is generated by Woods.
The company’s decision to keep backing Woods was a calculated gamble that paid off handsomely.
It is hardly like Nike took a punt on some up-and-comer who toiled for many years on the European Tour before winning big.
As with everything Nike does, the decision to keep Woods was based on a cold, hard cost analysis. As Woods’ other sponsors took flight, it would have calculated the impact of negative publicity versus his potential future earnings. On the sliding scale of moral outrage, driving while intoxicated and womanising rank as more forgivable sins, far below the threshold it has for cancelling contracts because of homophobia (Manny Pacquiao), industrial level doping (Lance Armstrong) and murder (Oscar Pistorius).
Profit is Nike’s only basis for action. Last year, it was praised for its “bravery” when it jumped on the Colin Kaepernick bandwagon a full two years after the former San Francisco 49ers quarterback began his kneeling protest against racial injustice.
Again, Nike would have crunched the numbers that a few hundred rednecks trying to burn its merchandise — usually unsuccessfully — in the ensuing backlash would be far outweighed by improving its connection with the “woke” generation. And it was right. After initially dipping, its share price rocketed.
Sorry, but the idea Nike has any kind of moral compass is ludicrous. This is a company that handed a lucrative endorsement deal to twotime drugs cheat Justin Gatlin, and welcomed back Michael Vick — a former Atlanta Falcons quarterback — after his release from prison for organising a dogfighting ring.
Also remember that its fundamental business model, critics allege, is based on exploiting sweatshop labour in south-east Asia.
In 2017, it was reported temperatures in excess of 37C had caused more than 500 workers to faint in Cambodian factories supplying Nike as well as Puma and Asics.
Around the same time, Nike launched its Kaepernick campaign, a group of former female employees launched a lawsuit for gender discrimination and ignoring sexual harassment complaints. Nike has denied any wrongdoing.
The company’s decision to keep backing Woods was a calculated gamble that paid off handsomely. Over the course of the Masters, Nike’s share price rose from US$85 to US$86.83 — the equivalent of a US$4 billion rise — while Apex Marketing estimates it gained US$22 million in brand exposure on Sunday alone.
So, let us not pretend Nike is a corporation overflowing with integrity and compassion — or that I am just embittered because Molinari dumped his ball in the water at the 12th and 15th.