Nike scores with sports protester

Colin Kaepernick took a big risk. Nike’s risk in backing him is less onerous. On Monday, the former National Football League quarterback revealed that the US sportswear group would feature him in ads marking the 30th anniversary of its “just do it” slogan.

Kaepernick is now better known for protest than sporting prowess: kneeling during the national anthem in support of the Black Lives Matter campaign. Toxic to NFL franchisees, he has not played in the league for nearly two years. Nike faces protests of its own for backing him. The world’s largest sporting brand has the financial muscle to ride it out without any serious loss of earnings.

Nike shares are just off record highs, with its enterprise value at $130bn. Its North American business had been declining for some time. Some of its shoe releases have been flat-footed and its retail distributors are fighting online disruption. But in its latest quarter, North American sales flipped to positive, growing 3%.

Direct sales and a partnership with Amazon are helping Nike defeat the shopping mall malaise. It forecasts that the proportion of revenue from digital sales will double in the next five years to about a third. Investors are enthusiastic. They have pushed Nike’s forward earnings multiple to about 30 times.

Ultimately, Nike is a global company focused on basketball, one of the most global games. Only about 40% of its revenue comes from saturated North America. Its growth engine is China. There, revenue jumped a fifth in the year that ended in June. Nike’s biggest athletes remain Michael Jordan, Kobe Bryant and LeBron James.

US football stars have never been a driver of athletic shoes or clothing. Yet Kaepernick is most popular among young Americans who are Nike’s core customers. Hiring him is an easy commercial call. If Nike wanted to take the same kind of bold move the quarterback did — one that damaged future earnings — the company would sign up a Chinese dissident instead. London, September 5