Nike’s ups & downs: Jordan, Woods

Phil Knight, co-founder of Nike, was so enamored with a young Tiger Woods that the company began recruiting him three years before signing him to an endorsement deal at age 20.

“You could see him coming from way back,” Knight said. The young golfer would occasionally play in the Portland, Ore., area, near Nike’s head- quarters, “and we’d always invite him and his father out to lunch.”

It was the start of a long — and ultimately unprofitable — relationship.

Woods went on to become the greatest golfer of his generation, and Nike sought to benefit by selling clubs and equipment. But even the celebrity of Woods and his legion of fans weren’t enough to make it break even, said Knight, who left the company’s board last year. Nike exited the category a year ago amid Woods’s fading star power and the sport’s declining popularity.

“It’s a fairly simple equation, that we lost money for 20 years on equipment and balls,” Knight said. “We realized next year wasn’t going to be any different.”

But Knight, 79, gave credit to Michael Jordan, who came along before Nike had built a roster of superstar athlete endorsers.

“We had a lot of good players — we didn’t have really great players,” Knight said. “And we thought he had the chance to be that. He was obviously way better than we ever could have imagined.”

Luck also played a role in Nike’s rise: Sales got a boost after NBA commissioner David Stern ruled that the black-and-red Air Jordans violated league rules.

“David Stern did us a huge favor. He banned it in the NBA,” Knight said. “And so we ran a big ad that says, ‘Banned in the NBA.’ And every kid wanted the shoe then.”

The Jordan brand is approaching $3 billion in sales annually and still dominates the basketball shoe market despite the Hall of Famer’s retirement in 2003.