Nike

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This article is part of the Center for Media & Democracy's spotlight on global corporations.

NIKE, Inc. (Nike), based in Beaverton, Oregon, USA, is a major sportswear manufacturer and the largest shoemaker in the world, selling in over 160 countries. Brands include NIKE, Cole Haan shoes, Nike Bauer Hockey (ice skates, apparel, and equipment), Hurley International (sports apparel for surfing), and Converse (shoes, apparel). Nike is buying UKs Umbro which makes football (soccer in the U.S.) products such as uniforms and shoes. In 2007, Nike sales are US$16.3 billion with profits of nearly US$1.5 billion. [1] [2]

Philip H. Knight, Co-founder and Chairman of the Board of Nike, has amassed a personal fortune of US$6.9 billion, putting him in position 31 in Forbes list of the richest people in the U.S. [3]

Kobe Bryant as the Marketing Comeback Kid

"Time heals a lot of marketing wounds," said the director of the University of Southern California's Sports Business Institute. In June 2003, basketball star Kobe Bryant signed a four-year, $45 million endorsement deal with shoe company Nike. Weeks later, Bryant was accused of sexual assault. Now that the criminal case has been dismissed and a related civil lawsuit settled, "Nike and Mr. Bryant are slowly relaunching the star's career as a product endorser." But even while Bryant's legal problems abounded, Nike had "an under-the-radar campaign intended to keep the star's cachet high among shoe collectors and other taste makers." That included limited releases of shoes "customized for Mr. Bryant that landed in upscale sneaker boutiques," raffles of shoes with Bryant's signature, and others with his personal logo, a "dagger-like etching." While "traditional consumer-product companies" are staying away from Bryant, Nike "recently rolled out its first Kobe print campaign." [1]

"Social Responsibility" as Cheap PR

Labor activist Jeff Ballinger dismisses Nike's corporate social responsibility (CSR) campaigns as cost-effective public relations. He told the Corporate Crime Reporter: "The CSR cost for Nike is about $10 million to $12 million a year, just for the CSR staff and expenses, to go to these sustainability meetings all over the world. ... They have two or three Nike people at every meeting. That’s part of the CSR game. ... I figure 75 cents per pair of shoes to the worker would fix the problem. If Nike instead paid workers 75 cents more per pair of shoes, do you know what that would cost Nike compared to the CSR cost? That would cost them $210 million a year." [2]

In June 2007, The Oregonian reported that Nike had declared its CSR campaign as no longer just "a risk and reputation management tool," but a core "business objective." Jeff Ballinger was skeptical. "In the 15-year battle over labor conditions for the 800,000 factory employees -- primarily Asian women younger than 24 -- who have helped turn Nike into a $14.9 billion company, Ballinger argues the activists won Round 1 and Nike staged a comeback in Round 2. The company's Code of Conduct was skimpy, its monitoring of factory conditions ineffective, but the attendant PR campaign was brilliant," wrote The Oregonian. Nike "is finally conceding monitoring hasn't worked," but claims "it needs more time." Nike wants until 2011 to eliminate excessive overtime; Ballinger points out that "Indonesian newspapers were writing about [the problem] in 1988." [3]

Mountaintop removal mining ad

In September 2010, Nike began running an ad with a background of a massive coal strip-mine, or mountaintop removal operation, to display their Pro Combat football uniforms. Nike's campaign was marketed as a "tribute to the hardworking people of the Mountain State, as well as the fallen miners in the Upper Big Branch Mine Disaster in April." But instead of featuring underground miners, such as those who died at the Upper Big Branch disaster, Nike's ad featured an open strip mine with a dramatic voice over: "It's just the way things are done in West Virginia." After people objected to the ad as unrelated to the disaster and a glorification of mountaintop removal, NIKE agreed to modify it.[4]

Political contributions

Nike gave $46,000 to federal candidates in the 2006 election through its political action committee - 54% to Democrats and 46% to Republicans. [5]

Lobbying

The company spent $450,000 for lobbying in 2006. All lobbying was done using in-house lobbyists. [6]

Personnel

Key executives and 2007 pay: [7]          Options
exercised
Mark G. Parker, Chief Executive Officer    $3,400,000    $7,380,000
Donald W. Blair, Chief Financial Officer    $1,590,000    $3,990,000
Gary M. DeStefano, President of Global Operations    $2,080,000    $5,520,000
Charles D. Denson, President of Nike Brand    $3,020,000    $4,080,000

Selected members of the Board of Directors: [8]

Contact details

1 Bowerman Drive
Beaverton, OR 97005
USA
Phone: 503-671-6453
Fax: 503-671-6300
Web: http://www.nikebiz.com

Related SourceWatch articles

External links

References

  1. Nike Profile, Hoovers, accessed November 2007.
  2. Company overview, Nike, accessed November 2007.
  3. Philip H Knight, Forbes, accessed November 2007.
  4. Jeff Biggers, "NIKE Runs Mountaintop Removal Football Ad, Disrespects Coal Miners" HuffPo, September 1, 2010.
  5. 2006 PAC Summary Data, Open Secrets, accessed November 2007.
  6. Nike lobbying expenses, Open Secrets, accessed November 2007.
  7. Nike Key Executives, Yahoo Finance, accessed November 2007.
  8. Board of Directors, Nike, accessed November 2007.