Every sports fan has seen the flashy TV commercials: Michael Jordan, leaping for the basket, seems to break free of gravity as he goes up, up and still higher up. The trajectory has been the same for the company whose shoes the commercial touts. Since its founding 21 years ago, Nike, the Beaverton, Oregon, sportswear conglomerate, has soared to greater and greater heights, becoming the $3.7 billion-a-year titan of the industry. The key has been Nike’s endorsement contracts with such top professional athletes as Jordan, baseball’s Bo Jackson (“Bo knows . . .”), football’s Jerry Rice and, to a lesser extent, several hundred others. But as it has lavished ever more millions of dollars on such tie-ins, Nike has seen something else rise along with its profile and its profits: concern in the sports world about whether it exerts too much control over its player-pitchmen and wields too much influence over the sports in which they compete.
Nike’s increasing clout has long troubled the National Football League, and even the mighty National Basketball Association. Two years ago, Nike ordered 90 of the athletes it has under contract to withdraw from part of the rich apparel-licensing deal by which the N.B.A. sells the players’ likenesses on shirts and hats — depriving the league of $1.5 million a year in revenue. In February Nike, along with Michael Jordan, wrestled from the N.B.A. the rights to the multimillion-dollar market for T shirts bearing Jordan’s image. “In marketing, Nike is far more powerful than the league,” says N.B.A. deputy commissioner Russ Granik. “They are the giant, and we’re the mouse.” Player representatives, seeing endorsement money rolling in to Nike athletes, are loath to criticize the company. “There are no rules barring what Nike is doing,” says Charles Grantham, executive director of the N.B.A. Players Association.
There are no National Collegiate Athletic Association rules either against what Nike does in college basketball, but that too has raised concern. The company pays millions of dollars to the coaches and athletic programs of at least 60 colleges — including Georgetown, Michigan and Seton Hall — in order to be the exclusive supplier of the players’ shoes. Last week Nike was negotiating a deal to pay Duke’s coach, Mike Krzyzewski, a reported $1 million bonus and $375,000 a year. Other shoe and apparel companies have similar arrangements — Reebok with Notre Dame, for example, and L.A. Gear with North Carolina State.
Nike’s director of sports marketing, Steve Miller, describes the transactions as a way for universities to raise additional funds for their athletic programs. Other observers question whether they violate the nominally amateur spirit of collegiate sports. Through them Nike positions itself to funnel future stars into its fold and in some cases guarantees them millions of dollars in endorsement deals before they sign with a pro team.
Nike’s influence contributed to a sticky situation last fall: two-sport wonder Deion Sanders was criticized for playing football and baseball over a single weekend when both his teams — the Falcons and the Braves — would have preferred his undivided attention. Sanders became severely exhausted and dehydrated in the process. Why did he do it? Partly because of his own competitive drive, partly because his Nike contract pays him $1 million a year as a two-sport athlete but only $100,000 as a one-sport athlete. The issue is, as one player agent puts it, “Will Nike’s interest always be the same as the athlete’s?”
Undaunted, the company recently opened Nike Sports Management, a division that offers athletes “total management contracts,” including endorsements, career guidance and marketing advice. The first three to sign: basketball stars Alonzo Mourning and Harold Miner and former Notre Dame quarterback Rick Mirer. Under the deal, Nike represents Mourning, for example, in nearly every aspect of his life, right down to finding him a townhouse (a Nike representative had the shower heads and counters raised for the 6-ft. 10-in. player), choosing what soda he drinks and telling him where to buy his stereo equipment.
His Nike contract, reportedly for a guaranteed $16 million over five years, supplied Mourning and his outside agent, David Falk (whom Nike helped select), with decisive leverage in contract negotiations between Mourning and the Charlotte, North Carolina, Hornets. “The Hornets knew I really didn’t have to take anything,” remembers Mourning, who held out until the fourth game of the season. He finally won a $26 million contract — more than he had hoped for. No wonder that shortly after the Hornets drafted him, Mourning answered as he did when the Sporting News asked whom he really plays for. “I work for Nike,” he replied.
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