Track without Nike

[Dave]

This has been an incredibly difficult few weeks for Nike and it’s role in track and field. Like any business, it mayst manage its public image. Right now, track is not helping that image.

What if Nike were to decide that enough is enough and withdraw its considerable support from the sport? I don’t think that is likely, but what if?

[guru]

Well they have a contract with USATF, so that financial commitment is fixed in stone.

With running being Nike's largest single sport shoe revenue source(3x basketball) they're not going anywhere.

[Dave]

Well they have a contract with USATF, so that financial commitment is fixed in stone.

With running being Nike's largest single sport shoe revenue source(3x basketball) they're not going anywhere.

Contracts could be bought out.

[guru]

Contracts could be bought out.

Only if USATF agreed. Considering the contract runs through 2040 and is worth $400 million that would have to be a pretty fat buyout check.

[Juicy News]

This has been an incredibly difficult few weeks for Nike and it’s role in track and field. Like any business, it mayst manage its public image. Right now, track is not helping that image.

What if Nike were to decide that enough is enough and withdraw its considerable support from the sport? I don’t think that is likely, but what if?

Less pros.

[Atticus]

What if Nike were to decide that enough is enough and withdraw its considerable support from the sport? I don’t think that is likely, but what if?

They can't, simply because their financial bottom line would suffer too greatly.

[Cooter Brown]

Well they have a contract with USATF, so that financial commitment is fixed in stone.

With running being Nike's largest single sport shoe revenue source(3x basketball) they're not going anywhere.

With 95% of those running shoes being sold with complete ignorance of T&F, does track really matter?

I'm sure Nike has outs in that contract. I'm confident their lawyers are much better than USATF lawyers and there's no way they don't sign that long of a contract unless it's slanted their way.

[deca]

They can't, simply because their financial bottom line would suffer too greatly.

They make close to $5 Billion in operating income annually, and could capitalize buying out the contract as a restructuring expense is spread out on their income statement over 5 years, so would be $80M per year (and further reduced by likely decreases in endorsement deals, and other miscellanies) would have less than 2% impact on their bottom line. But I don't think pulling out of track would be a huge impact in either case.

[Atticus]

They make close to $5 Billion in operating income annually, and could capitalize buying out the contract as a restructuring expense is spread out on their income statement over 5 years, so would be $80M per year (and further reduced by likely decreases in endorsement deals, and other miscellanies) would have less than 2% impact on their bottom line. But I don't think pulling out of track would be a huge impact in either case.

I would think that the current PR 'problem' would be exacerbated by withdrawing "support for Team USA", and their bottom line would be affected on several fronts.

[deca]

I would think that the current PR 'problem' would be exacerbated by withdrawing "support for Team USA", and their bottom line would be affected on several fronts.

Certainly could be. The PR fallout in general w Mary Cain, and I imagine others will add fuel to the fire - and amplify the message - will really have the impact over Team USA sponsorship. I'm seeing former Nike athletes who Nike abandoned as they got a shade older (even folks who were still number 2-3 globally in their respective events) - sending out emails, facebook posts, etc. This stuff goes viral quickly.