See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/343451922

NIKE + KAEPERNICK: NEXT STEPS FOR AN ACTIVIST BRAND

Preprint · August 2020

DOI: 10.13140/RG.2.2.18892.03203

CITATIONS READS
0 2,175

2 authors, including:

Aimee Dinnín Huff

Oregon State University
21 PUBLICATIONS   254 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Early career researchers' isolation in emerging academic fields: strategies and management View project

American "Gun Culture" View project

All content following this page was uploaded by Aimee Dinnín Huff on 05 August 2020.

The user has requested enhancement of the downloaded file.

 NIKE + KAEPERNICK: NEXT STEPS FOR AN ACTIVIST BRAND

Aimee Dinnin Huff and Jason Stornelli wrote this case solely to provide material for class discussion. The authors do
not intend to illustrate either effective or ineffective handling of a managerial situation. Case facts are based on publicly
available information. This case is a working copy, version date: 2019-09-09.

It was January 2019. Four months earlier, in September, 2018, NIKE, Inc. (Nike) had kicked off the 30th
anniversary of their iconic “Just Do It” tagline with a new campaign that featured former American National
Football League (NFL) quarterback Colin Kaepernick.

Kaepernick was a controversial figure. To protest racial inequality and police brutality, Kaepernick began
kneeling during the pre-game U.S. national anthem, when players and fans were typically expected to
stand.1 His protests had spread to many other players throughout the NFL and attracted significant criticism
from prominent political figures.2 Kaepernick became a free agent at the end of the 2016 NFL season and
was not signed by any team; arguably, pressure and backlash from NFL fans and management contributed
to his lack of a contract.3

Then, in September 2018, Kapernick was featured in a new Nike ad as part of the 30th anniversary campaign
(see Exhibit 1) that included the copy, “Believe in something. Even if it means sacrificing everything.” The
ad was consistent with Nike’s history of provocative advertising, but it stretched the brand further into the
realm of political issues and inflamed significant anger over the issue of protests by NFL players. Fans
began burning Nike merchandise and blasting the brand on social media using the hashtags #JustBurnIt and
#BoycottNike.4 Donald Trump, the President of the United States, argued that Nike was sending a "terrible
message”5 and taunted that the company was "getting absolutely killed with anger and boycotts.”6

Faced with the prospect of alienating and losing a large portion of its customers, Nike had to decide on a
path for its 2019 marketing communications strategy. The first involved keeping Kaepernick on Nike’s
sponsorship roster, and featuring him in additional advertising and promotions. The second involved
pivoting to different social issues; this option would require consideration of whether and how to feature
Kaepernick. The third option was to retreat to politically-neutral messaging. The brand’s future actions
needed to be consistent with Nike’s mission, and should not impede the momentum and history of Nike’s
promotions.

NIKE: AN AMERICAN ICON

Nike was founded in 1964 by Phil Knight and Bill Bowerman. Nike’s mission was to:

Bring inspiration and innovation to every athlete* in the world.

*If you have a body, you are an athlete.

Our mission is what drives us to do everything possible to expand human potential. We do that by
creating groundbreaking sport innovation, by making our products more sustainably, by building
a creative and diverse global team and by making a positive impact in the communities where we
live and work.7

The company was headquartered in Oregon, USA, and the Nike EMEA (Europe, Middle East, and Africa)
headquarters was in The Netherlands. The company manufactured and sold athletic clothing and shoes, and
competed with other global brands such as Adidas, Under Armour, and Lululemon. In 2015, it was ranked
as the most valuable apparel brand in the world, ranking above non-athletic brands such as Ralph Lauren,
Tommy Hilfiger, Louis Vuitton, and Zara8. Nike’s 2018 Annual Report stated,
Page 2

With our unrivaled scale and scope, Nike is able to listen to the voices of athletes in every corner
of the planet. And as we step back and reflect on the big picture, we see something incredible: a
world with billions of athletes, united in the joy of movement… there's a world of opportunity for
Nike. The growing demand for sports, the embrace of active lifestyles, and demographic changes
are tailwinds for our business. And with our unparalleled product innovation pipeline, brand
strength, and digitized supply chain, these trends play to our strengths.9

Nike was a portfolio of brands owned by NIKE, Inc. Other brands included Nike Golf, Nike Pro, Nike+,
and Nike Skateboarding. Subsidiary brands in the portfolio included Converse, Hurley, and Jordan. Nike
was the world’s leading athletic apparel brand, and in 2018, Forbes ranked it as the #18 most valuable
brand in the world, ahead of BMW, Honda, Budweiser, and Visa.10 Selected financial statements for Nike
are presented in Exhibit 2.

The athletic apparel and shoe market was very competitive, and Nike had been losing market share to
Adidas in the teen segment.11 In the quarter ending August 31, 2018, Nike reported that revenues were $9.9
billion: a 10 percent increase over the year-earlier period12. Net income had increased 15 percent over the
same period. In fiscal year (FY) 2018, Nike’s revenues increased 6% to $36.4 billion13.

While Nike was an iconic American brand with global success, the company had been the subject of public
scrutiny for its managerial practices. In the 1990s, the company was involved in a “sweatshop scandal”
when its use of Asian factories with poor working conditions came to light14. In early 2018, two high-profile
executives stepped down as the public became aware of the company’s sexist corporate culture. The public
criticism was particularly problematic for Nike because the brand had long championed female
empowerment15.

Nike’s Promotional Legacy

Nike’s promotional efforts involved a range of tactics, including print and video ads, digital advertising,
and corporate sponsorship of sporting events, leagues, and teams around the world. Nike also sponsored
many professional athletes across a wide range of sports. Sponsorships included track and field athletes
such as Carl Lewis and Jackie Joyner-Kersee; soccer players Cristiano Ronaldo and Wayne Rooney; golfer
Rory McIlroy; tennis star Serena Williams; and basketball players Michael Jordan and Charles Barkley. On
occasion, sponsorships were suspended, such as when track athlete Oscar Pistorius was charged with
murder in 201316.

Promotions and branding centered around the iconic “swoosh” logo. For more than 30 years, Nike had
worked with Wieden + Kennedy, an Oregon-based advertising agency known for creating innovative and
culture-setting campaigns. In 1987, Nike’s ad, “Revolution,” was aired during The Cosby Show. It was a
groundbreaking format, with punchy visuals of professional and amateur athletes, and use of The Beatles’
song by the same name. Susan Hoffman, an art director at Wieden + Kennedy in 1987, later recalled that
Nike sought innovative ways to connect emotionally with consumers, in spite of the risks associated with
that approach: “after the [Revolution] spot ran and it worked, Phil Knight decided to research it, and the ad
tested poorly despite its real-world impact… Since then, Nike has never put their advertising into research.
Bravo!”17

Nike’s “Just Do It” tagline was created in 1988, and was unveiled in an ad featuring 80-year-old San
Francisco runner, Walter Stack18. The following year, Nike released an ad featuring Paralympian Craig
Blanchette, in what was one of the first mainstream ads to portray athletes with disabilities19. In 1993, Nike
featured Charles Barkley in a spot that sparked controversy over whether professional athletes should
behave as role models20. Controversy continued around a 1995 ad featuring openly-gay, HIV-positive
runner, Ric Munoz. The ad was applauded by AIDS activists because it portrayed Munoz as healthy and
normal, and did not evoke pity21. These ads helped Nike to position itself as a brand that pushed the envelope
and that shaped cultural associations with sport.
Page 3

In another 1995 spot, Nike took a position on gender issues and girls’ participation in sports with their “If
You Let Me Play” ad, which emphasized the benefits of sport for young women, including better health
and self-esteem, along with less depression, unplanned pregnancy, or likelihood of staying with an abusive
partner. Nike highlighted gender issues again in 2012, with “Voices,” which was released on the 40 th
anniversary of Title IX1. In 2017, the “What Will They Say About You?” campaign portrayed female
Middle Eastern boxers and skateboarders. The following year, Nike launched a hijab line of athletic wear,
and ran similar ads in the Middle East, Russia, and Turkey22.

Also in 2017, Nike’s “Equality” campaign addressed the topic of racial equality in sports and society, and
featured prominent black athletes such as Gabby Douglas, Serena Williams, Kevin Durant, and LeBron
James. At the release of the ad, Nike committed to donating $5 million to American organizations that seek
to advance equality.

Nike and the NFL

Nike was a corporate sponsor of the National Football League (NFL). In 2012, Nike reportedly agreed to
pay $220 million annually for five years to brand all NFL jerseys and provide officially licensed clothing23.
The two organizations were household names in the US. The NFL had broad appeal for Americans. As an
institution, it favored tradition, and had a history of pressuring broadcasters to provide favorable coverage
of the sport. The Super Bowl (the NFL’s championship game) was one of the most sought-after advertising
opportunities each year, and the NFL maintained a right to reject advertisements played during the game.

The NFL had revenue of $13.5 billion in 2017, up from around $6 billion in 2004. The league consisted of
32 teams across the country, which ranged in value from $1.6 billion (Buffalo Bills) to $5 billion (Dallas
Cowboys). Across American professional sports leagues, the NFL had the highest average per game
attendance (67,000 spectators per game in 2017; annual total of more than 17 million), and the Super Bowl
was one of the world’s biggest single-day sporting events24. In 2017, football was Americans’ favorite sport
to watch by a large margin25. More than half of Baby Boomers and Generation X (58% and 59%,
respectively) considered themselves fans of the NFL, and less than half of Millennials (47%) considered
themselves fans26. The sport was especially popular among people who identified as having moderate or
conservative political opinions27.

Consumers

One of Nike’s target markets was urban youth. In the US, approximately two-thirds of Nike consumers
were under 35 years old, and they represented a racially-diverse segment28. Of adults who had purchased
Nike products in the past three months, 44% were between 18-34 years; 44% resided in a city (rather than
a suburb, town, or rural area); and 34% identified as politically moderate, in contrast to 27% liberal and
23% conservative. Further, they were more ethnically diverse than the national population: 46% were white,
23% Hispanic, and 22% black29.

Nike’s customers were attracted to good quality athletic shoes and apparel, as well as the brand’s purpose30.
Nike’s brand identity encompassed taking a stand on social issues, and recent consumer research showed
that Nike customers were more receptive to such brands (see Exhibit 2). Further, marketing technology
research firm 4C Insights had revealed that, in terms of social media engagement, Nike’s most engaged
consumers were personally and professionally successful, and enjoyed spending money on travel and
entertainment, including online streaming31. The 4C Insights CMO noted that, “racial equality is a top
concern for this audience, along with causes like clean-water access and gun control32.” However, not all

1
Title IX is an American federal civil rights law (Title IX of the Educations Amendments Act of 1972, 20 U.S.C.
§§1681 – 1688 (2018)) that states, “No person in the United State shall, on the basis of sex, be excluded from
participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity
receiving Federal financial assistance.”
Page 4

customers shared an enthusiasm for progressive causes like social justice, the environment, and gun control.
In particular, older, more rural consumers were less likely than younger consumers to respond positively to
a company that advocates for protesters33.

THE SOCIAL CONTEXT

Despite the belief of many Americans that racism was a problem of the past34, racial prejudices and tensions
remained high in the United States. A number of young, black men had been killed in high-profile incidents
with police and other community members35. The killing of one man, Trayvon Martin, sparked the “Black
Lives Matter” movement, in response to a sense among some Americans that the lives of black people were
considered to be unimportant and disposable. This movement also generated pushback from other
Americans who often responded by saying that all lives matter.36

In addition, the political environment in the United States was fostering polarization, creating a tenuous
environment for brands. Donald Trump had been elected President of the United States in 2016, and brands
were under pressure to support or denounce the country’s new leadership. For example, in 2017, the chief
executive of Under Armour received criticism and threats of boycotts after he praised President Trump 37,
and received more threats after he reversed course and withdrew from Trump’s manufacturing council38.
New Balance also faced backlash after their head of Public Affairs praised President Trump’s attention to
US manufacturing compared to his predecessor, Barack Obama.39 In response, white supremacists endorsed
the brand and liberal consumers took to social media to burn New Balance products 40. New Balance was
compelled to issue a statement affirming that the brand “does not tolerate bigotry or hatred in any form”
and that it fosters a culture of respect.41

COLIN KAEPERNICK

Colin Kaepernick had made his career as a prominent and successful NFL quarterback. He was a former
member of the San Francisco 49ers, where he played for six years and led them to a Super Bowl. In 2016,
Kaepernick began to protest when the American national anthem was played at the beginning of football
games. His decision to do so was motivated by police shootings of unarmed African-American men.
Kneeling became his way of protesting social inequality, racism, and police brutality, and he sought to bring
attention to these issues42.

Kaepernick’s protest first involved sitting during the national anthem. He explained, “I am not going to
stand up to show pride in a flag for a country that oppresses black people and people of color. To me, this
is bigger than football and it would be selfish on my part to look the other way 43.” He later modified his
protest to involve kneeling. Other athletes – including those in other sports – began kneeling during the
anthem, and it sparked the #takeaknee movement.

When Kaepernick began his protests, the NFL’s policy was, “Players are encouraged but not required to
stand during the playing of the national anthem44.” Kaepernick’s coach said his protests were “his right as
a citizen,” and the team issued a statement saying,

The national anthem is and always will be a special part of the pre-game ceremony. It is an
opportunity to honor our country and reflect on the great liberties we are afforded as its citizens. In
respecting such American principles as freedom of religion and freedom of expression, we
recognize the right of an individual to choose and participate, or not, in our celebration of the
national anthem45.

Public attention, criticism, and support of Kaepernick was widespread. President Trump was explicitly
critical of Kaepernick and other NFL athletes who knelt during the anthem, and he encouraged team owners
to fire those who knelt. Many NFL fans were angered by athletes’ protests, perceiving them to be flagrantly
Page 5

disrespectful to the flag, the military, and the country. In response to pressure from fans, the NFL modified
its policy in May, 2017 to require players to stand during the anthem. Enforcement of the policy was
contested among league executives, owners, and the players’ union46.

Americans’ support for the act of kneeling was divided by age, race, and political affiliation. Quinnipiac
polls showed that two-thirds of voters ages 18-34 approved of athletes kneeling during the anthem, while
fewer than half of those above the age of 65 approved47. Further, 77% of black voters approved, while 53%
of non-Hispanic white voters disapproved; and 79% of Democrats approved, while 89% of Republicans
disapproved.

Kaepernick evolved as a civil rights leader. He was recognized by the American Civil Liberties Union,
Amnesty International, and GQ magazine. However, after Kaepernick opted out of his contract with the
San Francisco 49ers in March, 2017, no other NFL teams were willing to sign him, despite his on-field
credentials. Kaepernick initiated legal action against the NFL on the basis that the league had colluded to
keep him from playing due to his on-field protests during the national anthem48.

NIKE’S KAEPERNICK CONUNDRUM

For the year and a half leading up to September, 2018, Kaepernick had not worked as a professional football
player, but he was still being sponsored by Nike. This placed Nike in an unusual position of needing to
work with an athlete who did not have a team, and therefore did not present clear opportunities to sell
merchandise. However, Kaepernick enjoyed a higher level of popularity among Nike customers than among
the general public, and his merchandise continued to sell well in 201749.

Internally, Nike disagreed over whether and how to engage with Kaepernick; reports from anonymous
employees indicated that the decision to maintain sponsorship with Kaepernick was highly controversial50.
He was kept on Nike’s roster, but was not featured in advertisements or apparel, and his contract would
expire in early 201951.

While the company stood to gain credibility with younger, urban consumers by embracing Kaepernick, it
also stood to anger and alienate the NFL and many NFL fans52. In contrast, if Nike cut ties with Kaepernick,
it could be perceived as siding with the NFL and subject itself to negative backlash.

In April, 2018, Adidas took interest in sponsoring Kaepernick. Mark King, the president of Adidas North
America, publicly commented his company “would definitely want to sign him,” if Kaepernick were to
sign with an NFL team53. He noted, “If [one of our sponsored athletes is] an activist in a way that brings
attention to something that moves the world forward, even if there’s controversy at that moment, we’re
really interested in those athletes because I think it represents the world today.” However, he also stressed
that Adidas is not “in the business of activism, we’re in the business of sport54.”

Ultimately, Nike’s management team decided to proceed with a new campaign that they believed would
resonate with a younger consumer base by featuring Kaepernick, along with NFL star Odell Beckham Jr.,
NBA icon LeBron James, WTA legend Serena Williams, and prominent skateboarder Lacey Baker55.
Nike’s brand Vice President for North America, Gino Fisanotti, told sports broadcaster ESPN, “We believe
Colin is one of the most inspirational athletes of this generation, who has leveraged the power of sport to
help move the world forward56.”

THE “KAEPERNICK AD”

The 30th anniversary campaign was developed by Wieden + Kennedy, and embraced themes that had long
been associated with Nike’s branding and promotions: flair, swagger, powerful visuals and music, and
Page 6

inspirational copy57. It was intended to inspire consumers to pursue their craziest dreams, and underscored
athletes’ daring sacrifices, while building on the “Just Do It” tag line.

In late August 2018 – immediately prior to the Kaepernick ad – Nike unveiled a video ad called “Voice of
Belief.” It featured Serena Williams, and focused on her dream, drive, and sacrifices throughout her career.
The timing of the ad also conveyed Nike’s support for Williams after officials at the summer 2018 French
Open banned her catsuit-style attire earlier in August. The outfit was designed to prevent blood clotting, to
which Williams was prone, and Nike defended Williams with an ad that said, “You can take the superhero
out of her costume, but you can never take away her superpowers”.58

The next installment of the campaign featured Kaepernick. The ad was unveiled in a single tweet by
Kaepernick himself (see Exhibit 1). Over the next few days, a 2-minute film version, called “Dream Crazy”
was released and the ad ran during the NFL’s opening game. “Dream Crazy” was narrated by Kaepernick,
and featured prominent professional athletes as well as lesser-known athletes with exceptional stories, such
as Megan Blunk, a champion Paralympian wheelchair athlete; Isaiah Bird, a young wrestler who was born
without legs; and Alicia Woollcott, a linebacker and homecoming queen at her Michigan high school59.

Consumer Response

The campaign had an immediate impact. In the aftermath, a designer at Wieden + Kennedy commented on
his personal website:

This is a gargantuan project. W + K pushed to use Colin Kaepernick as the face of the 30th
anniversary Just Do It campaign. Nike agreed to it. We made it. Colin posted it. People lost it.
In the first week after the campaign's release, Nike's online sales went up 31%. We were featured
in Adweek, Adage, Buzzfeed, the NYT website, CBS News, Deadspin, Fox News, and many more.
We were trending on Twitter with 1.3 [million] tweets in the first 24 hours. Sometimes it's good to
be good.60

Market researchers at Morning Consult assessed consumer response shortly after the ad was released 61.
They found that 39 percent of Americans had a very positive opinion of the ad, and 9 percent had a negative
opinion. The message of the ad, and Kaepernick in particular, were viewed more favorably among black
Americans, Democrats, and younger consumers. Other research indicated that consumers’ emotional
responses to the video version of the ad were tied to their political ideology. Researchers at Spark Neuro
studied biometric62 data of individuals watching the “Dream Crazy” ad, to understand how levels and
changes in emotional intensity are linked to political affiliation. The research showed that Republican
consumers had higher emotional responses when the ad referenced politically charged topics, such as
refugees, while Democrat viewers experienced higher emotional responses at the end of the ad, when
Kaepernick faced the camera63.

Analysts estimated that the Kaepernick ad generated more than $40 million in free advertising for Nike64.
Online response to the ad was significant across several metrics. Brand sharing (the sharing of Nike’s online
posts) increased 1,260%, and online volume increased 477%65. Industry experts recognized it as being
highly polarizing; in comparison to the 3 months preceding the ad, the ratio of consumer conversations that
were positive stayed constant (33%) but negative conversations increased from 9% to 31%66. Further, the
increased Nike-related online and offline conversations came at the expense of the competition67.

Marketing experts revealed that the consumers most likely to participate in the conversations were women;
individuals who identified as Republican or Democrat (as opposed to independents); and those from the
southern states. Additionally, much of the negative discussion could be attributed to non-customers,
suggesting that sales may not be negatively impacted.
Page 7

Some consumer response was negative in relation to the notion of sacrifice. One contributor in USA Today68
said, sarcastically, “By ‘sacrificing everything,’ evidently Nike means ‘make millions of dollars more a
year to appear in an advertising campaign than you would make as a back-up quarterback in the NFL.’ Boy,
has Kaepernick ever sacrificed!” The contributor went on to note another negative element: the integration
of politics and brands:

Does Nike really believe that every moment of every American’s life must now be spent weighing
politics? I don’t want to enter a sports apparel store and have to pick a shoe brand for myself or my
three young sons because of a company’s politics. As a political moderate who voted for Gary
Johnson in 2016, I don’t want to have to place every company into Republican or Democrat
buckets, and decide what to buy while analyzing these factors. But that’s what Nike’s decision has
forced me to do. And as a result, I have bought my last Nike products for me and my boys69.

Negative response also took the form of calls for boycotts of Nike and the NFL, as well as a #JustBurnIt
counter-campaign. For example, one Twitter user replied to Kaepernick with “You sacrificed nothing. You
are a spoiled punk who is a horrible quarterback, destroyed a once great franchise, started a movement
disgracing REAL heroes who sacrificed their life to die for America all for you to parade as a fact victim
blaming racism while you get paid to do it70.”

The NFL released a statement shortly after the ad was released, and said: “The social justice issues that
Colin and other professional athletes have raised deserve our attention and action71.”

MARKET RESPONSE TO NIKE’S BRAND ACTIVISM

Immediately following the release of the ad, Nike shares dropped about 3 percent 72. Marketers and
managers around the world debated whether Nike’s risk would pay off financially. Later, the company’s
stock was upgraded, and in mid-September, it closed at more than $85 per share – an all-time high. The
expected drop in sales in response to the risky move did not materialize; online sales increased 31% over
the first few days following the ad73. Financial analysts were impressed; one praised Nike’s “courageous”
stand “in support of a social issue where few (if any) companies have of late”74.

Marketing experts discussed the appropriateness of Nike’s bold move using the concepts of brand purpose
and brand activism. Brand purpose is the notion that a brand stands for something bigger and more than
the products or services it sells. Brand activism is an extension of purpose into action. When a brand’s
purpose includes or implicates a highly relevant social or environmental issue, the company’s actions in
pursuit of that purpose begin to take the form of brand activism. Nike’s decision to engage Kaepernick,
and, as a result, with social issues related to freedom to protest and racial injustice, involved risk. But it also
fit with consumer expectations for brands to address social problems in ways that align with their personal
values75. David Armano, contributor to AdWeek, and global strategy director for DJE Holdings, commented,

So, should brands “Just Do It” when it comes to taking a stand? The better question for marketers
is: Can a brand be purpose-led without activism? The answer is yes, but the caveat is that the brand
must know its place in the world, strive to do something bigger than itself and take action that is
consistent with the values it puts forth. Standing for something bigger than yourself doesn’t mean
inserting yourself into every cultural debate or ones that quickly become politicized. Brands that
take bold actions venture into this territory, knowing that they’re not going to be for everybody,
and stand at the ready to play a leading role in the face of cultural divide. It does come with risk
but also with potential reward, depending on the motivation and authenticity of the brand’s words
and deeds76.

Market research revealed that brand purpose and activism appeared to be increasingly important for
American consumers and companies. A Unilever study found that “CorpSumers” comprise about one-third
of the market. This segment believes companies should take a stand on social issues, and reports being very
Page 8

likely to purchase from a company that takes a stand77. A 2017 Cone Communications study found that
92% of consumers report having a more positive image of a company that supports a social or
environmental issue, and 78% believe that companies must have a positive impact on society 78. Further,
Spotlight on CSR revealed that brand purpose impacts consumer behavior; 50% of consumers have started
or stopped buying a brand based on that brand’s position on a social or controversial issue79.

Some companies had faced consumer backlash after focusing on social issues. For example, Starbucks’
2015 “Race Together” campaign was intended to start a conversation about race and equality, but backfired
as it was perceived negatively by consumers and hijacked on social media80. In other instances, brand
activism was embraced. In October, 2018, shortly before the US mid-term elections, Ben & Jerry’s released
an ice cream flavor called Pecan Resist. The copy stated:

Together, Pecan Resist! Alongside all those nutty chunks, this pint packs a powerful message under
its lid: together, we can build a more just and equitable tomorrow. We can peacefully resist the
Trump administration’s regressive and discriminatory policies and build a future that values
inclusivity, equality, and justice for people of color, women, the LGBTQ community, refugees, and
immigrants. Pecan Resist supports four organizations working on the front lines of the peaceful
resistance,” including the Women’s March, Honor the Earth, Neta, and Color of Change81.

Initial consumer response to the strategically-timed product release was positive, but the long term impact
on the brand remained uncertain.

WHAT NEXT FOR NIKE?

How should Nike proceed in 2019? While Nike would continue to provide NFL jerseys until 2028, Nike
would stop producing licensed merchandise for the NFL in 2020. This meant the NFL was less
consequential to Nike’s bottom line in the coming years, which could present some opportunities.

Many factors warranted consideration. Consumer culture was changing, and consumers increasingly
preferred brands to have a purpose and “stand for something.” However, “standing for something” in
relation to a politically polarizing issue was controversial among consumers and managers. Should Nike
double down on the issues related to racial injustice? If so, what would that look like, and what risks would
it entail? A second option involved Nike addressing other social issues beyond race and gender. A third
option involved a retreat campaign, perhaps temporarily, to politically-neutral territory. One form of risk
involved in brand activism is that the brand can be perceived as seeking financial gain. Thus, Nike’s actions
must continue to be regarded as authentic. They should be consistent with the company’s purpose as
outlined in Nike’s 2018 letter to shareholders:

Ultimately, our momentum comes down to something bigger than any single product, service or
technology. In this time of relentless change, our success is grounded in staying true to our purpose:
using the power of sport to move the world forward.82

Nike’s plans need to address whether and how Kaepernick would continue to be on Nike’s sponsorship
roster. Kaepernick had become an icon and celebrity for many consumers. Following the release of the
Nike ad, he embarked on plans to write a book, develop a comedy series, and do a speaking tour 83. In fall
2018, he participated in workshops to teach young adults about their rights. This suggested that many
American consumers may want to engage further with Kaepernick and his activism.

Further, the plan for 2019 needed to be built on a solid understanding of the current social and political
climate in the US and more globally. Nike had an opportunity to pursue activism if it aligned with Nike’s
mission and purpose. So, the question remained: what next?
Page 9

EXHIBIT 1: KAEPERNICK’S RELEASE OF PRINT AD ON TWITTER

Kaepernick, Colin (@Kaepernick7). “Believe in something. Even if it means sacrificing everything.

#JustDoIt” September 3, 2018, 12:20pm. https://twitter.com/Kaepernick7/status/1036695513251434498
Page 10

EXHIBIT 2: SELECTED FINANICAL STATEMENTS

NIKE, Inc.
SUPPLEMENTAL NIKE BRAND REVENUE DETAILS
Source: NIKE, Inc. 2018 Form 10-K

TWELVE MONTHS %Change

ENDED % Excluding
Currency
(Dollars in millions) 5/31/2018 5/31/201712 Change Changes3
NIKE Brand Revenues by:
Sales to Wholesale Customers $23,969 $23,078 4% 2%
Sales through NIKE Direct 10,428 9,082 15% 12%
Global Brand Divisions4 88 73 21% 12%
TOTAL NIKE BRAND REVENUES $34,485 $32,233 7% 5%

NIKE Brand Revenues on a Wholesale Equivalent Basis5

Sales to Wholesale Customers $23,969 $23,078 4% 2%
Sales from our Wholesale Operations to NIKE Direct
Operations 6,332 5,616 13% 10%
TOTAL NIKE BRAND WHOLESALE EQUIVALENT
REVENUES $30,301 $28,694 6% 4%

NIKE Brand Wholesale Equivalent Revenues by:5

Men’s $17,114 $16,041 7% 5%
Women’s 6,915 4% 2%
Young Athletes 4,906 1% -1%
Others6 1,366 17% 13%
TOTAL NIKE BRAND WHOLESALE EQUIVALENT
REVENUES $30,301 $28,694 6% 4%

NIKE Brand Wholesale Equivalent Revenues by:5

Running $5,198 $4,860 7% 5%
NIKE Basketball 1,494 1,292 16% 14%
Jordan Brand 2,856 3,098 -8% -9%
Football (Soccer) 2,146 1,984 8% 5%
Training 3,126 3,080 1% 0%
Sportswear 10,018 8,988 11% 8%
Others7 5,463 5,392 1% 0%
TOTAL NIKE BRAND WHOLESALE EQUIVALENT
REVENUES $30,301 $28,694 6% 4%

2
Certain prior year amounts have been reclassified to conform to fiscal 2018 presentation. These changes had no impact on previously reported
consolidated results of operations or shareholders’ equity.
3
The percent change has been calculated using actual exchange rates in use during the comparative prior year period to enhance the visibility of
the underlying business trends by excluding the impact of translation arising from foreign currency exchange rate fluctuations, which is
considered a non-GAAP financial measure.
4
Global Brand Divisions revenues are primarily attributable to NIKE Brand licensing businesses that are not part of a geographic operating
segment.
5
References to NIKE Brand wholesale equivalent revenues, which are considered non-GAAP financial measures, are intended to provide context
as to the total size of the Company’s NIKE Brand market footprint if it had no NIKE Direct operations. NIKE Brand wholesale equivalent
revenues consist of 1) sales to external wholesale customers and 2) internal sales from the Company’s wholesale operations to its NIKE Direct
operations which are charged at prices that are comparable to prices charged to external wholesale customers.
6
Others include all unisex products, equipment and other products not allocated to Men’s, Women’s and Young Athletes’, as well as certain
adjustments that are not allocated to products designated by gender or age.
7
Others include all other categories and certain adjustments that are not allocated at the category level.
Page 11

EXHIBIT 2: SELECTED FINANICAL STATEMENTS (CONTINUED)

NIKE, Inc.
CONSOLIDATED BALANCE SHEETS
Source: NIKE, Inc. 2018 Form 10-K

May 31,
(Dollars in millions) 2018 2017
ASSETS
Current Assets:
Cash and equivalents $ 4,249 $ 3,808
Short-term investments 996 2,371
Accounts receivable, net 3,498 3,677
Inventories 5,261 5,055
Prepaid expenses and other current assets 1,130 1,150
Total current assets 15,134 16,061
Property, plant and equipment, net 4,454 3,989
Identifiable intangible assets, net 285 283
Goodwill 154 139
Deferred income taxes and other assets 2,509 2,787
TOTAL ASSETS $ 22,536 $ 23,259
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current portion of long-term debt $ 6 $ 6
Notes payable 336 325
Accounts payable 2,279 2,048
Accrued liabilities 3,269 3,011
Income taxes payable 150 84
Total current liabilities 6,040 5,474
Long-term debt 3,468 3,471
Deferred income taxes and other liabilities 3,216 1,907
Commitments and contingencies (Note 15)
Redeemable preferred stock -- --
Shareholders’ equity:
Common stock at stated value:
Class A convertible – 329 and 329 shares outstanding -- --
Class B – 1,272 and 1,314 shares outstanding 3 3
Capital in excess of stated value 6,384 5,710
Accumulated other comprehensive loss (92) (213)
Retained earnings 3,517 6,907
Total shareholders’ equity 9,812 12,407
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 22,536 $ 23,259

The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
Page 12

EXHIBIT 3: SAMPLE PRINT ADS FROM 2019 “JUST DO IT” ANNIVERSARY CAMPAIGN84
Page 13

1 Adams, Dwight. “NFL players kneeling in protest during the anthem has divided the nation. What we know.”
Indianapolis Star, August 23, 2018. Available: https://www.indystar.com/story/news/2018/08/23/nfl-protests-
kneeling-during-national-anthem-continue-how-started-what-players-doing-now/1065470002/
2 Adams, Dwight, “NFL players kneeling in protest during the anthem has divided the nation. What we know.”

Indianapolis Star, Aug 23, 2018. Available https://www.indystar.com/story/news/2018/08/23/nfl-protests-kneeling-

during-national-anthem-continue-how-started-what-players-doing-now/1065470002/
3 Brandt, Andrew, ”It’s Clear Now: Colin Kaepernick Will Not Be Signed” Sports Illustrated, April 17, 2018, Available:

https://www.si.com/nfl/2018/04/17/colin-kaepernick-free-agency-dez-bryant-released-cowboys-contract
4 BBC Sport, ”Colin Kaepernick: Nike suffers #justburnit backlash over advertising campaign.” September 4, 2018.
5 Reyes, Lorenzo. ”President Trump: Nike’s Colin Kaepernick ad sends ’terrible message’” USA Today, September 4,

2018.
6 Wells, Adam. ”Donald Trump Rips Nike for Colin Kaepernick Ad, Calls NFL’Hard to Watch’” Bleacher Report,

September 5, 2018.
7 https://about.nike.com
8 Friedman, Vanessa (2015), “Nike is the most valuable apparel brand in the world,” The New York Times, 29 May

2015.
9 Nike Letter to Shareholders, 24 July 2018. Available at nike.com.
10 Badenhausen, Kurt (2018), “The World’s Most Valuable Brands 2018,” Forbes, 23 May 2018,

www.forbes.com/sites/kurtbadenhausen/2018/05/23/the-worlds-most-valuable-brands-2018/#2030b2d8610c
11
Armano, David (2018), “With Nike’s Longstanding Brand Purpose, Featuring Colin Kaepernick Made Perfect
Sense,” AdWeek, 5 September 2018, www.adweek.com/brand-marketing/with-nikes-longstanding-brand-purpose-
featuring-colin-kaepernick-made-perfect-sense/
12 Schultz, E.J., and Adrienne Pasquarelli (2018), “Nike, Riding a Hot Streak Even Before Kaepernick Ad, Reports

Smoking Sales, AdAge, 25 September 2018. https://adage.com/article/cmo-strategy/nike-kaepernick-sales-

campaign/315057/
13 Nike Letter to Shareholders, 24 July 2018. Available at nike.com.
14 Townsend, Matthew (2018), “Nike Scandal Threatens Its Image with Women at Tumultuous Time,” Bloomberg, 22

March 2018. www.bloomberg.com/news/articles/2018-03-22/nike-scandal-threatens-its-image-with-women-at-

tumultuous-time
15 Coffee, Patrick (2018), “A Brief History of Nike Using Advertising to Address Social Issues,’” AdWeek, 4 September

2018, https://www.adweek.com/agencies/a-brief-history-of-nike-using-advertising-to-address-social-issues/
16 BBC News (2013), “Oscar Pistorius contract suspended by Nike,” 21 February 2013,

https://www.bbc.com/news/business-21530625
17 Beer, Jeff (2017), “Thirty years later, the story behind Nike’s iconic ‘Revolution,’” FastCompany, 31 March 2017,

www.fastcompany.com/40401379/thirty-years-later-the-story-behind-nikes-iconic-revolution
18Coffee, Patrick (2018), “A Brief History of Nike Using Advertising to Address Social Issues,’” AdWeek, 4 September

2018, https://www.adweek.com/agencies/a-brief-history-of-nike-using-advertising-to-address-social-issues/
19 Ibid.
20 Ibid.
21 Ibid.
22 Natividad, Angela (2017) “W+K Explains What Unites Its Powerful Nike Women Ads Running in Russia, Turkey

and the Middle East,” AdWeek, 8 March 2017, https://www.adweek.com/creativity/wk-explains-what-unites-its-

powerful-nike-women-ads-running-in-russia-turkey-and-the-middle-east/
23 Cresswell, Julie, Kevin Draper and Sapna Maheshwari (2018), “Nike Nearly Dropped Colin Kaepernick Before

Embracing Him,” The New York Times, 26 September 2018.

24 Statista, “National Football League (NFL) – Statistics & Facts. www.statista.com/topics/963/national-football-

league/
25 Norman, Jim. ”Football Still Americans’ Favorite Sport to Watch” news.gallup.com/poll/224864/football-americans-

favorite-sport-watch.aspx
26 Enright, Jenna (2017), “Study looks at common traits of NFL fans,” Quirk’s Media, 4 October 2017,

www.quirks.com/articles/study-looks-at-common-traits-of-nfl-fans
27 Norman, Jim. ”Football Still Americans’ Favorite Sport to Watch” news.gallup.com/poll/224864/football-americans-

favorite-sport-watch.aspx
28 Draper, Kevin, Julie Creswell, and Sapna Maheshwari (2018), “Nike Returns to Familiar Strategy with Kaepernick

Ad Campaign,” The New York Times, 4 September 2018.

29 YouGov (2018), “Colin Kaepernick More Popular Among Nike Customers than with the General Public,” YouGov, 5

September 2018, https://today.yougov.com/topics/politics/articles-reports/2018/09/05/colin-kaepernick-more-

popular-among-nike-customers
30 Pauwels, Koen (2018), “7 ways and 7 pics to evaluate Nike’s Kaepernick marketing campaign,” Smarter Marketing

with Better Results, 1 October 2018. https://analyticdashboards.wordpress.com/2018/10/01/7-ways-and-7-pics-to-

evaluate-nikes-kaepernick-marketing-campaign/
31 MarketWatch (2018), “Nike’s online sales jumped 31% after company unveiled Kaepernick campaign, data show,”

MarketWatch, 17 September 2018, www.marketwatch.com/story/nikes-online-sales-jumped-31-after-company-

unveiled-kaepernick-campaign-2018-09-07
Page 14

32 Ibid.
33 Draper, Kevin, Julie Creswell, and Sapna Maheshwari (2018), “Nike Returns to Familiar Strategy with Kaepernick
Ad Campaign,” The New York Times, 4 September 2018.
34 www.usnews.com/news/articles/2016-03-28/america-has-a-big-race-problem
35 www.bbc.com/news/world-us-canada-32400497

www.nytimes.com/interactive/2014/08/13/us/ferguson-missouri-town-under-siege-after-police-shooting.html
www.npr.org/sections/codeswitch/2018/07/31/631897758/a-look-back-at-trayvon-martins-death-and-the-movement-
it-inspired
36 Bates, Karen Grigsby (2018), “A Look Back at Trayvon Martin’s Death, and the Movement it Inspired,” NPR Code

Switch, 31 July 2018, www.npr.org/sections/codeswitch/2018/07/31/631897758/a-look-back-at-trayvon-martins-

death-and-the-movement-it-inspired
37 Seipel, Brooke (2017), “Under Armour CEO walks back support of Trump in full-page newspaper ad, The Hill, 15

February 2017. https://thehill.com/blogs/in-the-know/in-the-know/319621-under-armour-ceo-walks-back-support-of-

trump-in-full-page
38 Peterson, Hayley (2017), “Under Armour CEO ignites boycott threats after resigning from Trump council,” Business

Insider, 15 August 2017. www.businessinsider.com/under-armour-ceo-resignation-spurs-boycott-threats-2017-8

39 Parkinson, Hannah Jane (2016), “Does New Balance Really Support Trump?” The Guardian, 15 November 2016,

www.theguardian.com/fashion/2016/nov/15/does-new-balance-really-support-trump-trainers-trade-plans
40 Mettler, Katie (2016), “We Live in Crazy Times: Neo-Nazis have declared New Balance the ‘Official Shoes of White

People,’” The Washington Post, 15 November 2016, www.washingtonpost.com/news/morning-

mix/wp/2016/11/15/the-crazy-reason-neo-nazis-have-declared-new-balance-the-official-shoes-of-white-
people/?noredirect=on&utm_term=.842ab683e297
41 Ibid.
42 Cresswell, Julie, Kevin Draper and Sapna Maheshwari (2018), “Nike Nearly Dropped Colin Kaepernick Before

Embracing Him,” The New York Times, 26 September 2018.

43 Wyche, Steve (2016), “Colin Kaepernick explains why he sat during the national anthem,” NFL News, 27 August

2016, www.nfl.com/news/story/0ap3000000691077/article/colin-kaepernick-explains-protest-of-national-anthem
44 Ibid.
45 Ibid.
46 Belson, Ken (2018), “Colin Kaepernick’s Collusion Case Against the NFL Will Advance,” The New York Times, 30

August 2018.
47 Palmer, Shelly (2018), “Brand Bravery as a Go-To-Market Strategy,” AdAge, 17 September 2018,

https://adage.com/article/opinion/brand-bravery-a-market-strategy/314953/
48 Belson, Ken (2018), “Colin Kaepernick’s Collusion Case Against the NFL Will Advance,” The New York Times, 30

August 2018.
49 Associated Press (2017), “Kap among league’s most popular jerseys despite not being in league,” NBC Sports, 2

August 2017, https://www.nbcsports.com/bayarea/49ers/kap-among-leagues-most-popular-jerseys-despite-not-

being-league
50 Cresswell, Julie, Kevin Draper and Sapna Maheshwari (2018), “Nike Nearly Dropped Colin Kaepernick Before

Embracing Him,” The New York Times, 26 September 2018.

51 Ibid.
52 Ibid.
53 Rasool, Amira (2018), “Adidas says they’ll only work with Colin Kaepernick if he signs to an NFL team,” Teen

Vogue, 20 April 2018, www.teenvogue.com/story/adidas-will-only-work-with-colin-kaepernick-if-he-signs-to-an-nfl-

team?verso=true
54 Ibid.
55 Cresswell, Julie, Kevin Draper and Sapna Maheshwari (2018), “Nike Nearly Dropped Colin Kaepernick Before

Embracing Him,” The New York Times, 26 September 2018.

56 Zanger, Doug (2018), “Colin Kaepernick Gets the Call, Fronts Nike’s 30th Anniversary of ‘Just Do It,’” AdWeek, 3

September 2018, www.adweek.com/creativity/colin-kaepernick-gets-the-call-fronts-nikes-30th-anniversary-of-just-

do-it/
57 Zanger, Doug (2018), “Nike’s New Colin Kaepernick Spot Inspires You to Pursue Your Craziest Dreams,” AdWeek,

5 September 2018, www.adweek.com/creativity/nikes-new-colin-kaepernick-spot-inspires-you-to-pursue-your-

craziest-dreams/
58 Gaines, Cork. ”Nike had the perfect response to French Open’s controversial decision to ban Serena Williams’

catsuit that made her feel like a ’warrior princess.’” Business Insider, August 25, 2018. Available:
https://www.businessinsider.com/nike-response-french-open-ban-serena-williams-catsuit-2018-8
59 Zanger, Doug (2018), “Nike’s New Colin Kaepernick Spot Inspires You to Pursue Your Craziest Dreams,” AdWeek,

5 September 2018, www.adweek.com/creativity/nikes-new-colin-kaepernick-spot-inspires-you-to-pursue-your-

craziest-dreams/
60 Mesh, Aaron (2018), “Portland Ad Agency Wieden + Kennedy Reportedly Pressured Nike to Use Colin Kaepernick

in Advertising,” Willamette Week, 28 September 2018, www.wweek.com/news/business/2018/09/28/portland-ad-

agency-wieden-kennedy-reportedly-pressured-nike-to-use-colin-kaepernick-in-advertising/
61 Morning Consult (2018), “Watch Nearly 2,000 Consumers React in Real-Time to Nike’s Kaepernick Commercial,”

https://morningconsult.com/form/nike-dial-test/
 Page 15

62 Biometric data includes data gathered from heart rate, brain waves, sweat glands, and/or eye-tracking.
63 Swant, Marty (2018), “How Nike’s Colin Kaepernick Ad Looks to Democrats and Republicans Based on
Neurscience,” AdWeek, 17 September 2018, www.adweek.com/digital/how-nikes-colin-kaepernick-ad-looks-to-
democrats-and-republicans-based-on-neuroscience/
64 Draper, Kevin, Julie Creswell, and Sapna Maheshwari (2018), “Nike Returns to Familiar Strategy with Kaepernick

Ad Campaign,” The New York Times, 4 September 2018.

65 Pauwels, Koen (2018), “7 ways and 7 pics to evaluate Nike’s Kaepernick marketing campaign,” Smarter Marketing

with Better Results, 1 October 2018. https://analyticdashboards.wordpress.com/2018/10/01/7-ways-and-7-pics-to-

evaluate-nikes-kaepernick-marketing-campaign/
66 Fay, Brad (2018), “Nike’s Kaepernick Campaign Turns Both Online and Offline Conversations Negative,”

EngagementLabs blog, 14 September 2018, https://blog.engagementlabs.com/nike-kaepernick-campaign-turns-

both-online-and-offline-conversations-negative
67 Pauwels, Koen (2018), “7 ways and 7 pics to evaluate Nike’s Kaepernick marketing campaign,” Smarter Marketing

with Better Results, 1 October 2018. https://analyticdashboards.wordpress.com/2018/10/01/7-ways-and-7-pics-to-

evaluate-nikes-kaepernick-marketing-campaign/
68 Travis, Clay (2018), “Why I’m Boycotting Nike: Get Woke and Go Broke,” USAToday, 4 September 2018,

www.usatoday.com/story/opinion/voices/2018/09/04/colin-kaepernick-ad-boycotting-nike-column/1189989002/
69 Ibid.
70 Singer, Matthew (2018), “Nike Unveils Colin Kaepernick as Face of New Ad Campaign, Causing Conservatives to

Burn Shoes in Protest,” Willamette Week, 3 September 2018, https://www.wweek.com/sports/2018/09/03/nike-

unveils-colin-kaepernick-as-face-of-new-ad-campaign-causing-conservatives-to-burn-shoes-in-protest/
71 Skiver, Kevin (2018), “The social justice issues that Colin and other professional athletes have raised deserve our

attention and action,” CBS Sports, 4 September 2018, https://www.cbssports.com/nfl/news/nfl-issues-statement-

on-colin-kaepernick-says-the-issues-raised-deserve-attention-and-action/
72 Draper, Kevin, Julie Creswell, and Sapna Maheshwari (2018), “Nike Returns to Familiar Strategy with Kaepernick

Ad Campaign,” The New York Times, 4 September 2018.

73 MarketWatch (2018), “Nike’s online sales jumped 31% after company unveiled Kaepernick campaign, data show,”

MarketWatch, 17 September 2018, www.marketwatch.com/story/nikes-online-sales-jumped-31-after-company-

unveiled-kaepernick-campaign-2018-09-07
74 Cresswell, Julie, Kevin Draper and Sapna Maheshwari (2018), “Nike Nearly Dropped Colin Kaepernick Before

Embracing Him,” The New York Times, 26 September 2018.

75 Armano, David (2018), “With Nike’s Longstanding Brand Purpose, Featuring Colin Kaepernick Made Perfect

Sense,” AdWeek, 5 September 2018, www.adweek.com/brand-marketing/with-nikes-longstanding-brand-purpose-

featuring-colin-kaepernick-made-perfect-sense/
76 Armano, David (2018), “With Nike’s Longstanding Brand Purpose, Featuring Colin Kaepernick Made Perfect

Sense,” AdWeek, 5 September 2018, www.adweek.com/brand-marketing/with-nikes-longstanding-brand-purpose-

featuring-colin-kaepernick-made-perfect-sense/
77 Palmer, Shelly (2018), “Brand Bravery as a Go-To-Market Strategy,” AdAge, 17 September 2018,

https://adage.com/article/opinion/brand-bravery-a-market-strategy/314953/
78 Ibid.
79 Ibid.
80 Morrison, Kimberlee (2015), “What went wrong with the Starbucks #RaceTogether campaign?” AdWeek, 25 March

2015, www.adweek.com/digital/starbucks-race-together-campaign/
81 https://www.benjerry.com/flavors/pecan-resist-ice-cream/pint
82 Nike Letter to Shareholders, 24 July 2018. Available at nike.com.
83 Cresswell, Julie, Kevin Draper and Sapna Maheshwari (2018), “Nike Nearly Dropped Colin Kaepernick Before

Embracing Him,” The New York Times, 26 September 2018.

84 Kish, Matthew (2018), “Here are the ads in Nike's 30th anniversary 'Just Do It' campaign,” Portland Business

Journal, 4 September 2018, https://www.bizjournals.com/portland/news/2018/09/04/ads-nike-30th-anniversary-just-

do-it-campaign.html

View publication stats