Nike’s $235.94 billion dollar market cap and dominance in the athletic apparel industry is owed in part to its endorsements with the world’s best athletes.[2][3] Historically, sponsorship contracts with the top names in sports have generated excellent brand exposure and profits for the brand. Nike’s partnerships are maintained, and thrive, on the ideal of greatness – the best apparel brand in the world is as great as the best athletes that represent it.
So, what happens when two of the world’s top athletes reject Nike’s tried and true sponsorship model? Allyson Felix and Simone Biles are two titans of sport that have walked (and sprinted and backflipped) away from Nike partnerships.
Felix, the most decorated American track and field athlete of all time, earned 11 total Olympic medals (including 7 golds) competing in five consecutive Olympic Games.[4] And Biles holds the most medals for a single gymnast in international competition (32 Olympic/world medals, including 4 Olympic golds).[5] In addition to athletic prowess, both Felix and Biles are also recognized for their activism, both being included on Time’s list of the 100 Most Influential People of 2021.[6]
Felix and Biles are exactly the type of athletes that Nike wants representing the Swoosh. And, they both did for several years.
However, in 2019, Felix slammed Nike in a bombshell op-ed for The New York Times. She revealed that following her contract expiration in December 2017, the brand offered her new contract with a 70% pay cut and refused to include any maternity protection clauses.[7] Felix shared that her starting a family came with accepting that “pregnancy can be ‘the kiss of death’” in a woman’s professional track career.[8] However, she was hopeful that her previous achievements and strong relationship with Nike would help to change the narrative and standard surrounding professional athletes who are mothers.[9]
Felix asked Nike to “contractually guarantee that [she] wouldn’t be punished if [she] didn’t perform at her best in the months surrounding childbirth,” to which they declined, thus marking the end of Felix’s tenure as a Nike athlete.[10] Starting a new chapter in July 2019, Felix became women-owned Athleta’s first-ever sponsored athlete when they announced a “wide-reaching partnership” with the American track legend, mother, and activist.[11] Part of Felix’s partnership included the development and launch of her own shoe brand, Saysh, which designs and manufactures shoes “specifically to fit the form of a female foot” rather than “using existing molds made for men’s feet” like many other brands, including Nike.[12] In her Saysh spikes, Felix won bronze in the individual 400m and ran the second leg to help Team USA win gold in the 4x400m relay in the Tokyo 2020 Olympics.[13]
For Biles, her six-year term with Nike ended in April 2021, just three months before the Tokyo Olympic Games.[14] Though never speaking out directly against Nike like Felix, Biles implied in interviews that she was eager to partner with a brand that “more closely reflects her values.”[15] Biles joined Felix and became Athleta’s second athlete. In an Instagram post announcing the sponsorship, Biles stated that Athleta is a company she “admired for how they support and recognize the strength of women.”[16]
Biles’s partnership “seeks to reimagine the traditional athletic sponsorship model” and will involve her collaboration with Athleta on a variety of initiatives, ranging from product design to the Gold Over America Tour (GOAT).[17] This Athleta-sponsored tour features Biles and other “all-star” American female gymnasts.[18] GOAT will travel to 35 cities in the fall of 2021 and is “a celebration of powerful female athletes who, together, are a united force proudly representing the sport of women’s gymnastics and inspiring the next generation of female athletes.”[19]
Felix and Biles’s Athleta partnerships reflect a shift in the sports sponsorship and apparel landscape. The rise of smaller brands with focused ideals is challenging Nike’s historic dominance, both with athlete partnerships and in sales within a highly competitive market. Where Nike has stumbled, Athleta has been quick to fill the gap.
In 2019, Nike’s women’s apparel represented less than 25 percent of the company’s total sales.[20] By launching yoga, plus-size, and maternity lines, Nike has attempted to expand its market presence.[21] But in 2021, women’s apparel continues to be cited as one of Nike’s biggest growth areas.[22]
In contrast, Athleta has seen a steady increase in sales since 2019, even during a challenging 2020 fiscal year in which most companies (including Nike) struggled.[23] Athleta was a rare apparel brand that saw sales soar during the COVID-19 pandemic.[24] Athleta’s market success parallels the timeline of signing Felix as the brand’s first partner in 2019, followed by Biles in 2021.
Felix and Biles rejected a big brand and leveraged their world class talents to demand partnerships that align with and support their values. This shows small market brands that they can secure the world’s best athletes through a more individualized approach. Nike will need to adjust accordingly.
References:
[2] Nike (NKE) - market capitalization. CompaniesMarketCap.com - companies ranked by market capitalization. (2021, September). Retrieved from https://companiesmarketcap.com/nike/marketcap/
[3] Britannica, T. Editors of Encyclopaedia (2019, December 16). Nike, Inc.. Encyclopedia Britannica. Retrieved from https://www.britannica.com/topic/Nike-Inc
[4] AlBaroudi, W. (2021, August 9). 2020 Tokyo Olympics top 10 Team USA Moments: Allyson Felix MAKES HISTORY, Caeleb DRESSEL dominates and more. CBSSports.com. Retrieved from https://www.cbssports.com/olympics/news/2020-tokyo-olympics-top-10-team-usa-moments-allyson-felix-makes-history-caeleb-dressel-dominates-and-more/
[5] Correa, C. (2021, August 3). How many Olympic medals does Biles have? The New York Times. Retrieved fromhttps://www.nytimes.com/2021/08/03/sports/olympics/simone-biles-medal-count.html
[6] Time. (2021, September 15). Time100: The most influential people of 2021. Time. Retrieved from https://time.com/collection/100-most-influential-people-2021/
[7] Felix, A., Crouse, L., Jensen, T., & Cantor, M. (2019, May 22). Allyson Felix: My OWN Nike Pregnancy Story. The New York Times. Retrieved from https://www.nytimes.com/2019/05/22/opinion/allyson-felix-pregnancy-nike.html
[8] Id.
[9] Id.
[10] Id.
[11] Athleta & Allyson FELIX join forces to empower women & girls through sports. Gap Inc. (2019, July 31). Retrieved from https://www.gapinc.com/de-de/articles/2019/07/athleta-allyson-felix-join-forces-to-empower-women
[12] Stych, A. (2021, October 26). Olympic star Allyson Felix opens first store for her shoe brand Saysh. Bizjournals.com. Retrieved from https://www.bizjournals.com/bizwomen/news/latest-news/2021/10/olympic-star-allyson-felix-first-store-saysh.html?page=all.
[13] International Olympic Committee. (2021, October 5). Allyson Felix by the numbers. Allyson Felix at Tokyo 2020 Olympics, 11 medals to make history. Retrieved, from https://olympics.com/en/news/athletics-allyson-felix-by-the-numbers.
[14] Draper, K. (2021, April 23). Simone Biles LEAVES Nike for a sponsor that focuses on women. The New York Times. Retrieved from https://www.nytimes.com/2021/04/23/sports/olympics/simone-biles-athleta-nike.html
[15] Radnofsky, L. (2021, April 23). Simone Biles leaves Nike for partnership with Athleta. The Wall Street Journal. Retrieved November 7, 2021, from https://www.wsj.com/articles/simone-biles-gymnastics-nike-athleta-11619140549.
[16] Biles, S. (2021, April 23). A T H L E T A, Let’s do this!! [Instagram video]. https://www.instagram.com/p/COAc979BdiN/
[17] Shacknai, G. (2021, April 23). Simone Biles LEAVES Nike for partnership With Female-Focused Athleta. Forbes. Retrieved from https://www.forbes.com/sites/gabbyshacknai/2021/04/23/simone-biles-leaves-nike-for-partnership-with-female-focused-athleta/?sh=1d7a9e757c19
[18] Athleta. (2021). About . Gold Over America Tour. Retrieved from https://www.goldoveramericatour.com/goat/about.html
[19] Id.
[20] Thomas, L. (2019, April 17). Nike's fix for boosting sales at home - women. CNBC. Retrieved from https://www.cnbc.com/2019/04/16/nikes-fix-for-boosting-sales-at-home-women.html
[21] Guardian News and Media. (2021, April 23). Olympic hero Simone biles jumping to Gap's athleta brand in blow to Nike. The Guardian. Retrieved from https://www.theguardian.com/sport/2021/apr/23/simone-biles-leaving-nike-athleta-deal
[22] Saibil, J. (2021, September 14). Will Nike hit this milestone in the First Quarter? The Motley Fool. Retrieved September 27, 2021, from https://www.fool.com/investing/2021/09/14/will-nike-hit-this-milestone-in-the-first-quarter/
[23] Tighe, D. (2021, August 3). Nike: Brand value worldwide 2021. Statista. Retrieved from https://www.statista.com/statistics/632210/nike-brand-value/
[24] Maheshwari, S. (2021, July 30). Why elite female athletes are turning away from major sponsors. The New York Times. Retrieved from https://www.nytimes.com/2021/07/30/business/female-athletes-sponsorship-apparel.html