Nike: Get Woke, Go Broke?

Nike: Get Woke, Go Broke?

This morning, Australian Financial Review carried an interesting review of the Ben Affleck-Matt Damon movie “Air,” which is about Nike, Michael Jordan, and the partnership that changed the sportswear world forever.  In general, the odds are pretty slim that we’d ever bother with the review of a movie we have no intention of seeing in a financial paper we rarely read published in a country to which we’ve never been.  But the subhead on the review caught our attention: “Taken simply as entertainment, Air is a very slick proposition and possibly the greatest marketing gift ever handed to a multinational corporation, but lets the company off the hook big time.”

That piqued our interest, largely because we’ve been thinking a great deal about Nike lately and about how it is very much the quintessential “woke” American company.  Nike is big, powerful, successful, politically active, and shockingly hypocritical.  It embodies an absolutely bizarre blend of social phenomena that demonstrates the futility of some aspects of social investing and of the pushback against it and also proves that much of what passes for “social conscience” among corporations is entirely fabricated.

Nike supports endless social justice causes.  It advocates for leftist political issues.  It pays big bucks to Colin Kaepernick, the cop-hating, Castro-loving NFL quarterback who hasn’t actually been an NFL quarterback in years.  In short, it does everything that conservatives and opponents of politicized companies detest.  And just this week, it did so again:

Transgender influencer Dylan Mulvaney has secured another major partnership deal, days after Bud Light was criticized for partnering with her.

Mulvaney, an actor and comedian who has been documenting her transition across social media, is now a sports bra model for Nike. It comes after Bud Light partnered with Mulvaney for her Day 365 Of Girlhood video series. The beer brand was met with scorn and calls for a boycott from furious social media users.

American companies’ obsession with Mulvaney is incredibly weird.  This is even more the case for Nike, which has a rather sordid history of dealings with actual, real-life biological women:

Nike’s Oregon headquarters was — is? — an unsupervised playground for male executives who would get “sloppy drunk” and sexually harass female employees, according to four-year-old complaints just now unsealed as part of a lawsuit against the company.

The Beaverton, Oregon-based sports apparel company’s then-CEO, Mark Parker, apparently ignored his female employees’ complaints. Parker resigned as CEO in 2020 but still serves as Nike’s executive chairman.

The allegations include the company acting as a “boys club” where women are told to “dress sexier” and “show some skin.” Another woman claims to have walked “into a campus gym to find a senior staffer receiving oral sex from a female subordinate.”

A third complainant alleged that “sloppy drunk” executives pawed at women, or offered career mentoring over dinner but instead asked for sex….

Nike denies the allegations, and yet hundreds of employees “marched in protest of the company’s treatment of women at its headquarters” in 2019. That’s more than a year after the company failed to respond to the complaints unsealed this week.

One would think that a company with this history of egregious behavior toward women would be a little more circumspect about paying a biological male to advertise its women’s products.  But then, one would be wrong.  Circumspection is not a virtue that the Nike folks take seriously.  After all, this is a company that prattles on endlessly about “social justice” at home, even as it has benefitted for years from the government-enabled slavery of Chinese Uyghurs.  Nike knows what’s going on.  It knows about the Uyghurs.  It knows about its decades-long labor issues.  It knows about its hypocrisy.  It just doesn’t care.  Its executives are aware, but they just don’t give a damn.

To be honest, we’re not entirely sure that we blame them.  At present, there’s no reason for them to do so.  Sustainalytics gives Nike a solid “low” ESG-risk score.  The company has hundreds of beloved brand ambassadors throughout sports.  It has friends like Ben and Matt who make hagiographic movies about it.  And it has foolish opponents:

Initial reactions to Mulvaney’s latest deal appeal to have riled some social media users up in the same way.

“Meet NIKE WOMEN’S Newest Ambassador…a biological man,” wrote influencer Oli London, sharing Mulvaney’s video clip of her wearing Nike’s gear.

“Dylan Mulvaney is now being paid by Nike Women to promote sports bras—even though he’s a man! Another day, another company slapping all women in the face by mocking them and paying a man to take their place!” he wrote.

Author and Republican influencer Brigitte Gabriel replied to London’s tweet with fury. “This is disgusting. I am already boycotting Nike thankfully!” London agreed, suggesting people need to stop giving companies like Nike money. “Go Woke = Go Broke,” he wrote.

Go woke, go broke, you say?  Sounds great!  Unfortunately, it’s not true.

Nike is making a lasting impression with younger consumers.

That’s according to the 5,690 teens across 47 U.S. states who responded to Piper Sandler’s 45th semi-annual survey this spring. According to the results, Nike earned the top spots for footwear and apparel in the survey that ranked teen’s favorite brands and websites. Nike also earned the top spots for footwear and apparel preferences in Piper Sandler’s fall survey.

In apparel, Nike garnered 33% of the vote, followed by American Eagle at 7%, and Lululemon at 6%. These were followed by H&M (4%) and Shein (3%). Nike’s share of the vote was larger in footwear at 61%. Converse came next with 10% of the vote, followed by Adidas (6%), Vans (5%) and New Balance (2%)….

Nike also grew to the number two spot for teens’ top shopping websites.

This is the most dispiriting thing about Nike, its political crusades, and its hypocrisy: NONE of it is an accident.  The people who run Nike know exactly what they’re doing.  And it’s working.

John McDonald ends his AFR review of “Air” with an interesting commentary on Nike, its “wokeness,” and the reasons consumers don’t care:

Fortunately for this corporate giant, the world is much friendlier nowadays towards those businesses that make the odd caring gesture. In a world in which shopping is considered a hobby, an artform and a vindication of one’s ineluctable identity, those who provide the goods are to be celebrated rather than queried. When consumerism passes for culture, Just Do It, as the philosopher Roman Krznaric has written, has come to mean “Just Buy It”.

Oli London can suggest that “people need to stop giving companies like Nike money” all day, every day until the end of the world, and it won’t make a difference.  Nike has positioned itself well.  It is a “premium” brand that has captured the hearts and minds of young consumers.  Breaking its deleterious hold on the culture is going to take a lot more than chanting slogans and conducting boycotts. Even if conservative consumer boycotts were successful and sustainable – and they aren’t – Nike has positioned itself to turn that into a positive.  Like it or not, conservative public opposition serves only to embellish and enhance its appeal to young consumers.

In the end, Nike can only be changed by its shareholders.  Only engagement by the company’s owners with the its executives can possibly end its terrible labor practices and cynical social performances.  And that will take work.  A LOT of work.

Stephen Soukup
Stephen Soukup
[email protected]

Steve Soukup is the Vice President and Publisher of The Political Forum, an “independent research provider” that delivers research and consulting services to the institutional investment community, with an emphasis on economic, social, political, and geopolitical events that are likely to have an impact on the financial markets in the United States and abroad.