Nike takes a knee; supports Colin Kaepernick

Over the weekend, Nike decided to unveil its new ad campaign staring Colin Kaepernick.  The tag line is something about sacrificing everything for a principle, I suppose referencing the backlash Kaepernick has received over his kneeling for the national anthem stunt.

So, why did Nike do it?  Why did they tie themselves to this Dead on Arrival effort?

Well, maybe the management of Nike thought that this would help the bottom line.

Graph- Nike Profits

You see, Nike has been kind of blah between fiscal year (FY) 2015 and  2017, financially speaking, so maybe they are trying to shake things  up.

In FY 2018, the profit margin tanked.  Apparently, Nike paid 3  times the income tax in FY 2018 than it had paid in 2015, 2016, and  2017.  Why?  Well, it came about because Nike decided to re-patriate a  ton of money it had been holding overseas.  Because of the Trump tax  cuts, the company management decided to take a haircut on the money it  was offshoring.

OK, well and good, that's basic financial stuff.   But Nike has been having a sales slump in North America.  In fact,  almost all of Nike's sales growth has been driven by Greater China.  

And  this is a bit of problem, why isn’t the world’s richest market still  loving them some Nike? Americans are either over-saturated with the Nike  Just Do It gear, or they find UnderArmor and others cooler. So, we will  see in about six months' time whether or not throwing in with the  kneelers will help reverse that sales slump.

But I'm gonna guess not.

Just  as a reminder, the NFL viewership declined nearly 20% since Kaepernick  first took his knee in 2016.  I hope the same thing happens to Nike.


Sandra Peterson
Follow me on Twitter @janevonmises

Hong Kong, Hong Kong - AUGUST 23: Nike logo is seen outside of their retail store on August 23 2018 in Hong Kong, Hong Kong (Photo by Yu Chun Christopher Wong/S3studio/Getty Images)

Hong Kong, Hong Kong - AUGUST 23: Nike logo is seen outside of their retail store on August 23 2018 in Hong Kong, Hong Kong (Photo by Yu Chun Christopher Wong/S3studio/Getty Images)

The Pursuit of Happiness

The Pursuit of Happiness

Ken Webster Jr is a talk radio personality and producer from Houston, TX. He started his career in Chicago on the Mancow show and has since worked at dozens of radio stations all over the country. He’s currently the host of Pursuit of Happiness... Read more

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