Nike’s problems with Ja Morant and Tom Sachs highlight the risks of endorsement

  • Curbed published a shocking story about Tom Sachs, a Nike partner, this week.
  • Nike endorser Ja Morant retired from basketball this month after a disturbing Washington Post story.
  • Retail and sports business experts said the recent scandals could reduce demand for deals.

On Monday, Curbed published a shocking exposé focusing on the sordid life of Tom Sachs, an artist, designer and Nike collaborator whose latest sneaker was released last month. The story marks the third time in recent months that a Nike partner has become a public relations nightmare overnight.

Sachs’ story, which included allegations of problematic behavior such as appearing on a Zoom call with female Nike employees in his underwear and essentially a cult, was published a month after Nike released its latest collaboration with Sachs. Dubbed the Boring Shoe, the shoe garnered a rare full-page New York Times ad and sold out in minutes. Nike’s previous collaborations with Sachs include sneakers selling for thousands of dollars on the secondary market.

But before Sachs’ allegations, there was trouble with Ja Morant. About a month after Nike released his long-awaited signature shoe, Morant retired from basketball following a bruising Washington Post story that included allegations he threatened a security guard and punched a teenager after a basketball game. According to ESPN, Morant is in counseling. And just months before the Sachs and Morant controversies, Nike ended its partnership with NBA star Kyrie Irving after he shared an anti-Semitic video on social media. Irving has since apologized.

Of course, Nike is not alone in its problems with sponsors and partners. Adidas continues to deal with the fallout from its split with Ye, formerly known as Kanye West, after the artist repeatedly made anti-Semitic comments.

Nike partners and collaborators Ja Morant, Tom Sachs and Kyrie Irving,

Current and former Nike collaborators Ja Morant, Tom Sachs and Kyrie Irving,

Justin Ford/Getty Images, Chris Coduto/Getty Images, Christian Charisius/dpa Getty Images

Retail and sports business experts said the flurry of endorsement issues is the latest reminder of the perils of celebrity partnerships and could reduce brand appetite for them. However, they said the deals would not disappear given the overwhelming success of a handful of partnerships.

The big risks in celebrity deals

Nike did not immediately return a call seeking comment. In a statement to New York magazine, which publishes Curbed, a Sachs spokesperson said, in part, “Tom Sachs Studio believes that all employees should feel safe and secure in the workplace and is committed to upholding those values.” .

These are not new problems. While companies work with celebrities, some endorsement deals have fallen apart, said Coresight Research CEO and founder Deborah Weinswig.

“I wasn’t always a fan of celebrity deals,” Weinswig told Insider. “You need that halo, but don’t bet the ranch on an athlete.”

Weinswig said companies should diversify who they work with to “spread the risk.” He also said brands should tell more stories about employees and amateur “ambassadors” using their products, which can be more authentic than a professional athlete endorsing a product in exchange for millions of dollars.

“It has to be a mix of your own employees and celebrities,” he told Insider. “Each brand will find its own balance. This is the right model for the future.”

Nike collaborations with Tom Sachs include the highly collectible 2012

Nike’s collaborations with Tom Sachs include the highly collectible 2012 “Nikecraft Mars Yard” shoes.

Ted Shaffrey/AP

Hitha Herzog, chief retail analyst for Doneger Tobe, said endorsement deals have become more complex and problematic, in part because of the added visibility afforded by social media.

Morant’s mistakes include broadcasting himself holding a gun on Instagram Live. He immediately apologized.

“What brands don’t do well is control who they work with,” he told Insider. “You don’t just align with what two people do when it comes to business,” he said. “In 2023, we have a lot of transparency and there will be a lot more transparency in the future.”

Longtime sports industry analyst Matt Powell, who recently founded Spurwink River, said endorsement deals are “fraught with risk.”

“I thought for a while that brands were moving away from real celebrity endorsements,” he told Insider. “But there’s certainly been a lot of high-profile issues lately. It’s going to scare people away from doing more of it. The comeback isn’t there for brands today.”

Nike was built on endorsements

No one who spoke to Insider believes the deals and partnerships will end.

It has been part of the sportswear industry since the beginning. Nike and its competitors have hit the jackpot with some of these.

Nike co-founder Phil Knight knew the ins and outs of deals before he sold his first pair of running shoes. When he wrote the business plan for what became Nike in an MBA class at Stanford, Knight said he wanted Dyrol Burleson to stand out on the Oregon track to endorse his shoes.

“I have pointed out in this document that if Dyrol Burleson got into the business of selling track shoes or distributing track shoes in the state of Oregon, probably every kid in the state of Oregon would want to have those shoes,” Knight said. in a 1974 deposition.

A few endorsement deals were key elements of Nike’s successful rise to global prominence. Ben Affleck and Matt Damon will next month release a film about how Nike signed Michael Jordan, an endorsement deal that remains the gold standard.

Michael Jordan wearing the Air Jordan 1 in 1985.

Michael Jordan wears the Air Jordan 1 in 1985. Nike’s collaboration with Jordan is considered the gold standard.

AP Photo/G. Paul Burnett

Last month, Knight celebrated face-to-face with LeBron James after James set the NBA’s all-time scoring record, a magical moment for the Nike brand, whose longtime partnership with James includes having a building with the his name on her campus.

“You can make a case that LeBron is the face of Nike today and his reach is much bigger than his shoe sales. At the same time, people have to spend tons and tons of money and they don’t really get that performance,” Powell said. on Insider.

Aside from Jordan and James, Serena Williams (Nike) and Steph Curry and Tom Brady (both Under Armor) are among the few who have managed to cast a halo over an entire brand.

“We’re talking about a very, very small percentage of celebrities who get endorsement deals that have that halo,” Herzog said. “Nike would love to see that kind of halo effect with every athlete. That’s the dream. But there are very, very few who can create that magic.”

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