Nike co-Founder Phil Knight appeared on CNBC’s “Mad Money” last night, saying that the company uses a "sharp pencil" when evaluating endorsement opportunities and if an athlete "doesn’t produce the sales, it's not worth it to us." Knight: "We pass on endorsements from time to time. There was a great soccer club in Europe, but we said it's too much, it's not worth it to us. So you can read about a lot of money for the endorsements, including Michael Jordan, but he’s absolutely worth it -- as is LeBron James.” Host Jim Cramer, in reference to competition from adidas and Under Armour, asked Knight, "Can Nike stay king with those competitors?” Knight: “Yes, and we will. We’ll compete very hard, and we have a lot of growth in our future and I'm very optimistic.” Knight said getting the NFL was a "big deal, but again the NFL wasn't cheap, and we used as sharp a pencil as we could and it panned out even better than what we thought it would." Knight also said the Olympics were "important" to Nike, and “especially to me, who is an old track guy.” Knight: “The Olympic Games are the pinnacle for any track and field competitor and it’s true for many of the other sports," but the "competitive arena is our fashion runway. ... That's where we show our stuff and show that it is the best product because it's being worn by the best athletes. So the Olympics are huge to us. It’s ultimate athletic contest and we're very optimistic on how we’re going to show in Rio.” Cramer asked about finding the next Jordan or next powerful endorser, with Knight saying, "It’s an art and you’re going to miss a lot of them. ... But when it all comes together just right, it creates magic."
JORDAN BEYOND HOOPS: Knight said of Jordan Brand outfitting Michigan football, “The whole industry has changed dramatically from the way it began when I got into it and the Jordan Brand has become a true brand and it stands for more than just basketball. So the first football team to wear the Jordan shoes is going to be the University of Michigan and we’re proud of that, and if you saw the claims from the transition when they moved from their old endorsement over to Nike on August 1, it was almost a riot, like the old days of Jordan shoes in the big cities.” Knight said of the popularity of the Jordan Brand, “There are a lot of people buying the brand that don't know even who Michael Jordan is.”
HOW MUCH IS TOO MUCH? Cramer asked, “Is footwear getting too expensive? We were looking online and we saw a $225 pair of Jordans on Finish Line. At a certain point, does that not fit with the persona of Nike that you created?" Knight: "Ultimately, we say around (Nike), the consumer decides, and he or she will tell us and that the important thing is that the shoes are comfortable and they perform and help you perform and when they're doing those things, they’re worth a lot to a person” (“Mad Money,” CNBC, 8/3).
