Knight on Tiger: Endorsements come with risk

Nike chairman and co-founder Phil Knight has long been regarded as one of the sports industry’s leading innovators, his influence stretching across the entire sports landscape. He was in New York last week being honored as the National Football Foundation’s 2009 Gold Medal recipient, the organization’s highest award. Before the ceremony, Knight, who wore blue jeans, a sport coat and black tennis shoes, spoke to SportsBusiness Journal staff writer Tripp Mickle at the Waldorf-Astoria.

How would you characterize the state of athlete endorsements right now?
Knight: It’s a market like other things and the market like other markets has gone down. When the economy comes back up, they’ll go back up.

Knight

When?
Knight: You tell me when the economy is going to get better and I’ll tell you right about that same time.

You look at someone like Tiger Woods and this episode of infidelity. Does this change the concept of building brands around athletes?
Knight: Not for us. It’s part of the game.

Does a company like Nike or another company run a risk in building brands around athletes?
Knight: There’s always a risk. One of the things we always try to do when we have a big endorsement is check out the character and the pattern of the individual. But you’re not going to get it right all the time, and if you’re going to be in the business you have to recognize that.

With Tiger, a person who was believed to be of more upstanding character beforehand, is it possible to check for everything?
Knight: Obviously, he was one we checked out and he came out clean, and I think he’s been really great. When his career is over, you’ll look back on these indiscretions as a minor blip, but the media is making a big deal out of it right now.

How has the business really changed with the arrival of a new competitor like Under Armour?
Knight: That’s always been part of the game. Even when we were a footwear business — now, we’re footwear, clothes and equipment — but in footwear we had 50 competitors every year and two or three of them would drop off and two or three of them would come in. There’s always someone like Reebok or Under Armour who can come in and make a big splash. It’s a very competitive business.

What’s the sports business story you’re watching most right now?
Knight: We’re looking at all sports all the time. I think the thing you’re looking at going into the new year is the World Cup.