League to bring U.S. back to velodrome AutoTrader.com renews with NBA Breaking Ground: NHRA looks to Paciolan Nike’s Converse sues 31 companies PowerBar narrows sponsorship focus From the Field of Information Management Roc Nation in acquisition mode End the one-size-fits-all approach How brands can reach the two Brazils Pete D’Alessandro
SBJ/Jan. 24-30, 2011/In DepthPrint All
Simon Dumont: The three-time X Games gold medalist from Maine is known for his amplitude in the halfpipe.
Tanner Hall: The Armada skis founder and Montana resident has won the X Games superpipe competition three times. » » »
Jen Hudak: The Connecticut-born winner at last year's X Games is known for her clean and solid riding style.
Sarah Burke: The Canadian freeskier has won three X Games golds and was named 2007's Best Female Action Sports Athlete at the ESPYs.
Bobby Brown: The Colorado-based teenager awed people during the 2010 X Games Big Air competition and followed it by winning gold in slopestyle. » » »
Tom Wallisch: A rising star in slopestyle, the East Coaster won X Games Europe and the Dew Tour last year.
Ashley Battersby: The Chicagoan won the 2008 U.S. Open Slopestyle competition and won the inaugural Dew Tour slopestyle.
Keri Herman: A member of Breckenridge's freeride team, the Montana-born skier has appeared on the Dew Tour podium.
Scotty Lago: The New Englander won bronze in the halfpipe at the Vancouver Games and is a favorite to win the 2011 X Games. » » »
Chas Guldemond: Known as a guy who can win any slopestyle competition he enters, the New Hampshire product was the 2008-09 Burton Global Open Series champion.
Jamie Anderson: The Lake Tahoe product is a two-time gold medalist at the X Games and one of the most talented young riders in the terrain park.
Hana Beaman: The three-time silver medalist at the X Games and Salt Lake City resident has the potential to represent the U.S. in Sochi.— Compiled by Tripp Mickle
Celebrated skateboarder Lance Mountain still remembers the call he made to Nike in 2006.
Mountain, 42 at the time, was more than two decades into a distinguished professional career punctuated by legendary video highlights and the creation of his own skateboard company, The Firm. He'd rarely — if ever — asked anyone for anything. And yet he picked up the phone and asked the team manager at Nike to sign him to their skateboard team.
Garrett Reynolds performs at the Nike 6.0 BMX Open.
"The thing they were doing was giving back," said Mountain, who joined Nike's skateboard team in the spring of 2007. "They were committed to implementing things I'd dreamed about and were willing to finance stuff because they could see it would pay off in the long term."
Nike's investments in skateboarding and other action sports, which began in earnest a decade ago, have already begun to pay off. Last year, the company announced that its action sports division — Nike 6.0 and Nike SB — was the fastest-growing category within Nike Brand. The company expects to double its current estimated business from that division of $390 million by 2015. Nike declined to make any of its executives available for this story.
Nike has deepened its ties in the industry by sponsoring events, including the Nike 6.0 Open held in December at Breckenridge Ski Resort in Colorado.
The company's success has been driven by its footwear lines. Since 2007, Nike's action sports footwear sales have increased 120 percent and its share of the action sports footwear segment has increased from 15.5 percent to 27.6 percent, according to SportsOneSource, a sporting goods market researcher.
"It's the magic of Nike," said Kevin Wulff, a former Nike executive. "It will be studied for years and years."
As much as it's a testament to the magic of Nike, it's also a testament to the company's perseverance. The company launched and cast aside a failed skate brand; it designed and abandoned step-in snowboard bindings; and it overcame a host of critics who derided it as a money-hungry corporation with campaigns like "Don't Do It."
Some industry insiders say the company succeeded in spite of itself. Others say it finally figured out the market. Regardless, Nike's success has changed the landscape of action sports and will play a heavy hand in writing the future of the industry.
"They're a leader and they will continue to be," said Circe Wallace, a Wasserman Media Group senior vice president. "The power of the swoosh is undeniable."
The commercial begins with a close-up of two runners speaking about their passion for running.
"All we want to do is run, man. Just run," the first runner says.
"Some people swim. Some people ride bikes. We choose to run," the second runner says. "That's just who we are."
As they run down a city sidewalk, a man hoists his briefcase in the air and calls them crazy, a woman shields her stroller and asks if they have to run past her, and a police officer hands them a ticket.
The commercial closes with the words "What if we treated all athletes the way we treat skateboarders?" fading into an orange swoosh.
Nike released the spot in 1997 in support of its initial push into action sports. The company wanted to be in the skate business and action sports for two reasons, Wulff said. First, they were fast-growing sports that were increasingly setting lifestyle and culture trends. Second, Nike was losing the youthful, counterculture edge that had defined it. The rebelliousness and attitude of action sports had the power to reinvigorate the swoosh.
"We saw the vision of what it could become," Wulff said. "Action sports made sense."
Nike released its first skate-specific shoes at the same time the ads debuted, but almost no one bought them. They failed to sell in part because Nike was perceived by many within the insular action sports world as a corporate outsider trying to cash in on the explosion in skateboard participation. They also failed to sell because the shoes didn't meet the technical expectations of skaters.
"The shoes were horrible," said Bryce Kanights, an accomplished skateboard photographer. "They didn't improve on the Jordan 1."
Nike had an accidental history in skateboarding. Skaters had worn the first Air Jordans in the 1980s because no skate shoe existed that provided the same level of ankle support and cushion. It had a chance to build on that history with its first skate-specific shoe, but failed.
Critics of Nike's push into action sports have used campaigns like this to portray Nike as money-hungry corporation.
"They were a threat," said Guisinger, who hasn't abandoned his campaign. "My fear was that if we acknowledged they were a skate company they could bypass the industry. But no one bought their products or gave them credibility."
Nike abandoned the skate shoe and tabled efforts to penetrate the skate industry. It tried to make inroads into the snowboarding industry through the All Conditions Gear (ACG) brand, releasing boots, bindings and apparel, but sales were average, and it dialed back the effort. In 2000, ACG also contracted a Southern California company to help it enter the surf business, but it abandoned the surf effort months after striking the deal.
Redefining its approach
The company took another stab at penetrating the skate market in 2001 by launching an independent skate company called Savier. It was independently run so that it could be nimble and deal directly with skate shops and small retailers. Savier attended its first Action Sports Retailers convention in 2001 and quietly grew into a $10 million to $12 million company, Wulff said.
As Savier was taking off, Nike created a skateboard division and named Sandy Bodecker the division's general manager. A respected Nike executive, Bodecker was the architect of the company's entrance into soccer and helped turn the sport into one of the company's top three categories with revenue of more than $1.5 billion.
That experience formed Bodecker's strategy for entering the skate and action sports industry. Rather than release a new skateboard shoe, the company tried to reclaim the brand's history in the sport by releasing a new version of the Air Jordan 1 shoes that skaters wore in the '80s.
"The DNA was there," said Vada Manager, a former Nike executive. "It needed to be retooled and better authenticated for the community."
The company released the retro shoes and renamed them the Nike Dunk SB (for skateboard) at skate shops in limited quantities. The move was a reversal from the big-box-retail approach the company took in the mid-1990s and gave the independent retailers that were the heartbeat of the skate industry an exclusive product that differentiated it from mall shops.
The timing of the strategy was ideal. It was 2002, the economy was still hurting after 9/11, and retail sales were down, but Nike's limited-release strategy helped skate shops secure new customers by creating a level of scarcity and hype that made the shoes popular with sneaker collectors.
"They brought the sneakerheads into the store," said Tommy Barger, owner of Covert Skate Shop in Orlando. "You were selling $120 shoes and a couple of shirts with it to a new customer. Everything was gravy."
The sales success of the Dunks gave Nike leverage with skate shops that it used to expand distribution, requiring skate shops that wanted Dunks to carry other Nike SB shoes, as well, independent retailers say.
Nike supported its SB line by signing respected skateboarders with core credibility such as Paul Rodriguez. It invested marketing dollars in grassroots events and local projects such as the development of Los Angeles-area
The company also attended the marquee retail trade show for action sports. SportsOneSource analyst Matt Powell said Nike had a reputation for never doing trade shows, so it caught him by surprise in the early 2000s when he first saw a Nike booth on the trade floor at the Action Sports Retailers show.
"I thought it was a joke," Powell said. "I walked up and asked, 'Is this really Nike?' That's how unbelievable it was they were there. I saw Sandy [Bodecker]. That's when I knew they were serious."
PETE DEMOS / SHAZAMM / ESPN IMAGES
Nike has boosted its credibility by signing core athletes such as skateboarder Paul Rodriguez (top) and BMX rider Dennis Enarson.
Nike SB began to grow organically, and as it did, the company pulled the plug on Savier. It replaced the skate brand with a multisport brand, Nike 6.0, which took its name from the six action sports of BMX, surfing, snowboarding, motocross, skiing and wakeboarding.
The creation of 6.0 allowed Nike to segment its action sports product lines, Powell said. It offered Nike SB exclusively to skate shops, initially upholding its promise to give those independent retailers something the malls didn't have. Then it took its 6.0 line to Pac Sun and other mall-based retailers.
At first, 6.0 was seen as a kids brand. Nike supported that perception by signing young athletes to its 6.0 team like 14-year-old BMX rider Garrett Reynolds, 15-year-old BMX rider Dennis Enarson and 16-year-old snowboarder Ellery Hollingsworth.
"They came in through the kids door," said Susan Izzo, the head of Mosaic Management, which represents Hollingsworth. "They grew with the kids. It wasn't a fake out but it was part of a five-year plan to grow from kids to top athletes."
Nike endeared itself to the athletes by treating them like top-flight pros. It built backyard ramps for Reynolds and Enarson, and underwrote a year of travel so its BMX team could film a video that included segments from far-flung locales throughout the world.
Most of those teenagers Nike backed grew up to become today's stars in their respective sports, and even ones like Enarson, who had some indecision about signing with a corporation like Nike that had no history in BMX, stand behind the company.
"All they have done is give to BMX," Enarson said in an e-mail.
Such endorsements from young stars who grew up on the brand team has favorably shaped consumer perception of the brand, said Bob Klein, a snowboard agent at Octagon.
"Even those haters who say, 'Those corporate scum bags,' can't argue with the way they support athletes," Klein said. "The perception is everyone [athlete] is stoked on it, so it's translated well to the consumer."
Just as Nike endeared itself to athletes by building top-notch ramps in their backyards, it did the same for action sports participants. During the 2010 Olympics, the company built a new feature at Vancouver's Mount Seymour resort and brought three members from the U.S. snowboarding team — Louie Vito, Elena Hight and Greg Bretz — and freeskier TJ Schiller to ride and ski with locals.
"The strategy has been grassroots," said Brad Lusky, Wasserman Media Group's executive vice president of action sports. "They didn't want to step in the space and buy their way in — even though they could."
Hitting its stride
Last August, Nike transformed Huntington Beach, Calif., into ground zero for its future in action sports. Its 6.0 brand sponsored a BMX event, its Converse subsidiary presented a skate competition, and its Hurley subsidiary titled the U.S. Open of Surfing.
Over nine days, more than 600,000 people turned out to watch contests, peruse the board shorts, shoes and apparel showcased in the three brands' 2,500-square-foot pavilions, and catch Weezer perform live on the beach.
In the eyes of many, the event was illustrative of Nike's new position as a leader in action sports and indicative of how the brand will approach the future.
"On a product level, they were showing the power of three to build all three brands," said James Leitz, a senior vice president and director of action sports at IMG, which owns the U.S. Open. "Nike challenged us to take our event to another level, and they've done that."
NIKE'S PUSH TO NO.1
Figures from SportsOneSource
show that Nike has quickly
increased its share of the action sports footwear category.
Brand % 2010 dollars* % 2007 dollars DC Shoes 27.96% 10.32% Nike 27.60% 15.47% Vans 24.27% 33.01% Adidas 5.78% 8.62% Etnies 3.65% 6.55% * 2010 is three weeks shy of the full year.Source: SportsOneSource
Nike's focus appears to be on aligning its action sports brands — 6.0, SB, Hurley and Converse — more closely together. It appears to be doing so with an eye toward two things — event ownership and retail expansion.
The company reportedly is looking to create an international competition similar to the U.S. Open of Surfing, according to action sports reporter Tiffany Montgomery. It has been in discussions with the Association of Surfing Professionals about a license for such an event.
Some industry experts believe that if Nike launches another event it could signal a shift of its marketing dollars from sponsoring existing events to owning events in the same way Red Bull has done in recent years.
"They did a fantastic job at the U.S. Open of bringing three brands together in a powerful way," said Issa Sawabini, a partner at Fuse Marketing. "Because they have such a broad breadth of brands, the best way to be efficient is to use that power of one model. It could be a great model for the future."
On the retail front, the company opened its first action sports store in Laguna Beach in 2009. The store, which is called Salvation, features 6.0, Hurley and Converse products. Many local skate shops fear that if Nike expands them nationwide it could hurt their business.
"We're definitely watching what they're doing," said Barger, of Orlando's Covert Skate Shop.
Sources familiar with Nike's action sports structure said the company is making internal changes that reflect the way it's aligning its business externally. The company is breaking down the silos between groups like 6.0 and SB to create a single action sports team.
The company's appetite for expanding its action sports product line has shown no sign of abating. Nike 6.0 launched ski and snowboard outerwear this season and debuted its first women's collection of footwear and apparel.
Nike signed surfer Julian Wilson to a deal valued at more than $1 million.
It also has expanded its athlete roster, signing deals with established and highly regarded core skaters like Eric Koston and Omar Salazar. It most recently signed surfer Julian Wilson to a deal valued at more than $1 million a year, and it's begun signing head-to-toe agreements with snowboarders like Hollingsworth and Mason Aguirre.
"Nike is very strategic and calculating," said Izzo, who represents Hollingsworth. "Now it has an air of confidence because of the athletes it's acquired. It will be interesting to see if they can tell each of those athletes' stories well and provide the caliber of product they require."
At the International Association of Skateboard Companies (IASC) conference last year, former DC Shoes President Nick Adcock told those gathered a cautionary tale of what Nike had done in soccer and golf. Both categories had deep traditions with strong established brands like Diadora and Wilson. But after Nike entered those sports, the other brands faded.
"Nike comes from the traditional mind-set," Adcock told conference attendees. "There's a scoreboard and there's a winner and loser. The action sports community is more lifestyle based and everyone is sort of surfing, skating and hanging out together.
"Now you've got someone who's prepared to hang out with you, but they want to be the best, and that's something that the industry needs to adjust their mind to. That's one of the challenges of them in the space."
Adcock and others believe that Nike's recent athlete signings and moves into events and retail are only the beginning of the company's next phase of action sports growth.
Some, like Adcock, expect Nike to eventually go into hard goods — surfboards, snowboards, skateboards and other products. Others, like Octagon's Klein, believe the company will stick to the apparel and footwear areas it knows well.
Regardless, they say, the world of action sports won't be the same.
Minutes after watching Shaun White clinch a gold medal in snowboard halfpipe in Vancouver with a crowd-captivating, Double McTwist 1260, International Olympic Committee sports director Christophe Dubi sent a clear signal about the potential addition of other action sports to future Olympics.
Snowboard slopestyle was already on the sports program for the first Youth Winter Olympics in 2012, Dubi said, and he expected snowboard slopestyle and ski halfpipe to be considered for Sochi 2014.
In the year since Dubi made that prediction, the IOC and International Ski Federation (FIS) have moved from merely considering adding those disciplines to practically guaranteeing the events will be added to the 2014 Olympics program.
The final decision will be made by IOC President Jacques Rogge, and the expectation at the U.S. Ski & Snowboard Association and throughout the action sports industry is that freeski and snowboard slopestyle will be part of the Sochi Games.
Simon Dumont is among a handful of freeski athletes with ties to non-endemic sponsors, but others could be exposed to marketers if freeski and slopestyle are added to the Olympics.
"This is something we're very excited and bullish about," said Andrew Judelson, USSA's chief revenue and marketing officer. "It is highly likely they will be included in the 2014 Olympics and beyond."
Athlete representatives and organizers of action sports events expect the addition of the sports to the Olympics to further legitimize them and usher in a new level of mainstream media exposure and mainstream sponsor opportunities for a host of athletes left behind years ago when the Olympic spotlight began to shine on halfpipe snowboarder stars like White and Hannah Teter.
"The sport (freeski) has been living without the Olympics, but this will open up doors," said Michael Spencer, a Utah-based sports agent who represents freeskier Simon Dumont.
Spencer said many freeski athletes already have six-figure incomes but acknowledged that only a handful have relationships with non-endemic sponsors. Dumont, who has deals with Target and Toyota, is one of the exceptions. Spencer anticipates that other freeskiers will have similar opportunities in the future as Olympic sponsors, such as Visa, which has a history of endorsing athletes competing in new sports disciplines, sign deals with freeskiers and snowboard slopestyle athletes.
What is freeski and slopestyle?
Freeskiing is a term used to describe twin-tip skiers who perform tricks in the halfpipe or terrain parks at ski slopes. If added to the Olympics, freeskiers will compete in halfpipe and slopestyle disciplines.
Slopestyle is a competitive event for snowboarders and freeskiers that showcases athletes performing tricks off terrain features such as jumps, rails and boxes. Judges score for style and difficulty.
Some companies already are stepping up their investment in freeskiing. After a long history of sponsoring mostly big mountain skiers, The North Face recently signed its first full park and pipe team and sponsored two park and pipe events. Other brands such as Nike and Oakley have followed suit.
"They've [The North Face] totally stepped up in a market where they've never been players before and they've done it in the right way," said Tom Yaps, an Evolution Management agent who represents freeskier Tanner Hall. "It's forced other companies to step up as well."
The USSA is positioning itself for a similar freeski windfall. The organization plans to create a new division, U.S. Freeskiing, which will operate independently the same way U.S. Snowboard and the U.S. Ski Team do. As a result, USSA will be able to sell separate sponsorship agreements to the U.S. Freeskiing team the same way that it does for its ski and snowboard teams.
Though no one doubts that new money and opportunities will flow into freeskiing and snowboarding slopestyle when they join the Olympics, some question if the disciplines will enjoy the groundbreaking moment that snowboarding did in Nagano in 1998 or Salt Lake in 2002.
Octagon Managing Director Peter Carlisle said snowboarding had the benefit of being a novelty when it joined. It was a pioneer that introduced the lifestyle and culture of action sports in a way freeskiing and slopestyle can't as followers. He also noted that Sochi will be a difficult Olympics for those sports to gain immediate exposure because of the time zone difference.
"I don't expect it to be the same game-changer for those sports in Sochi as we saw for snowboarding in Salt Lake," Carlisle said.
Yaps acknowledges that joining the Olympics may not transform those businesses immediately, but he's confident it will boost exposure and sponsor opportunities for athletes and events long term.
"We're ready to make this a reality," he said.
During the third week of January every year, Hotel Aspen owner Michael Brown reduces his room rates. It's part of a multiyear agreement he made with Aspen Ski Co. to help keep ESPN and the Winter X Games in Colorado.
The deal costs Brown some money, but he says it's worth it. Like most of Aspen's business community and many of its residents, he loves hosting the Winter X Games. He likes the spotlight it puts on Aspen, the spectators it brings to town, and the future visitors it attracts.
The tony ski town of Aspen has embraced the event.
"The X Games introduces Aspen to a type of customer that might not otherwise come here, and once they visit, they understand what an amazing place it is," Brown said. "I definitely would not want to see X Games go away. It's a great demand generator and a great exposure generator."
This year's Winter X Games will be the 10th hosted by Aspen. ESPN took its first event there in 2002, and it has returned every year since.
Though the initial pairing of the tony ski town and the youthful sports festival seemed odd, the partnership has benefited both parties. The long-term relationship has turned the X Games into a destination event, helping to increase attendance 132 percent from 36,300 spectators in 2002 to 84,100 spectators last year.
ESPN has used a similar strategy with the Summer X Games, which has remained in Los Angeles since 2003.
Aspen Ski Co. lured ESPN to Aspen with a 2001 offer to help underwrite the cost of the Winter X Games, which began in 1997 at Big Bear Lake in California. When ESPN got to Aspen it found a perfect venue. The town has four resorts, all owned by Aspen Ski Co., and ESPN was able to take over the base of Buttermilk Resort without disrupting skiing and snowboarding for residents in town.
Because it owns the other nearby resorts, Aspen Ski Co. is able to let ESPN begin setting up at Buttermilk several weeks before the event, giving it ample time to prepare everything from a halfpipe to television stands. It also helps secure discounted rates at hotels like the Hotel Aspen that help ESPN control the cost of the Winter X Games.
"To find an accommodating venue that can handle our needs from a production perspective and an event perspective and the number of people we bring to town is tricky," said Scott Guglielmino, ESPN senior vice president of programming and Global X. "Aspen's shown a lot of flexibility on the mountain and in the area itself, and that's a big part of its success."
TIME TO MOVE?
Panelists in the Turnkey Sports Poll were asked: 2011 will mark the 10th consecutive year that the Winter X Games have been held in Aspen, Colo. Future X Games should …
… rotate among different sites to expose the event to wider audiences 52%
… remain in Aspen. The continuity has helped the event grow 35%
Not sure / No response 13%
Source: Turnkey Sports Poll, December 2010. The survey, conducted by Turnkey Sports & Entertainment, covered more than 1,100 senior-level sports industry executives spanning professional and college sports.
The event also gives the resort more than 20 hours of national TV exposure and averages nearly 1 million viewers. As a result, awareness of the resort among millennials has increased, with 38 percent of respondents saying they were likely to visit Aspen/Snowmass, according to a study by Colorado-based Webb PR.
"We have an aging population and need to reach out to the next generation," said John Rigney, Aspen Ski Co.'s vice president, sales and events. "The power of ESPN works in our favor."
The relationship hasn't been without incident. The 2007 event was marred by 35 arrests and 521 calls for service. The community grew concerned about the strain the event put on its services and ESPN responded by canceling a series of concerts that were a major draw for out-of-town spectators.
"There were some concerns within the community about the breadth of this, but we addressed them and it's paid off," said Helen Klanderud, former Aspen mayor.
The current contract between ESPN and Aspen Ski Co. runs through 2012. Executives at both organizations expect to reach an agreement that keeps the Winter X Games there well into the future.
"We look at this property and ask, 'Do we think this property is on an upward trajectory?' Absolutely," Rigney said. "'Do we like who we work with at ESPN?' Yes we do. 'Do we get the right exposure for Aspen/Snowmass?' Of course. We'd like to continue this for all those reasons."
Guglielmino agreed, saying, "As long as they're interested in growing the event and we are as well, we're committed to staying there."
First gold medal, snowboard halfpipe, 2003
“The previous two years in pipe and slopestyle, Shaun was being judged as a kid. He was a novelty in the world of snowboarding because he’d started his career before he was even a teenager. It was hard for both professionals and judges to comprehend that he was clear and away the future of the sport and, in fact, was already taking over. In the years prior to 2003, everyone complained that he didn’t go big enough. He was a kid and he didn’t have man legs at all. That was the year his man legs arrived. He went bigger than he’d ever gone and he was going so high in transition. That was when his smoothness came to play. He ushered in the era that the only way you could win was to be flawless. He raised the bar. Thus began his Tony Hawk ascension to the top of action sports.”— Sal Masekela, ESPN X Games host
DAVE LEHL / EXPN.COM
Gold, snowboard halfpipe, 2007
“In the snowboarding community, we’d been watching Torah kill it, but she hadn’t quite yet pulled it all together. In 2006 at the Winter Olympics in Italy, she’d been killing it in practice and then she fell on her two runs. She’d been working on super technical runs before X Games the next year. She came in and put down a really technical run with tricks like the Switch Backside 5, that wasn’t a part of many women’s runs. No one’s doing that. Not even now. It was an original run that defined her career. She’s still the only one that does tricks in a different combination. She won the event in signature Torah Bright style: flawless and technical. She owned it.”— Tricia Byrnes, former X Games competitor
CHRISTIAN PONDELLA / ESPN IMAGES
Double backflip, snowmobile, best trick, 2009
“Before we came into 2008, Levi wasn’t even a freestyler. He was a racer. He started talking about doing this double backflip. Think about doing that on a 400-pound sled. It’s like backflipping your couch twice. The physics don’t work. ... His premise for this jump was to go high so he would have enough hang time to get two spins on the sled. He had the thing lined up, he warmed up the sled, and we started thinking, ‘He’s not taking a practice run. He’s going for it.’ He hits the ramp hard, and he’s upside down and already falling out of the sky before he’s finished the first flip. Watching it we were convinced there was no way that big lumbering mass would flip. We were just waiting for the impact. Somehow he lands it on the flat and bounces off the thing. Our hearts were in our throat until he runs up to the top and throws his hands up. He willed that thing to happen. It was incredible.”— Tes Sewell, X Games commentator