Business Advertising

October 4, 2018

Nike and Colin Kaepernick: A Match Made in (Publicity) Heaven? Jonathan B. Lim

On a bright June day in Portland, Oregon, Robert Kleinhoff, CMO at Nike, was sitting at his desk, thinking. Nike was a globally renowned brand with a huge following and a long history of success, and things were running smoothly at the moment for the sportswear giant. Despite challenges from competitors such as adidas and Under Armour, Nike still held the top spot among sportswear brands and was still doing well overall (see exhibits 1-4 for key metrics). Yet despite this, something still felt stale. Nike was a corporate giant, but because of this rampant success, had it maybe lost its way? While “Just Do It” had entered everyday lingo as a way to empower would-be athletes to strive for their goals, it had lost some of its cache over the years, some of the spirit and heart that originally helped to define Nike’s ethos during the eighties and nineties. Maybe the problem was that while people said Just Do It, they didn’t really believe it – it didn’t grip them in the way it had thirty years earlier. How could Nike thus re-energize itself, and make people believe again in Nike’s power to make them Just Do It? Kleinhoff pondered this question in the brief moment of free time he had between meetings. Maybe if he could just find the right endorser, someone who embodied the ethos behind Just Do It, he could re-introduce a new generation to what the phrase really embodied. As he toyed with the idea in his mind, thinking through potential celebrity endorsers, one name popped up: Colin Kaepernick, ex- quarterback of the National Football League. Colin Kaepernick, and His Journey to the NFL Colin Rand Kaepernick was born on November 3rd, 1987, to an African- American father and a Caucasian mother, but was eventually adopted by Rick and Teresa Kaepernick, a couple from Milwaukee, Wisconsin, who eventually moved the family to Turlock, California. A standout high school athlete, Kaepernick excelled in basketball, baseball, and football, though football remained his true passion. Despite receiving more interest as a college baseball prospect, Kaepernick decided to pursue his dreams as a quarterback, accepting his only collegiate offer to the University of Nevada, a scholarship he earned despite initial hesitation from Chris Ault, Nevada’s head coach. A four-year starter at Nevada from 2007-2010, Kaepernick would continue to excel on the gridiron, leading his team to four straight bowl games and passing for 3,000+ yards (while rushing for 1,000+ more) during his senior year. Despite his collegiate success, scouts still had doubts over his viability as an NFL

quarterback. Yet despite these scouts’ concerns over his mechanics and accuracy, Kaepernick would be drafted in the second round of the 2011 NFL draft by the San Francisco 49ers. After serving as a backup during his rookie year in 2011, Kaepernick would eventually see playing time in 2012, eventually taking over the starting role from incumbent Alex Smith after posting big performances against the Chicago Bears and the New Orleans Saints. As a starter for the rest of the season, he would lead the 49ers to a surprise appearance in Super Bowl XLVII, narrowly losing to the Baltimore Ravens. However, his success did not prove sustainable; while he would start for two more years, he was not able to replicate the magic of 2012, and he would eventually lose his starting spot in 2015. The Kneel As the 2016 season rolled around, Kaepernick was firmly entrenched as a backup, with his success a distant memory. Yet despite this, he found a way to garner headlines for a very different reason. During the third game of the preseason, Kaepernick was spotted sitting on the bench during the National Anthem, an unusual gesture. Most athletes usually choose to stand during the anthem as a sign of respect, and even though there were no official rules against sitting, it was seen as a major taboo. When queried for the reason behind his actions, Kaepernick stated that “I am not going to stand up to show pride in a flag for a country that oppresses black people and people of color. To me, this is bigger than football and it would be selfish on my part to look the other way. There are bodies in the street and people getting paid leave and getting away with murder.” Kaepernick eventually decided to kneel instead during the fourth preseason game (see exhibit 5), after discussing with military veterans on how to best honor the troops while still shedding light on the rampant issue of racism. Yet despite this, Kaepernick’s actions had lit a clear match in the NFL. The issue divided fans, with some agreeing with Kaepernick’s actions as a means to shed light on an important issue, while some seeing it as fundamental disrespect against the country which had allowed him to find success as an NFL quarterback. While the NFL commissioner, Roger Goodell, and the NFL owners surely hoped the issue would subside after a few games, it did not; numerous other NFL players began to follow Kaepernick’s lead and knelt during the anthem, thus stoking the flames even further as fans continued to argue over the appropriateness of such behavior (see exhibits 6-7). Yet while many other players began to finally assert their opinions on the matter of racism, Kaepernick himself continued to be the central figure in this debate. His donning of “police pig” socks only further infuriated those who thought he was willfully disrespecting authority, while his donation of $1 million to various charities gave his supporters a stronger argument for the correctness of his actions. Kaepernick was even honored for this stance by major media

outlets such as GQ, being named its 2017 Citizen of the Year, and Time Magazine, being honored as its 2018 Person of the Year. On the football side of things, Kaepernick would eventually leave the 49ers in 2016 to pursue a starting job elsewhere. However, he was not brought in for visits by any other team, despite his starting experience and natural talent. Even after demonstrating his willingness to serve as a backup and to stop kneeling for the anthem, Kaepernick still found himself without a job, which continues to the present day. Kaepernick and his supporters believed the NFL had officially “blackballed” him. While general managers kept pointing to his lack of fit with their systems, Kaepernick believed this was only a side issue, and he eventually filed a grievance against the NFL in 2017, alleging that the owners had colluded to keep him from ever playing again. The NFL sought to dismiss the lawsuit, but this motion was denied in August 2018, meaning that the case would go to trial. Racism in America When it comes to race relations, the United States has had an infamously poor track record. Whether it be the subjugation of Native Americans in the 1700s, the poor treatment of Asian immigrants in the 1800s, or the current day tensions with illegal immigrants (who predominantly hail from Latin America), the United States has had its fair share of missteps. Yet, its mistreatment of African Americans stands out, as the periods of slavery of the 1800s and the segregation of the 1900s remain two of the most troubling chapters in any textbook on American history. However, as time went on and these periods seemed to fade into the distant recesses of history, many began to feel that race relations were only improving, and that America was entering a period of “colorblindness” where racial issues were relics of a bygone era. Yet relations began to heat up once again during the late 2000s, as several incidents pointed to still-simmering racial tensions underneath a “colorblind” surface. On February 26, 2012, Trayvon Martin, a teenager, was shot and killed at night by a neighborhood watchman, George Zimmerman, who thought Martin was going to pull a gun on him. When Zimmerman was eventually acquitted of wrongdoing, these festering tensions erupted to the surface. Widespread protests were organized in Martin’s home state of Florida, and many professional athletes such as Carmelo Anthony and Dwyane Wade even voiced their support for Martin. While supporters of Martin took to the streets, these protests only served to anger Zimmerman’s supporters even more, as many stores were looted and destroyed during the protests. The nation was thus divided over whether the Martin shooting was racially motivated, and whether Zimmerman was right to pull the trigger, even if it was in perceived self-defense. Just as this issue seemed to reach its conclusion, the deaths of other African Americans over similar issues continued to push racial tensions back to the forefront of national consciousness. Notably, the 2014 shooting of teenager Michael Brown in Ferguson, Missouri, by a police officer alleging that Brown had attacked him, stirred up further riots and protests in Ferguson and across the nation. The catchphrase, “Hands up, Don’t shoot!” was coined as a result, and became the mantra of a movement that sought to shed further light on police

brutality. However, the killing of two NYPD officers later in 2014 by a gunman seeking revenge for the deaths of Brown and others only served to dump further fuel onto the fire, giving support to those who believed that law enforcement was justified in trying to defend itself in these various situations. The death of Brown’s friend, Tyrone Harris, one year later stoked further public outcry, but the Columbia Police Officers’ Association retaliated by christening a “Darren Wilson Day,” in honor of the police officer who argued that he was just trying to defend himself. To those in law enforcement, these protests had grown increasingly out of hand, and even violent, and officers decried how the general public did not seem to understand the difficulty of enforcing the law under situations of great ambiguity and risk.

As other shootings popped up into the national consciousness, the “Black Lives Matter” movement emerged as a way to shed light on the problem of police brutality, especially towards African Americans. However, it also revealed how deep racial tensions really were across the country, as the movement gained much backing from those who believed that the police should be held more accountable for their actions towards African Americans, but was vehemently opposed by those who believed “All Lives Matter,” and that a focus on African American issues was too narrow and maybe even self-serving.

The election of Donald Trump as president in 2016 only divided the country even more. Many felt that his election was an approval of his controversial hardline stance towards racial issues, and that it was an indication that much of America had had “enough.” It was seen as a backlash against a perceived mainstream bias towards depicting topics such as gun control and racism in an increasingly liberal light, and it expressed a certain anger that many, especially those in the Midwest and South, felt towards how their voices and opinions were being ignored by their neighbors on either coast. Trump has publicly opposed Kaepernick’s kneeling on many occasions, saying that “kneeling is not acceptable,” and has even been suspected of pressuring the NFL to take a harder stance towards protesters. While no major racial incident has emerged under Trump’s watch, the nation continues to remain as divided as ever before. Conclusion Kleinhoff had to consider all of these issues as he thought about the viability of Kaepernick as a brand endorser. Furthermore, sports fans were known to be an unruly, passionate sort. If they burned LeBron James jerseys when James’ greatest controversy was leaving the Cavaliers, then what would they do when they saw that Kaepernick was the new face of Nike? Was it worth alienating a potentially large segment of consumers whose business Nike very much enjoyed? Should Nike take the Michael Jordan stance (“Even Republicans buy sneakers”), a reference to Jordan’s quip when asked why he remained silent on political issues? Was it wise to stray from Nike’s tradition of using athletes who skirted controversy, such as Derek Jeter, Roger Federer, and Serena Williams? Kleinhoff had to think through these issues, and fast. A decision needed to be made, one way or another, and maybe he figured he needed to stop worrying and just do it.

Exhibit 1 Nike sales, 2013-2017 (in billions)

Exhibit 2 Brand equity: Nike (orange) vs. adidas (yellow), 2013-2014 (in billions)

Exhibit 3 Nike sales per region, 2017 % of sales West 23 Midwest 28 South 32 East 17 Exhibit 4 Nike sales per age, 2017 % of sales 13-20 18 20-30 34 30-50 27 50+ 21 Exhibit 5 Kaepernick kneeling during the national anthem

Exhibit 6 Views on kneeling during the national anthem, by region % in favor % against West 58 42 Midwest 30 70 South 39 61 East 63 37 Exhibit 7 Views on kneeling during the national anthem, by age % in favor % against 13-20 56 44 20-30 68 32 30-50 37 63 50+ 22 78