[dropcap size=big]I[/dropcap]n the first week of the NFL season, one of the biggest stories has once again centered on a player who is no longer on an active NFL roster.
Yes, Nike re-upped its endorsement deal with former San Francisco 49ers quarterback Colin Kaepernick, the player who kicked off a new movement of pro athletes speaking out about issues of social injustice, including by sitting or kneeling during the National Anthem. But in the case of Kaepernick and a former teammate of his, Eric Reid, the activism appears to have led to their blackballing from the league.
…the player who kicked off a new movement of pro athletes speaking out about issues of social injustice…
Over Labor Day weekend, the shoe giant released the campaign that started off with both a print ad – with the quarterback in front of the slogan “believe in something – even if it means sacrificing everything” – and a TV commercial, which debuted during the year’s first NFL game:
The ad is effective, if a bit derivative of Apple’s famous “Here’s to the Crazy Ones” spot, although this is hardly the first time a brand has gone to that particular well. The sentiments of the commercial itself, mostly involving setting high goals and following one’s dreams, are far from controversial.
Like with all things Kaepernick, the campaign led to a backlash from those intensely opposed to the quarterback’s message. This movement has been led by Clay Travis, the Fox Sports radio host who’s made it his mission to oppose any and all efforts of left-of-center political activism in the sports world. Travis went on to trash the campaign as “the dumbest move Nike has ever made in the history of its brand.”
This is the dumbest move @nike has ever made in the history of its brand. pic.twitter.com/KshvmdGajT
— Clay Travis (@ClayTravis) September 3, 2018
The opposition to Nike/Kaepernick soon coalesced around a handful of talking points: That in embracing Kaepernick, Nike was turning its back on the troops, veterans, police, or anyone else opposed to the idea that racial prejudice and police misconduct are worthy of public protest. That the decision to back Kaepernick caused Nike’s stock to tank, costing the company billions of dollars. And that the campaign resulted in large numbers of conservative Americans choosing to burn or otherwise destroy their Nike merchandise.
Every One of Those Assertions is Very, Very Wrong
As has been clear since it started two years ago, the protest by Kaepernick and other NFL players has nothing to do with insulting soldiers or veterans; it was a veteran, Green Beret Nate Boyer, who in fact encouraged Kaepernick to kneel during the anthem.
As for Nike’s stock? Yes, its stock dropped by two percent on the Monday after the Kaepernick campaign was announced which did, technically, cost the company’s market capitalization to drop a couple of billion dollars.
However, this is a rather stupid way to think about stock valuations, and most of those making that argument clearly don’t know the first thing about the stock market or how it works.
Yes, Nike’s stock dropped from $82.18 on August 31 to $79.60 on Sept. 4. That sounds like a pretty big drop, that really did cause Nike to lose billions off of its on-paper valuation.
…weeks after the dip, Nike’s stock… started to creep up again. It actually surged past its pre-Kaepernick level during the day on Tuesday…
Except look at the bigger picture. First of all, several of Nike’s competitors also saw drops the same day- not due to anything related to Kaepernick, but rather on Trump saber-rattling about tariffs.
But look beyond that, as that fluctuation was actually quite small. Nike’s stock, on January 1, traded at $63.49. It has gradually climbed throughout the year- despite an executive sexual harassment scandal in the spring- and even at its lowest level, post-Kaepernick, the stock price was off only a couple of dollars from its 52-week high of $83.68.
And then, in the weeks after the dip, Nike’s stock… started to creep up again. It actually surged past its pre-Kaepernick level during the day on Tuesday, making back whatever it lost in market cap. This may have come after reports that sales of Nike merchandise had surged 31 percent.
Here’s a year-to-date chart of Nike’s stock. The allegedly catastrophic decline the company suffered is there in the upper right-hand corner, right before the curl back upward.
As for Nike’s market cap, which lost $5 billion in the days after the Kaepernick announcement? As of Tuesday, it’s over $132 billion.
If Nike’s stock had dropped 25 percent in a single day on the Kaepernick news, that would be significant. The same would be true if Nike had announced quarterly earnings in which sales nosedived, or the company actually posted a quarterly loss in the billions, as a direct result of its Kaepernick campaign.
But that’s not what happened here. Stocks go up or down by 2 percent every single day, therefore gaining or losing billions in market cap, but there’s a reason nobody who follows the stock market closely uses “lost $5 billion in market cap since yesterday” as a viable term of analysis.
Nike's stock, which "tanked" and "lost billions in market cap value" after the Kaepernick announcement, is now at $83.19, less than a dollar off its yearly high. Year-to-date chart: pic.twitter.com/nqxFa1r5Ym
— Stephen Silver (@StephenSilver) September 11, 2018
Where There’s Smoke There’s Not Always Fire
As for the supposed surge of Nike owners burning or cutting up their products? There were exactly THREE viral videos or photos of people doing so. Leaving aside how ridiculous it is to destroy expensive sportswear that one has already paid for, there’s absolutely no evidence that the destruction of Nike gear has taken place on any significant scale. The number of people doing this was likely somewhere in the single digits.
I’m sympathetic to the arguments that Nike launched this campaign not out of pure altruism but rather to sell shoes, as they’re a corporation, one with an ample record of not-so-great stuff. I also understand the corollary that Kaepernick has in some way cheapened his message by associating it with a corporate brand. Even so, in the overall scheme of things, it was a better move for Nike to do this than to not do it.
It fits in with the turn of the company’s best known endorser, LeBron James, towards a more politically strident posture.
Nike’s most famous endorser, Michael Jordan, was notoriously reluctant to ever speak out about politics. Clay Travis published a book this year called “Republicans Buy Sneakers Too,” named after a supposed quote by Jordan, although it’s generally understood that Jordan probably never actually said it.
There’s no doubt that this has been a coup for Nike. We’re talking about Nike, culturally, in a way we haven’t in years. It fits in with the turn of the company’s best known endorser, LeBron James, towards a more politically strident posture. And the company bet, correctly, that the ethnically diverse millennial generation is more likely to consume Nike products than the sort of people who visibly bristle at the very mention of Colin Kaepernick’s name.