Michael Jordan, is widely regarded as the greatest basketball player of all time. He was also the athlete most responsible for transforming Nike from a shoe company into a global sports empire. He once said, "Republicans buy sneakers, too." Jordan made the comment during the 1990 U.S. Senate race in North Carolina, after his mother urged him to support Democratic candidate Harvey Gantt. Jordan confirmed that he made the statement jokingly on a team bus.
The line endured because it captured a basic business lesson. Companies benefit when everyone, regardless of their politics, buys their products. Nike stopped using common sense.
After spending much of the past decade injecting left-wing politics into its brand, Nike has now been removed from the Standard & Poor 100, ending a run of nearly 18 years in the blue-chip index. S&P Dow Jones announced the move last week and Nike will no longer trade on the Index after Sept. 21.
Nike isn't being kicked out of the Index because of questionable and dubious extremely partisan advertising. They're being kicked out because their stock value collapsed.
Politics didn't wipe out $200 billion by itself. But Nike chose to alienate customers while it was already losing ground everywhere else. The sports apparel giant reached a market value of $281 billion near its peak in November 2021. Nike shares recently closed at $38.10 giving the company a market capitalization of roughly $56.5 billion. The stock was about 79% below its November 2021 record of $179.10. More than $220 billion in market value had disappeared.
Being removed from the S&P 100 won't put Nike out of business. It will still sell billions of dollars of shoes and sign big-name athletes to sponsorship deals. But the titan of athletic wear is now worth about one-fifth of what it was five years ago and is no longer considered a blue-chip stock.
Consider Nike's attitude toward China with their behavior in the U.S.. Nike made Colin Kaepernick the face of its 30th anniversary "Just Do It" campaign after he refused to stand for the national anthem, saying he wouldn't show pride for a country that "oppresses Black people and people of color." Nike apparently thought it was a message worth putting on billboards across the nation.
In 2021 Nike faced blowback from Chinese consumers after the company expressed concern about reports of forced labor involving Uyghurs in Xinjiang. A few months later during an earnings call with then CEO John Donahoe, he made Nike's priorities clear.
"We're a brand of China and for China," he said. Pretty big contrast with their attitude in the U.S. Nike took a pretty hard stand concerning perceived oppression in the U.S.. But when their business in a communist country came under pressure, its CEO reminded everyone that Nike had been investing there for more than 40 years, operated thousands of stores and remained committed to the Chinese market.
Nike was apparently willing to present anti-American messaging at home while continuing to grow in China by assuring Chinese consumers that the company was "of China and for China."
It blew up in their face.
In 2021 when Donahoe made that declaration, Nike made $8.29 billion in revenue in China. Five years later, they were down to $5.85 billion. Nearly 30% of the business disappeared.
In 2019, Nike pulled a Fourth-of-July themed Air Max sneaker because it said it could 'unintentionally offend.' A year later, the company launched its "For Once, Don't do it" racial-justice campaign and publicly embraced Black Lives Matter messaging.
Then Nike partnered with Dylan Mulvaney in 2023 for a paid promotion of women's leggings and sports bras. At the time, OutKick reported that researchers and a Boston's Children's Hospital publication had described Nike as supporting a proposed study involving transgender youth athletes. A Nike executive, speaking to OutKick later said the study "was never initialized' and was not "moving forward." It was later reported that Nike had pulled out after critics had learned of it.
Nike repeatedly made left-wing politics part of its identity and dared customers to object. Now they have left the S&P 100, its stock down 80% from its peak and its executives are trying to rebuild the product innovation and marketplace relationships that made the company dominant.
Michael Jordan understood. What Nike failed to understand was they don't have to buy yours.
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