In a rare case of BiE very much not looking at a European matter, the fiscal ramifications of Zion Williamson’s shoe exploding could ripple through all levels of the sport according to Emmet Ryan
For those of you somehow unaware, Zion Williamson is a basketball player for Duke who is broadly expected to be the top pick in this summer’s NBA draft. While playing against North Carolina, right at the start of the game, this happened:
That Nike straight up exploded. Williamson left the game, his knee is injured although apparently not seriously, and shoenomics are in session.
Nike has a string of winners
A look at Nike’s line-up of athletes, particularly when it comes to those with signature shoes, and you rather quickly see players who are not just the biggest stars in the game but only one, Paul George, has missed significant chunks of time with injury. Even then, he was able to return to being a top tier star pretty quickly.
Their rivals are not so lucky. Getting Derrick Rose so early was a monster win for Adidas and, on the back of a MVP season, he looked ready to carry them into really building their stable. Then he went down in a playoff game against the Sixers and he simply hasn’t been the same player since. Tracy McGrady, another player with an abundance of talent that was riddled with injuries is (he may be retired but his line of kicks isn’t) also with Adidas. James Harden and Damian Lillard certainly help but there’s always cause to chase down Nike.
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Puma are only just back in the game, reinvigorated it should be noted but also in need of some more tactful thinking, while Under Armour are a challenger with work to do. Having Steph Curry as their marquee player is good but they are still nowhere near Nike.
Everybody that isn’t Nike would really like to have a few more superstars, not least because the most obviously player currently next likely to shift units with their name on a shoe, Giannis Antetokounmpo (we’re still waiting on it), is already with the swoosh.
Nike needs to park the dumptruck
Given Duke’s significant commercial ties to Nike, it’s safe to say they have more than a head start on signing Williamson. Even some players chimed in saying as much on Twitter when it came up.
Nike said he is getting his own shoe after college. Pretty sure he is locked in with them.
— Vlad Moldoveanu (@VladMoldoveanu9) February 22, 2019
He went to Duke…he’s been locked in to Nike for about 5 years
— MH7 (@_Michaelinho) February 22, 2019
Up until the shoeplosion heard around the world, the idea of who Williamson was going to sign with really wasn’t up for debate. The swoosh had such a head start and access to the star that nobody expected the others to compete for him. Nike certainly still has the lead but now signing Williamson has gone from being a good thing to do to a thing they really can’t afford not to do.
If Williamson signs with Nike, they can lean into the moment. Dan Patrick said as much, describing the idea of advertising shoes as Zion proof or Zionised. If any other shoe maker signs him, there’s no way this doesn’t come up often and can also be used for future pressure in the market with other stars that come through.
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The others need to go for it
There are no guarantees that Zion Williamson pans out as a superstar at the next level. Nor are there any that he won’t suffer injuries that seriously hinder his long term marketability. When an athlete is offered a deal in the $60-$80 million range, the shoe company doing so is gambling to a degree. They try to mitigate but there’s only so much they can do.
Nike know that too and that’s why Adidas, Puma, and Under Armour need to seriously consider going crazy with their offer. The type of offer that keeps the athlete in the room and has too much risk behind it to be considered worthwhile.
The goal here is not to replace Nike as the leading shoe maker, their market position is extraordinary isn’t going to be swung by one athlete. It’s to have a real impact on where market share is. The market as it stands is then Nike and the rest. Adidas made it Nike, Adidas and the rest to a point but they are much more with the pack now.
Go big on Zion, as in 50 per cent premium on what Nike might offer, and you make a statement about what you want to be as a brand going forward. You are the contender and you’re not afraid of the real risk of being shown up as a pretender. Success there and it can help in sales beyond basketball fans, particular in signing up young talent going forward.
It’s not like there hasn’t already been an impact
Nike’s shares dropped by 1 per cent following the incident, such was the reaction that over $1 billion in value was wiped off the swoosh. It’s light years from existential but it is a sign that this god can bleed.
Oddly the incident might actually increase the value of Williamson’s first shoe deal. With the other makers essentially out of the running, Nike was likely to go in as the lone real bidder for his services come the day he declared for the draft. Now he can work with the market and that will earn him quite a bit more cash. Nike will still probably win, as Mike Hall and Vlad Moldoveanu said they still have the edge, but they’ll probably have to spend a bit more to be certain of his services.
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