Nike Suspends contract with Adrian Peterson

September 24, 2014

Photo taken from article by Marie Cabural

SUMMARY

“Nike Inc. suspends contract with Adrian Peterson” is an article written by Marie Cabural for ValueWeek.com on September 17^th, 2014. As per the title, it speaks on the contract suspension for sponsorship Nike had with the running back for the Minnesota Vikings, Adrian Peterson. The reason for this suspension was due to the child abuse allegations against him. In a quote from the article, Nike has said “Nike is in no way condones child abuse or domestic violence of any kind, and shared our concerns with the NFL.”[1] The author states that this happened when the Minnesota Vikings removed Adrian from the active roster to deal with these allegations against him and that Adrian was advised to stay away from any activities that directly related to the team. Adrian was accused for injuring his child when he spanked him with a wooden switch. While he admitted to the incident, he claims he never meant to injure his child. Nike recently has also terminated its sponsorship deal with another running back Ray Rice because of a public domestic violence issue.

OPINION

            I completely understand why Nike suspended their contract with Adrian Peterson. They’ve built their company from the ground up and in order to protect their name from being dragged through the dirt, they cut all ties with the party bringing them down. In relation to my last post, Nike endorses so many athletes that cutting one probably will not matter financially for them. Their sales in the football league will still continue to be on the rise as they have other players endorsing their products. Just like in a job, you represent the company you are with and any action either in bad faith or that can irrefutably hurt the business, will be terminated. Not directly in response to this particular situation but in recent light of scandals regarding Nike's endorsees, I think it is right that Nike and many other companies do not entertain the tomfoolery that high paid celebrities and athletes tend to get away with due to their income. I believe if you make an example, it will deter people from trying to be above the law and in turn they will appreciate the opportunities they have more as they know they can be taken away despite who they are.

QUESTIONS/FEEDBACK

1.    Do you think that Nike was justified in their decision?

2.    If no, would you have any amendments added to his contract?
3.  When do you think an athlete comes a liability for a company?

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[1] Cabural, Marie. "Nike suspends contract with Adrian Peterson" ValueWalk, 17 Sep. 2014. Web. <http://www.valuewalk.com/2014/09/nike-inc-suspends-contract-with-adrian-peterson/>.

Is Nike Spending Too Much on Superstars?

Photo: Allyson Felix from Marie Claire

SUMMARY

                “Is Nike spending too much on superstars?”[1] was written by Kyle Stock for the online sports section of BusinessWeek.com and was published March 20^th, 2014. The author of this article is trying to explore why Nike spends vast amounts of money endorsing athletes to represent their brand. The author feels that it is important as a global company to spend money to keep its superstars in their corner. It is said that Nike uses “1 in 10 of its revenue dollars on such costs…and has spiked again in recent months”. Nike’s advertising sponsorship tends to fluctuate based on different seasons and events. Recently in March of 2014, Nike had released a new line of “burly –looking sneaker boots and a line of patriotic sportswear”[2], which ultimately was not cheap exposure based on the event it was released at. “Nike has said its fans can expect an increase of more than 20 percent in “demand-creation” expenses for the recent quarter, which comes to an added $124 million”.[3] The author feels that as a business you must first spend your money if you’d like to make a profit but at some point feels this may be harmful.

OPINION

                In my opinion, I agree with the author that you ultimately need to spend the extra dollar in order to make a profit and keep your brand alive. I believe Nike spends a lot of money endorsing athletes for different product lines and various other activities, however I do feel it is justified. In order to have your business grow, you need to build your brand. Celebrities are given a high regard and are often imitated. In my opinion, many consumers look to celebrities when selecting certain sports attire as it’s a common notion that people believe if you see someone use a specific product and it works for them, it will then in turn work for you as well. To me it is also a monkey-see monkey-do concept. I feel all their advertising does them justice or they would not still be in business. Their brand is easily noticed, easily known, and is in every sports match and workout video, etc. By endorsing various athletes , Nike ultimately gets their brand out into the public sphere where it is recognized and the functionality of their design is exhibited.

QUESTIONS/FEEDBACK

1.       Do you feel that Nike spends too much endorsing their athletes? If so, do you believe they would get the same result with less endorsements?

2.       How much do you think Nike spends a year endorsing athletes?

REFERENCES

Stock, Kyle. "Is Nike Spending Too Much on Superstars?" BloomburgBusinessWeek. Bloomburg LP, 20 Mar. 2014. Web. <http://www.businessweek.com/articles/2014-03-20/is-nike-spending-too-much-on-superstars>.

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[1] Stock, Kyle. "Is Nike Spending Too Much on Superstars?" BloomburgBusinessWeek. Bloomburg LP, 20 Mar. 2014. Web. <http://www.businessweek.com/articles/2014-03-20/is-nike-spending-too-much-on-superstars>.

[2] Ibid.

[3] Ibid.