American economics is, often, the true driver of lasting change. In this context, Nike has served as one of numerous leading indicators at the intersection of sports and social change for nearly 40 years, from Steve Prefontaine’s rebellious nature (pictured), to Compton’s own Serena Williams, to Lebron James’ philanthropy and social activism. In an earlier 2PM report on the apparel and shoe brand, I explained Nike’s deeper intentions for the then-controversial agreement with former NFL quarterback Colin Kaepernick:
You’re going to read numerous reports on the disingenuous nature of Nike’s co-opting of activism. And through the lens of journalism, their assessments are mostly correct. But through the lens of LTV / CAC ratio (lifetime value / customer acquisition cost), there is a different perspective to consider.
Socio-political arguments flooded the news in response to the deal, but few assessed the economic justification for it. That is, until last week. In a recent essay, NYU professor Scott Galloway explains:
Nike embraced Colin Kaepernick and took a calculated risk that paid off. The math? People of color have a higher representation in Nike’s customer base than the population at large. Most of Nike’s consumers are under the age of 35, live outside the US, and are willing to spend $200 on Vapormax Flyknit shoes. This is Latin for progressives. This was a genius, shareholder-driven move. 
Galloway’s thoughts of Nike’s intent was short-sighted, in my opinion. At the time, an important segment of Nike’s target demographic was comfortable with the deal. But Nike was betting on something far greater than the consensus that existed when the deal was first announced.
Nike is renown for casting light on the American consumer and how we think. In 1990, twenty-seven year-old Michael Jordan quipped, “Republicans buy sneakers too.” Nike stood by those comments. Objectively speaking, that was probably the smartest take that he could have had at that stage of his career. At 57, the same man pledged $100 million to social justice causes on behalf of same brand.
There is an even bigger story developing. When 2PM published the analysis of Nike’s Colin Kaepernick decision, 2PM lost more subscribers in one day than in the trailing twelve months. In that report, I justifed Nike’s marketing rationale:
Nike wants to own iconography. For a company that wants to own history, they own very little of it today. If you’re a history enthusiast, you can watch clips of Jesse Owens in 1936 Berlin exhibiting heroics in first-generation Adidas track spikes, hand delivered by Adi Dassler. Or you can watch Muhammad Ali swinging at other boxers with Everlast on display. Now, Under Armour owns his rights in a protective attempt to prevent Nike from using their marketing wizardry to build their cache. And in a similar attempt, Adidas owns the rights to Jackie Robinson. 
Last week, the NFL’s own social media team subverted the league’s commissioner to release a now-viral video featuring several players including the league’s face, Kansas City’s Patrick Mahomes. In it, they were all but demanding attention for the same issues that contributed to the league’s discontent with some of its most visible players. The athletes on video hinted at the importance of Kaepernick’s potential reinstatement into the league. It’s been four years since the former Super Bowl quarterback played an NFL game. Within 72 hours, Commissioner Goodell released his own response, one that has been positively received. Just two months ago, this sequence of events would have been unheard of. It was Hemingway who once wrote: It happens “gradually and then suddenly.”
In one way, Galloway was correct. Nike’s math contributed to their decision to bet on a divisive American figure. But even Nike’s math was wrong. No one in Beaverton, Oregon could have predicted 2020, this interesting age. The week of that advertisement’s 2018 release, the U.S. president tweeted his distaste with the decision:
What was Nike thinking?”
Within two years, a marketing decision that garnered criticism from all circles of media has begun to pay off. Nike was thinking less about the consumers who already approved of the Kaepernick endorsement deal. They were thinking about the new consumers, the ones that are just now beginning to understand the messages that contributed to his early retirement. That foresight is how Nike makes its money. Not by being safe and calculated but by being right before anyone else. Nike wanted a re-do of sorts. In Inspirational Brands, I explained the story of Adidas and Jesse Owens.
As a culture, we’ve always relied upon the symbolism of achievements, the words of orators, the photographs of journalists, the penmanship of authors, and the impressions of brands that we trust. Another globally relevant event happened in 1936, the year that Coudert’s colleague wrote the letter with the now-famous quote. A young man from Ohio showed up to race in Berlin. With world record speed and a prototype of a shoe designed by a young German cobbler, he defied myths of supremacy en route to four Olympic gold medals. 
I concluded that essay with a prompt: What great symbolism will come of our own interesting age? Michael Jordan, Nike’s most famous athlete, avoided the moments that defined cultural or political history beyond the court. He was opinion-less, he rarely defied convention. With Kaepernick, it is Nike’s effort to own a new genre of iconography. It’s unlikely that an NFL team will sign the quarterback. Regardless, the athlete’s original message is no longer unpopular; social attitudes have shifted. Imagine the story that Nike will share if he does find his way back to the huddle. For Nike, that’s the story that they’re hoping to tell.
By Web Smith |Editor: Hilary Milnes | About 2PM
Part One: The Nike Report (2018)