The Potential Impact of Nike and Under Armour's Management Changes
It was as if Robert Kraft and the Rooney family both sold the Patriots and Steelers on the same day. That was the impact felt in the sports apparel and performance wear industry last month when both Nike and Under Armour — industry leaders if not the two companies that created the space altogether — both announced new chief executives.
The appointments of John Donahoe and Patrik Frisk to the top spots at Nike and Under Armour, respectively, each had different reasons that triggered the changes. But as both CEOs move forward in their new roles, they should be equally focused on developing robust omnichannel athlete marketing campaigns.
Nike and Under Armour are to athletes like peanut butter and jelly are to bread. Sure, they can exist by themselves, but peanut butter and jelly needed bread to become an American staple. Much in the same way, Nike and Under Armour needed — and still need — athletes to become among the world’s most identifiable brands.
When Bill Bowerman first made shoes, prior to founding Nike with Phil Knight, on his waffle maker, he used them to outfit his Oregon track and field team — most notably American distance running sensation Steve Prefontaine. On the heels of setting American records across multiple distance running events and in conjunction with the official founding of the company, Prefontaine became the first endorser of Nike shoes.
Though he passed away in his prime, Prefontaine identified the road map for Nike and Under Armour, which was founded several years later. Both brands relied heavily on superstar athletes, and still do today. LeBron James, Kevin Durant, Tiger Woods and Odell Beckham Jr. are part of team Nike. Likewise, big names such as Cam Newton, Steph Curry, Tom Brady and Jordan Spieth share the Under Armour banner.
In fact, athlete sponsorship is so critical to both brands that money that Nike and Under Armour pay to athletes often eclipses the value of their team contract.
In the era of social media, Donahoe and Frisk must employ marketing campaigns that give consideration beyond the biggest names in sports. Don’t be mistaken, vying for superstar athletes will always be at the forefront of conversation regarding the two brands. For example, this offseason’s battle for top NBA draft pick Zion Williamson is evidence of that.
Other athletes, however, now have quantifiable reach and connection to their own fanbases. Decades ago, the theory behind signing guys like NBA all-time great Michael Jordan or Yankees surefire Hall of Famer Derek Jeter was that they saw the most camera time. Now, consumers aren’t solely focused on what’s on their television screen. Instead, screen time is divided between the television, smartphone, laptop and tablet, all of which have made social media equal value. And social media provides fewer barriers to entry. While no athlete had the ability to develop his or her own dedicated television channel, anyone can start a social media channel and build a valuable audience.
This dynamic has allowed lesser-known athletes to develop brands that have monetary value. These athletes often collect followers as blue-chip high school recruits, later as stalwarts at a big-time college program, and thereafter once they join a professional league. Each of these stops can equate to hundreds of thousands of new, captive fans engaged in that player’s personal brand — hanging on their every tweet.
Because of that paradigm, if you look at online influence, there's tremendous engagement and value in the bottom half of every sports roster. That influence can be turned into revenue for brands like Nike and Under Armour.
And given that that the next evolution of growth in sports apparel is in direct-to-consumer and e-commerce, both CEOs will want to consider online influence more than an athlete’s Q-score.
It’s interesting, really, because as we consider up-and-coming college athletes looking to turn pro, the NFL Draft has a particular paradigm that feels antiquated from a brand perspective. They invite those players considered to be first-round caliber picks while the remaining pool of talent watches the draft from home.
The 254th and final selection in the NFL Draft is deemed “Mr. Irrelevant.” As far as Nike and Under Armour are concerned, that couldn’t be further from the truth.
Blake Lawrence is co-founder and CEO of athlete marketing platform opendorse.