Nike Struggles at the Olympic Games
By: Petrina Huang
The month of August heavily revolved around the Olympic games in Rio, bringing everyone around the globe together. Many athletes made personal achievements, while Nike struggled to get the worldwide audience to recognize their brand as an official sponsor. Read more about how Nike did against their increasing competition.
The 2016 summer Olympics have come to an end this year in Rio (with Canadians having plenty of successful moments to be proud of). Although Canada did not rank in the top 10 countries with the most number of medals, Canadian athletes have broken multiple records for our country. Similar to Canada, Nike competed with their rival brands, Adidas and Under Armour, at the 2016 Olympic games.
With the 2012 Olympics being the most-watched event in television history, the 2016 Olympics was a perfect opportunity for sports brands to connect with a global audience by having their product appear onscreen via commercial or on an athlete. Airtime for brands and their logos is the biggest payoff of the games, which is why brands leverage their deals with teams and athletes to make sure their logos are the most visible.
Nike’s History with the Olympic Committee
Nike’s relationship with the Olympic Committee began back in 1996, when they were not an official sponsor of the Olympic games. Instead of having to pay around $100 to $200 million to become an official sponsor, Nike found a loophole in the rules and regulations. Nike decided they could get their brand into the games by providing U.S athlete, Michael Johnson a pair of gold Nike’s to wear during his 400m event, which he then won a gold medal in (as shown on the left).
The same pair of shoes was then seen slung around the athlete’s neck on the cover of Time in America (as shown on the right). To further get their brand recognized by consumers, Nike opened a “Nike Centre” right beside the athletes’ village, as well as handed out flags with their logo on it to fans. Many viewers identified the Nike brand as the Olympic games sponsor, while forgetting about Reebok, who paid $50 million to be an actual official sponsor.
Over the years Nike has become an official sponsor of the Olympic games and no longer needs to rely on tactics that would leave the Olympic officials infuriated. This relationship between Nike and the Olympic Committee was working out well, helping Nike’s shares, until the last two summer Olympic games. With just a week into the 2016 games, Nike’s stocks were seen losing to their rivals, Adidas and Under Armour. Although Nike’s stocks rose by 1%, Adidas and Under Armour’s stocks have risen by 5.9% and 2.3% respectively. The most surprising thing is that Adidas and Under Armour aren’t even official sponsors of the game. They followed similar tactics Nike used in 1996, by endorsing top athletes and teams. The competition for Nike is increasing, challenging them to think of new and creative ways to market their brand so that it is relevant to their consumers.
The Future of Nike’s Brand Management
Should Nike be worried? Will they decide to sponsor more top athletes, instead of just the U.S team to get their brand recognized in the Olympics yet again? I guess we will all have to wait four more years to see how Nike will react, and if they will take action in the 2020 Olympic games.
Take a look at the pictures below to see the different brands that the top athletes and teams were wearing at this years Olympics in Rio.
Phelps is seen sporting an Under Armour sweater at the 2016 Rio games, although the U.S team is sponsored by Nike.
The U.S.A men’s 4x100m relay swim team wearing jackets sponsored by Nike.
Simone Biles is seen wearing an Under Armour leotard during the 2016 Olympic games.
Team Great Britain’s uniforms are sponsored by Adidas.