Taylor Jilot
Zion Williamson is a very popular name in college basketball, if not the most popular college basketball player. In one of his most important regular-season games against the University of North Carolina Zion wore Nike Paul George 2.5s. 36 seconds into the game he stepped wrong and blew out his shoe. This might not sound like a big deal, but Nike, the biggest athletic shoe company in the world, lost 1.6% of their stocks from this injury. 1.01% of this drop came from just the next afternoon following this injury. For a company that generates over $100 million dollars a day, 1.6% is a lot of money. The image below is a graph of the stocks of Nike in the past year. There is one huge drop, this is the day after Zion destroyed his shoe. Some but very few amounts of people were hesitant to rely on Nike as much as they used to.
Less than a week after this injury occurred stocks for Nike went back up. The stocks aren’t back to where they used to be before Zion injured himself wearing Nike shoes. Later in the season, he tried Nikes again using Kyries with extra support. This also brought the stocks back up. Everyone needs a second chance even if the first chance had you miss weeks of your sports season. Giving Nike a second chance gives Nike a chance to create a shoe contract with Zion. Currently, Nike holds nearly all of the shoe contracts with NBA players, but having Zion sign with them too will only make them more money. Shoe contracts generate a lot of the profits for Nike’s shoes. Just for Lebron James contract alone, Nike earns 1 billion dollars in profits a year.
If Zion were to sign a contract with Nike over Adidas or Under Armor Nike’s stocks would most likely go back to where they were before the injury if not higher than before. People will see Zion signing with Nike as him giving them another chance and that he trusts that it was a mistake with the Paul Geroge 2.5s he wore. People that are fans of Zion will also give Nike another shot with buying more shoes from Nike along with many of Zion’s shoes he comes out with.
Many people thought that Zion blowing out a Nike shoe wouldn’t hurt Nike’s stocks what so ever. This is not what happened, stocks are still not back to what they used to be. This is contradictory to Nike signing with Colin Kaepernick. Many people thought that stocks would decrease due to the fact of the uproar he brought to the NFL. The exact opposite thing happened, stocks skyrocketed when Colin Kaepernick was brought onto the Nike team. All of this shows that the stock market is difficult to make predictions about. Sometimes one thing that everyone might believe that will make the stocks drop actually raises it, and the same goes for the other way around. Will a shoe contract with Zion bring Nikes stocks back up, or will it just take time?
Works Cited
ABC News, ABC News Network, abcnews.go.com/Business/nike-sales-booming-kaepernick-ad-invalidating-critics/story?id=59957137.
Badenhausen, Kurt. “LeBron James Is NBA's Top Shoe Salesman, Keeping Nike Firmly In Lead.” Forbes, Forbes Magazine, 5 June 2018, www.forbes.com/sites/kurtbadenhausen/2018/04/30/nikes-lebron-james-is-the-nbas-best-selling-shoe-salesman/.
Christian, Scott. “No, Nike Doesn't Sell 25 Pairs of Shoes Per Second.” Esquire, Esquire, 6 Oct. 2017, www.esquire.com/style/news/a49538/nike-sales-numbers/.
“Why Zion Williamson's Knee Injury Sent Nike Shares into a Tailspin.” CCN, 21 Feb. 2019, www.ccn.com/why-zion-williamsons-knee-injury-sent-nike-shares-into-a-tailspin.
I feel like it will take some time for the nike stocks to recover, but after a little while, people will get over the fact that the shoe blew out. I mean, he is a man weighing over 275 pounds and is an insane athlete, so it can be expected that his shoes will take a ton of extra stress and wear compared to the average athlete. I also believe if he were to come to a shoe deal and get a signature shoe that nike would thrive off of that as long as Zion ends up panning out in the NBA because his shoes would be super durable and also he is just such an attraction. However, if he were to sign with another brand, this might actually hurt Nike and be viewed as a diss on Nike by Zion. Overall, well written and I love the topic.
ReplyDeleteIt’s very weird to think about how one broken shoe, from a guy who isn’t even a professional yet, affected the Nike stocks. It just shows how every stock is not immune to drastic rises and falls. I’m also interested in seeing how/if the Nike stock rises over the next couple months, because Zion is turning professional, they have the opportunity to sign him to a contract, which may result in gains. Even if they don’t sign Zion to a shoe contract, Nike is a big enough business where they will climb right back to the top of the economy, doing what they do best. Their losses from this injury were huge in comparison to how much money they generate per year, but they will have days where the Nike stock will increase just as much as it decreased, like the day where Tiger Woods won his 5th Masters Championship wearing the famous Nike Red Mock Turtleneck.
ReplyDeleteI was watching this game when it happened and can honestly say that I am not surprised that Nike's stock went down at all. Throughout the entire game the cameras continuously zoomed in on the broken shoe which clearly showed the Nike logo. I feel like this incident not only caused Nike stock to go down but it probably also hurt the purchase of Paul Georges shoes because this was the shoe that eventually blew out. In the article you do explain how since Zion tried the shoes again this would help Nike overall. This is true because Zion is so well known that people tune in to watch his games even if they are not a fan of the team. This causes everyone who watches him to see what shoes he is wearing. On top of him being an outstanding basketball player, he is also one of the most outstanding players when it comes to the height he is able to jump. He is outrageously talented and his jumping ability really shows this. This causes people to look at the shoes he wears because maybe they are the reason he is able to jump so high. Overall Nike needs to make sure to endorse him and make sure he signs a shoe deal with them.
ReplyDeleteAt the end of your blog post, you pose a strong question as to how Zion signing with Nike could affect the stock market. This question could go a couple of ways, but in my opinion, I feel as though the increase in the stock market will come with time first and foremost. After people witnessed Zion blowing out his shoe, people were obviously questioning their reliability to the Nike brand and their products. However, Nike will continue to work on creating stronger products, and work off of any backlash they may receive from others. Nike, as a brand, will want to stay on top in any way they can. Zion signing with them would help in the efforts, but it would not completely change the stock rates. With longer amounts of time to produce new and higher quality products, Nike will prove that they belong on top.
ReplyDeleteI think that if Zion was to sign with Nike, the stocks would indeed rise back up. I think that more and more people will and have realized from that day that the incident was just an unusual accident. This wasn't the first time Zion had worn those PG 2.5s that he blew out in. When you have an athlete that's 6'7" and over 280 lbs with the athleticism explosiveness and agility that Zion has, that's a lot of wear and tear on a low top basketball shoe and no one has seen such an athlete as him. I don't think this will have as large of an affect on the stock market as people are thinking.
ReplyDeleteThis was a missed opportunity for other shoe companies to slide in and make their own offers; if they signed him then they could prove how strong their shoes are in comparison,and make loads off their advertising campaign
ReplyDeleteI feel like when Zion announces who he is going to sign with (if its not Nike) it will bring Nike's stock down further than when Zion blew out his shoe. As more college athletes sign with other companies then Nike's stock will plumment. Zion is a huge deal so all companies must go all out to sign Zion. It will mean a vast amount of investment in the company. I have also noticed more athletes are signing with other companies than Nike. There were many young NBA players who signed with Puma last year and NBA superstar Kawhi Leonard signed with New Balance. I think Nike would not be a place where I would invest, at least until Zion signs his shoe contract.
ReplyDelete-Kaustav Saha
I think that if Zion ultimately signs with Nike, consumer confidence in the company would increase, and their stocks would normalize. I think that this process of signing very high-established collegiate athletes is something that every company desires to utilize and profit off of. That being said, if Nike had lost Zion Williamson as a candidate for future shoe designs or other sportswear merchandise, I think that the long-term effects would be more disastrous for Nike and much more advantageous for Nike's competitors.
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