ASU plays footsie with Nike

If ASU signs the December draft contract, it appears the university would be prevented from criticizing Nike for its labor practices. The draft contract contains language prohibiting the university from disparaging the Nike brand or taking any action "inconsistent with the endorsement of Nike products."

White says the situation has been discussed during executive sessions at two regents meetings.

Last month, Coor and University of Arizona president Peter Likins traveled to Beaverton, Oregon, and met with Knight to discuss the labor issues and the role they would play in any contracts signed between Nike and ASU and UofA.

"We have tried to create some verbiage for the contract that would give us an appropriate parachute in the event that we feel, the institution would feel, that there are some unacceptable labor practices," White says.

"That's a major issue for the Arizona Board of Regents and the two university presidents."

Another important factor is the sudden decline in Nike's financial fortunes. Nike's stock has fallen 40 percent in the past year, and the company has laid off thousands of workers as its inventory soars. Still, Nike has enjoyed phenomenal growth and controls about 40 percent of the U.S. athletic-shoe market. Nike reported net income of $795 million for the year ending May 1997 on revenue of $9.2 billion.

Also muddying the water is the fact that sports-apparel producers are moving away from all-school agreements. ASU clearly saw that Reebok and Adidas weren't interested in getting into a bidding war with Nike for an all-school deal with ASU.

"The growth has either slowed or stopped," White says. "I think you are going to see compression-state economics hit this thing."

That's one reason White says he's pushing hard to reach an agreement with Nike before it stops signing all-school deals.

White remains optimistic that ASU will sign such a deal with Nike soon.
"My job is to keep them interested, to keep on selling, to keep them believing we are a future stock," White says. "I think they have really come to appreciate the growth that is going on in this Valley," where Nike's Knight is a part owner of the Arizona Diamondbacks.

"We have become one of the more serious sports hubs in America," White says.
And serious sports hubs command attention.
Even from Nike.

--John Dougherty

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