Nike's billion-dollar reason for keeping quiet on NBA's China spat
FOX Business' Susan Li and WSJ's James Freeman discuss Lebron James' reaction to the Rockets GM tweet and related tensions in China.
“Nike is a brand of China, for China,” CEO Mark Parker said on the company’s Sept. 24 earnings call.
The apparel-maker's revenue from the world's second-largest economy surged by 27 percent during its most recent quarter to nearly $1.7 billion, with footwear sales in the region accounting for more than $1 billion. It was the 21st consecutive quarter of double-digit sales growth in the area, and basketball was among the drivers.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| NKE | NIKE INC. | 74.89 | -1.77 | -2.31% |
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The sneaker giant garnered $6.2 billion of revenue in China during its 2019 fiscal year, which ended in May.
“Coming off of the FIBA World Cup in China, we are also excited about the energy around the basketball category in this geography, and globally, as we enter the new NBA season,” Parker said. He gushed about the 70 percent year-over-year growth in digital sales in China, calling it “nothing short of extraordinary.”
That could explain why Nike has gone silent on the controversy surrounding the NBA and China, which started after Houston Rockets General Manager Daryl Morey tweeted his support for the pro-democracy protestors in Hong Kong. (Legendary Chinese basketball player Yao Ming was a member of the Texas team from 2002-2011.)
Nike, in response, pulled its Houston Rockets merchandise from five stores in Beijing and Shanghai.
LeBron James, the Los Angeles Lakers player who has a lifetime endorsement deal with Nike that may pay him more than $1 billion, injected himself into the controversy on Monday evening, saying that Morey was “misinformed” when he tweeted about the protests.
“I’m not here to judge how the league handled the situation. I just think that, when you’re misinformed or you’re not educated about something – and I’m just talking about the tweet itself – you never know the ramifications that can happen,” James told reporters. “We all see what that did, not only did for our league but for all of us in America, for people in China as well. Sometimes you have to think through that things that you say that may cause harm not only for yourself but for the majority of people. I think that’s just a prime example of that.”
The LeBron 17 “Lake Show” sneakers, which James debuted during the Lakers’ exhibition game against the Brooklyn Nets in Shenzhen, China, sell on Nike’s website for $200 a pair.
LeBron’s Nike sneakers generated $340 million in sales in 2014, according to Forbes, the last year for which FOX Business could find data. The company didn't break out sales in China.
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Nike and representatives for LeBron James and the Lakers didn't immediately respond to FOX Business’ request for comment.