The possible explanation for players leaving Nike...

[Prostaffer]

Originally Posted by West Coast Ace

Because Nike does their homework and doesn't think he's marketable or recognizable? Fed appealed to older fans because he reminds them of tennis when they were young; Nadal appeals to the young, anti-establishment fans. And maybe they have negotiated with his team and found their demands too high? We will never know (since none of us were involved in any talks) - he may have only gone to Uniqlo because they were the ONLY deal, not the best deal.

OP, thanks for posting - although I'm respectfully not buying. The tennis budget at Nike is a mere pimple on the proverbial 'large mammal's' rear end. For what the Rory contract is allegedly for, Nike would have to shutter the entire tennis operation.

+1 on DJoker being impossible to negotiate with. Why do you think he went to ST in the first place? So his family could get distribution rights in Serbia. He also got all of them jobs with ST basically.

Each division gets a certain amount of dollar to work with. As big as Nike is not everything is a blank check. Normally I would agree with you, but the interesting thing here is that Nike has dropped a lot of player without signing many new ones.

[smoledman]

Originally Posted by Prostaffer

+1 on DJoker being impossible to negotiate with. Why do you think he went to ST in the first place? So his family could get distribution rights in Serbia. He also got all of them jobs with ST basically.

Each division gets a certain amount of dollar to work with. As big as Nike is not everything is a blank check. Normally I would agree with you, but the interesting thing here is that Nike has dropped a lot of player without signing many new ones.

Nike is a corporation like any other, they have to answer to the shareholders as to declining profits.

[Prostaffer]

Originally Posted by MAXXply

On the topic of Nike Golf, what do you guys think of the crossover suitability of Nike Golf apparel for tennis?
I exclude their golf shirts for the reason I dislike the traditional oversized billowey sleeves (presumably to aid one's golf swing?) but the materials are the same aren't they? And their designs are tasteful enough for streetwear. I'd buy Nike Golf polos in a heartbeat if they had normal/small armholes and a regular polo fit.
Mainly, I'm asking about their golf shorts, which look great and are also a great fit for the street. There usually seems so much more cool stuff in the Nike Golf section of a sports store.

The golf short and pants they make are the best hands down. I'm not one to say something that blatant.

However, I have worn Nike Tennis polos to the course. I prefer the more athletic cut of the Tennis gear. In recent years they have improved the fit of their stuff. The TW stuff was actually the closest to a tennis fit, but the prices are out of this world. IMO you are better off buying tennis polos on sale than a golf polo.

[Bobby Jr]

Originally Posted by West Coast Ace

..For what the Rory contract is allegedly for, Nike would have to shutter the entire tennis operation.

I'm not sure the numbers are quite what they seem with these sort of deals. Federer is a far more known sporting entity and better known per se globally.... the devil is in how these deal are arranged. Rory might have signed for 10 years for a figure like $200m... that would make his deal $20m/yr which is not far off, perhaps less, than what Federer is touted to be getting.*

Golf marketing is also a longer gameplan than tennis given how long the careers are, and it's typical for players to go in and out of medium term (1-3 years) form much moreso than a sport like tennis. I would bet that the up-front deals golf players get are actually smaller than what the top tennis guys get except the golf guys have bigger incentives so they can smoke it in a good year. Golf imagery has little sex appeal or street value unlike tennis so results are more directly linked to marketing clout than tennis. So Rory's deal could, in effect be "theoretical money" which he actually still has to earn through performances.

Additionally - having been privy to the details of a sporting (team) sponsorship deal some years ago from the brand side - some numbers you see touted in the media about sponsorship deals are certainly best-case scenario numbers which apply if the team/player achieves X, Y and Z. Many football (soccer) team sponsorship deals work like this - a performance based amount. I don't see why other sports wouldn't adopt similar thinking give or take any sport-specific nuances and operating practices.

Nike golf revenue in 2011 was $623 million (4% down on the previous year)... Another of Nike's affiliate brands, Converse, had over $1.1 billion. Golf isn't as big as you think and certainly not big enough to be writing Rory a cheque for $200m. Nike in it's entirety had revenue of $20.9 billion in 2011. Golf is less than 3% of their revenue.

Nike tennis is not an affiliate so their numbers are harder to come by. Given how many more people play tennis and how many more tennis clubs there are than golf courses globally I wouldn't be surprised if Nike tennis was bigger than golf. A look at their top sponsored players indicates they have money to spend - either because the business is big or because they put more of their marketing budget into player sponsorship (as a ratio).

(*all things considered we have no way of knowing how accurate his supposed endorsement fee is - it may be he gets another $2m every time he wins a major or re-reaches the #1 ranking - it wouldn't surprise me at all given how creative IMG deals famously can be)

[Alchemy-Z]

Its a good chance for them to push into golf...Nike has been with Tennis...and quite established even if they pulled some from it it wouldn't matter.

if they dropped everyone except Fed/Rafa/Sharapova/Serena they would probably still make $$

[Babolast]

Nike makes money from tennis...

It would cost $5 - $10 to make a tennis crew and they bump the price to $80.

The amount of profit is insane.

[Al Czervik]

Bobby, I think you're a great poster, but there is no way Fed's deal is anywhere near Rory's ballpark. They are paying Rory some Tiger like money. I would bet that Roger is barely Top 10 in the Nike stable. You definitely have Tiger ahead of him, surely LeBron, probably Kobe, probably Lance (well, not anymore), 3-5 baseball players, 3-5 American football players, a couple of soccer players, etc, etc.

[Prostaffer]

In 2008 the rumor was Roger got 10-years at $13m per.

That is lower than Rory, but a lot of what they are paying for is potential.

http://www.sportsbusinessdaily.com/J...Year-Deal.aspx

Part of the appeal for young Rors is that he is popular in Asia. In China the game is expected grow versus the rest of the world.

Why do you think Nike held onto Kobe despite Lebron outselling him in the US? They kept him a focal point because he sold very well in China.

I have read many reports where golf is shrinking, yet tennis also has players exiting every year. Which sport has more growth potential? The one where guys buy one racquet and a few kits? Or the one where they have to buy 14 sticks plus clothes?

[Bobby Jr]

Originally Posted by Al Czervik

Bobby, I think you're a great poster, but there is no way Fed's deal is anywhere near Rory's ballpark. They are paying Rory some Tiger like money. ..

I don't know about that. Valuing endorsements is a tricky thing which factors in lots of quantifiable things as well as having a witchcraft component to them - the magical x-factor valuing.

If you look at some key components:

Size of sport (numbers playing): Tennis wins
TV viewed time: tennis wins
Famousness of Fed vs McIlroy: tennis wins
Globally (or widely) known achievements Fed vs McIlroy: tennis wins

but then...
Average price of gear: golf wins
Average wage/disposable income of fan/player: golf wins
Time left in career Fed vs McIlry: golf wins (by miles > 15+ yrs vs 2-4)

then getting a little esoteric...
The global, mainstream media publicity value to Nike of another major win by either: tennis wins (whether or not you can compare the value of sales from a win or not is probably another magic calculation Nike has)

Now, if you take as fact the numbers we've seen bandied about for Federer's annual Nike deal they seem to be about $15m per year. That's not too dissimilar a ballpark as the supposed numbers McIlroy has been associated with if his deal is $200m over 12-15 years (which would be a Tiger Wood length sort of deal). As I said above also - we really don't have any idea what Federer actually gets and it could be higher if his deal has performance bonuses or has any links to sales numbers (esp considering he has the RF brand which we know he at least partly owns himself).

Consider another important factor which would also be in the equation. While golf gear costs a lot more on average than tennis gear the overall, global publicity for Nike from Federer winning Wimbledon for example is much more than McIlroy winning any golf major/masters. Whether the sports see the same spike in sales percentage-wise is another thing. It may be that the higher spending golf players buy their big ticket items less often on average, or more.

Golf has also had a dearth of new talent which brands can rely on to perform year after year until, it seems, McIlroy. That's one factor that has given him so much value imo - he has tons of years left in his career - 15 perhaps or more - so is ripe for the picking by any major golf brand so there is a demand-based number added into the equation which values him. His deal could easily be a 15 year deal which would make $200m a smaller deal than Federer's on an annual basis but greater overall.

[vandre]

Originally Posted by Prostaffer

+1 on DJoker being impossible to negotiate with. Why do you think he went to ST in the first place? So his family could get distribution rights in Serbia. He also got all of them jobs with ST basically.

just like he did with head.

[kaku]

I was at a Nike store and noticed that their tennis section had been replaced by golf. In fact, I think I saw more golf than football + basketball combined

[XFactorer]

Originally Posted by kaku

I was at a Nike store and noticed that their tennis section had been replaced by golf. In fact, I think I saw more golf than football + basketball combined

That would be a smart business decision IF golf makes more money for them in that particular area. As much as we're fanatic about tennis on these forums, we're the 1% in the tennis world.

[BreakPoint]

Originally Posted by Babolast

Nike makes money from tennis...

It would cost $5 - $10 to make a tennis crew and they bump the price to $80.

The amount of profit is insane.

The total cost of a product is not just what it costs to make. You have to add in so many other costs into it (e.g., marketing, distribution, R&D, admin, taxes, etc.). Then you also have to add in the costs of all the products that don't sell and have to be liquidated before the next season's products arrive. Besides, Nike doesn't sell their products to the consumer for retail price. They sell their products for wholesale price to retailers, which is approximately half of retail price.

[BreakPoint]

Originally Posted by kaku

I was at a Nike store and noticed that their tennis section had been replaced by golf. In fact, I think I saw more golf than football + basketball combined

The Nike Factory Stores near me don't even have tennis sections any more. And Golfsm*th stores have gotten out of the tennis business altogether.

[axel89]

Originally Posted by BreakPoint

The Nike Factory Stores near me don't even have tennis sections any more. And Golfsm*th stores have gotten out of the tennis business altogether.

yeah i could never find any tennis stuff here in VA but i went to california and i picked up a lacoste andyroddick polo and a fed shirt

[Prostaffer]

Take this into account too.

Go to a golf course on the weekend and people wear polos. Nice ones. Granted there are public municipal parks where guys are out there in an old beat up polo, but it is usually a golf shirt nonetheless.

I go to USTA tourneys and see guys in soccer jerseys and everything else. Show up to a class or drill in a fed shirt and you look silly. The $15 practice tee works best or even a nice v-neck. I imagine the golf apparel world is vastly bigger let alone the hard goods side of it.

The only thing that tennis players really buy a ton of is shoes.

[MAXXply]

Originally Posted by Prostaffer

The golf short and pants they make are the best hands down. I'm not one to say something that blatant. However, I have worn Nike Tennis polos to the course. I prefer the more athletic cut of the Tennis gear. In recent years they have improved the fit of their stuff. The TW stuff was actually the closest to a tennis fit, but the prices are out of this world. IMO you are better off buying tennis polos on sale than a golf polo.

I visited my local golfing chain today. They were major Nike Golf apparel stockists. As a non-golfer, it was a revelation. I noticed Nike offers a slimfit shirt range that is generically labelled "Sport", as opposed to "Tour Performance". So I'm presuming the Sport range is designed with an eye to crossover non-golf uses. The detailing is great, even if it's still just Dri-Fit stuff.

The shorts, as you say, are excellent and in my climate, a much better option for streetwear. Nike Golf, here I come

[Bobby Jr]

I randomly went into a Nike store where I am today and, for the first time, they have a big tennis gear display with the whole Federer and Sharapova ranges - and even some Rafa t-shirts. I must say the Aussie open polo shirts for Federer are sweet. Great cut, cool construction with all the mesh bits and the zip etc.

[magnut]

Nike is not stupid. Tennis is shrinking and the profit potential just isnt there anymore. In this economy they are going to market to the upper class as they are the ones who can afford to drop big money on nike gear.

Is it really bad that Nike is pulling back from tennis? I dont think so. I like different brands in the sport. I see Diadora is marketing shoes again. Thats nice. Maybe some new companies will enter the market and some of the older ones will come back.

Nike probably wont push hard into tennis again until a new super crop of American players comes into play ala Agassi, Sampras, Courier etc. Isner and Harrison are not really marketable like those players were.

honestly though I have not been a big fan of Nike in years. I liked there stuff in the mid to late 90s. After that....meh. They used to make pretty classy tennis clothes that looked great and felt great. I wouldnt shell out the money for it but it was nice stuff.

[Bobby Jr]

Originally Posted by magnut

Nike is not stupid. Tennis is shrinking and the profit potential just isnt there anymore....

Is it really bad that Nike is pulling back from tennis? I dont think so. ...

Nike probably wont push hard into tennis again until a new super crop of American players comes into play ala Agassi, Sampras, Courier etc....

Who says tennis is shrinking? From what I see they're pushing the tennis ranges as much, if not more, than in recent years.

Stores in Melbourne, Singapore, Bangkok and NZ I've seen in the past 3-4 months have all had significant tennis displays - some for the first time that I recall seeing them there (Bangkok and Singapore).