U.S. Markets open in 48 mins

Nike's billion-dollar reason for keeping quiet on NBA's China spat

Jonathan Garber

“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.

GET FOX BUSINESS ON THE GO BY CLICKING HERE 

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.

“You guys know when I speak about something, I speak about something I’m very knowledgeable about, something that hits home for me, something I’m very passionate about,” James said.

“I felt that with this particular situation, it was something not only was I not informed enough about, I just felt like it was something that not only myself and my teammates and our organization had enough information to even talk about it at that point in time.”

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.

CLICK HERE TO READ MORE ON FOX BUSINESS

Nike and representatives for LeBron James and the Lakers didn't immediately respond to FOX Business’ request for comment.

Related Articles