Breakingviews - Nike puts politically divisive spring in its step

San Francisco 49ers outside linebacker Eli Harold (58), quarterback Colin Kaepernick (7) and free safety Eric Reid (35) kneel in protest during the playing of the national anthem before a NFL game against the Arizona Cardinals at Levi's Stadium Oct 6, 2016; Santa Clara, CA, USA . Mandatory Credit: Kirby Lee-USA TODAY Sports

DALLAS (Reuters Breakingviews) - Nike is putting a politically divisive foot forward. The sneaker group will feature Colin Kaepernick, the first U.S. National Football League player to kneel in protest during the national anthem, in its “Just Do It” 30th anniversary ad campaign. Companies often shy away from politics, but in the commoditized sneaker trade, it’s a risk worth taking.

Kaepernick started the “take the knee” gesture at the beginning of football games as a protest against racial injustice. Other players followed, but not all fans approved. U.S. President Donald Trump called for team owners to fire athletes. In a Washington Post-Kaiser Family Foundation poll in May, a small majority said it was never appropriate to kneel during the anthem. A June poll from Quinnipiac University found the opposite.

Nike is wading into politics proactively, where others did so under pressure. Dick’s Sporting Goods in February decided to stop selling assault-style firearms or high-capacity magazines in response to school shootings. Delta Air Lines ditched a partnership with the National Rifle Association. Pizza chain Papa John’s International ousted its founder after he criticized NFL leadership.

Nike can afford to be different. For one, clothing is pretty commoditized. While some may now shun the brand, others will actively seek it out. Shoes are a far more conspicuous way of making a statement than, say, a plane ticket. Besides, more than half of Nike’s sales come from outside of the United States. The potential hit from those who don’t agree is limited, and to the extent the protest becomes about Trump, and he loses favor internationally, it may even help.

Big companies also have more skin in the game. Historically, multinationals aligned themselves with conservative politicians, who supported free trade. Nike has 328 factories in 37 countries that supply its apparel outlets. A trade war taking shape under Trump threatens that setup. It doesn’t hurt to make friends from the other side of the political aisle.

As protectionist trade and immigration policies threaten corporate interests, there will be more like Nike. Sprout Social, a marketing firm, found two-thirds of customers want companies to take a public stand on a social or political issue. As Milton Friedman said in 1970, the social responsibility of business is to increase profits. That goal, and supporting Kaepernick’s protest, may not be incompatible.


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