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NIKE'S GREAT LEAP

Oregon’s largest company bets big on the Beijing Olympics and the new China.

By Ben Jacklet

The story of Nike’s multi-billion-dollar bet on China and the 2008 Beijing Olympic Games begins, appropriately enough, with Phil Knight.

The wily sports guru who has single-handedly kept Oregon’s state budget in the black by selling off $1.3 billion in Nike stock over the past year was a hungry entrepreneur when he first visited China in 1980. His business had grown to $150 million in sales and was revving up for an initial public offering. He recognized China as a business frontier worth exploring, Communist in name but bustling by nature, where wages were low and factories were in need of upgrading. Within a year Knight and Nike had entered into formal negotiations with the Chinese Communist Party, the first advance in a relationship that would intensify and deepen over 28 years of staggering growth for both Nike and China. ...

Read Oregon Business Magazine, August 2008 Online

TIMELINE

• 1980 Phil Knight takes his first trip to China; Nike goes public.
• 1981 Nike opens its first factory in China and sponsors the Chinese national basketball team.
• 1982 Nike products are first sold in China, in the state-owned Beijing Friendship Store.
• 1984 China wins 15 gold medals in the Los Angeles Olympics.
• 1988 Nike brands the slogan “Just Do It.”
• JUNE 3: Tiananmen Square massacre turns world opinion against China.
• 1990-1993: China fails to win the bid for the 2000 Olympics, losing out to Sydney, Australia.
• 1994 Nike helps establish China’s first professional sports league, for soccer.
• 1995 Nike China creates a pro basketball league.
• 1998 Nike brings 17-year-old Yao Ming to Beaverton.
• 2000 Nike funds the first sports marketing program in China. China drops 27 athletes prior to the Sydney Olympics amid a doping scandal.
• 2001 China is granted entry into the World Trade Organization.
• JULY 13: Beijing is awarded the 2008 Olympics.
• 2002 Nike China revenues hit $100 million. Nike signs hurdler Liu Xiang.
• 2003 For the first time, Nike sells more outside the U.S. than within.
• 2004 China makes ownership of private property a constitutional right, but keeps control of the media and the sports industry.
• AUGUST: Chinese hurdler Liu Xiang wins a gold medal in Athens and becomes an instant celebrity amid a Nike ad campaign fanning Chinese pride.
• 2007 Nike opens a 12,000-squarefoot flagship in Beijing, the first in China that Nike directly owns and operates.
• 2008 MARCH: China cracks down on protests in Tibet.
• APRIL: Olympic torch relay is dominated by anti-China demonstrations in San Francisco and Paris; Chinese nationalists boycott Western companies.
• MAY: Nike China revenues top $1 billion. May 12: Chinese athletes unveil new Nike apparel at the Imperial Ancestral Temple inside the Forbidden City.
• JUNE: Olympic organizers release rules for foreign visitors that outlaw protests, ban travel to Tibet and bar anyone with “mental diseases.”
• AUGUST 8-24: Beijing Olympic Games. Nike is not an “official sponsor,” but the swoosh is everywhere.

SOURCES: Hoover’s company records; Wall Street Journal; China’s Great Leap (Seven Stories Press, 2007); SEC filings; Nike China corporate responsibility report; Operation Yao Ming (Gotham Books, 2005); nikebiz.com.

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