Nike, one of the NFL’s top partners, experienced a significant drop in shareholder value last week. The company lost $28 billion as its stock plummeted nearly 20 percent in one day. This decline occurred after Nike announced expectations of sales decreasing in the upcoming fiscal year. Since November 2021, Nike’s stock has been steadily declining from over $177 per share to $75.65 at closing on Friday. This drop marked the worst day for Nike shares since its initial public offering in December 1980, prompting the company to lay off two percent of its workforce and reduce $2 billion from the payroll.
While Nike’s contract with the NFL remains in place until 2028, CEO John Donahoe could potentially be replaced due to issues such as focusing too much on established brands, a lack of innovation in new styles, and discontent with retail partners due to direct-to-consumer sales. These challenges have impacted Nike’s profitability and left its ability to recover uncertain at this time.
In addition to these financial setbacks, Nike also faced legal challenges from the NFL regarding a trademark dispute over their logo use. While this issue has yet to be resolved through court decisions, it adds another layer of uncertainty and risk for the company moving forward.
Overall, while Nike may resolve some of its financial losses through future court decisions or other means, their ability to recover fully remains uncertain at this time given the various challenges they face both internally and externally.