Nike, Knight, OSU’s Drake & Gene Smith: An Easy Way to Good Insurance for Nike Player-Promoters


(Video can be found here)

This video shows Knight owner Phil Knight in the Ohio State post-game locker room, after the teams 27-24 overtime victory over Michigan, stating:

“Of the top 25 NCAA teams, Nike supplies twenty of them. And none of these teams are we more proud of than this one.”

Nike makes nothing; it is a middleman, which buys services, by written contract,  from two different sets of production factories. The first set of factories (overseas) makes shoes and apparel.

The second set, located at universities across the U.S., make promotion.Those universities hire players, who also go to school, to perform Nike’s promotion. (The players also promote for the schools.)

Nike Uniforms are Promotion-Props

So when Phil Knight says that his Nike “supplies” NCAA teams, what he means is that those teams, including OSU players, are given  Nike-logo-ed uniforms to use, like billboards, to promote Nike’s products. The uniforms are promotion-props. And what promotion it was on Saturday: the highest ranked game for TV viewership, with a 10.4 rating, and 60 million minutes of streaming viewership — against a set of Michigan/Nike  player-promoters, for which the school gets $173 million.

But Nike’s 2016, $252 million contract to purchase OSU player-promotion services, over 15 years, is somewhat unique. Each year, Nike will pay $1 million to a Student Life Endowment Fund. It will also make a one-time payment of $2.5 million to go toward “general student scholarships,” to be awarded at the discretion of the university. It will also make another one-time payment of $20 million toward an “athletic endowment,” also to be used at the discretion of the university. Finally, the contract “permits” the OSU President to order more than $1/2 million of Nike prodcuts annually, “for distribution to the Office of Student Life,” at the OSU President’s discretion.

These unusual sums (about $42.5 million, over the 15-year life of the contract) are not paid to players, because NCAA Big-Lie #2 — that players don’t promote — allows Nike to get away with it. But these $42.5 million in payments are unusual, because they purport to spread money (and some apparel) around to, potentially, many students who are not the football and basketball players who do the overwhelming majority of the promotion for Nike. The sums are also unique because of the “discretion” which  Phil Knight has handed to the school president about spending this $42.5 million.

Nike’s Sustainability Policy Applies Only Overseas

Nike has a non-negotiable ‘Sustainability Policy’ which includes Nike’s ‘commitment’ to protect its overseas ‘factory partners by ‘disrupting’ existing labor standards, to trigger “new compensation and benefit models,” concerning the “health and well-being” of those overseas workers. This policy uses Nike muscle to force its overseas ‘factory partners’ to better treat the human who makes the product.

No Nike Sustainability Policy for U.S. Promotion Factories

In contrast, Nike has no such ‘Sustainability’ policy for its second set of ‘factory partners,’ (here in the U.S.), to similarly force those partners to better treat the human who makes the promotion.  Nike ignores the “health and well-being” of the bodies of the U.S. college players who ‘make’ their promotion, because Nike fails to use its muscle, as it does overseas, to demand that universities give the best possible protection to the players who daily encounter significant risk of injury.

But that’s not all. Notice that, even though Phil Knight builds into his contract a package of cash payments, amounting to $42.5 million, from which he could have insisted that, for example, OSU use $2 million per year to purchase top-drawer player insurance, OSU President Mike Drake has been given ‘discretion’ by Nike to spend that money any way he wants.

A good faith Nike contract with OSU would have mandated that OSU use some of the cash to buy the best possible health and disability policy to cover the player-promoter –rather than leaving ‘discretion’ to the factory owner. Nike must change their contracts to ‘disrupt’ existing college sports insuring practices, to “trigger new compensation and benefit models” for its players, by requiring that its university promotion-factories use some of the Nike payments to  purchase top-drawer insurance for players. Nike should immediately press for an addendum to its 2016 contract with OSU

OSU President Drake and AD Smith Have a Barnful of Cash, and All the Discretion, to Use the $42.5 Million to Buy Top-Drawer Football and Basketball Player Insurance

But OSU’s President Drake has been given walloping discretion by the Nike contract. Drake, a physician who, by trade, ought to find the lack of top-drawer player insurance unacceptable, and OSU AD Gene Smith are both black men who can institute this change with a stroke of a pen, in order to properly insure the black men who are the overwhelming majority of the players who promote for OSU and Nike. “In America,” Ta-Nehesi Coates’ observed, “it is traditional to destroy the black body — it is heritage.” Knight, Drake and Smith can help put an end to that insidious tradition, with a stroke of the pen. by using some of that $42.5 million discretionary money now floating around the OSU president’s office, to fund that insurance. Time for some action. Lead the way, Mike Drake and Gene Smith. Phil Knight won’t.

Copyright 2016 William Wilson


About brewonsouthu

lawyer, with interest in college sports and NCAA oversight and decisions, and sports generally.
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