Nike unties 'U' contract negotiations

Workers' Rights issue main stalling point — 'Swoosh' may disappear from Michigan jerseys

By Raphael Goodstein

Daily Sports Reporter

Jimmy King (right), Ray Jackson (left) and the rest of the Fab Five were influential in elevating Michigan and Nike's marketability.

Two-and-a-half months ago, it appeared that Michigan would renew its contract with Nike to provide athletic footwear and apparel for the Michigan Athletic Department through August 2006.

But Nike director of college sports marketing Kit Morris told The Michigan Daily yesterday that the company has withdrawn from negotiations with the University and that he "doesn’t foresee reentry."

"There was a meeting of the minds and it became apparent that we couldn’t agree to terms," Morris said. (Michigan made the) "requirement that we would have to live by an undisclosed code of conduct that would require Nike to adhere to any demands made during the contract."

Michigan interim athletic director Bill Martin said Michigan’s support of the Workers Rights Consortium led to Nike’s withdrawal.

"It came down to one issue,” Martin said. (The WRC issue) “was what it was all about.”
Nike felt uneasy about the University’s relationship with the WRC — an organization that supports and verifies licensee compliance with production codes of conduct.

In a statement released by the company, Nike said it was "surprised that the agreement the University submitted to Nike contained specific new parameters compelling the company to comply with the University’s undefined and still evolving Labor Standards and Human Rights Policy."

"Michigan has been very clear that it requires its licensees to abide by its code of conduct," WRC governing board representative and LSA senior Peter Romer Friedman said. "Nike will lose exposure by not having the Maize and Blue ‘swoosh’ on Football Saturday."

The WRC, which hopes to appoint a governing body this summer, would like to eventually set up a watchdog system over companies including Nike. By becoming a provisional member of the WRC on Feb. 18, the University established a new set of rules by which a licensing agent must abide.

Nike’s action came as a huge surprise to University and Athletic Department officials, who expected an agreement to be signed in the next two weeks.

“I was very surprised," said University General Counsel Marvin Krislov, who was at the forefront of the negotiations. "There was no warning. We had made a lot of progress. There were no trouble signs that they were going to do this.”

Martin said he was also shocked and disappointed after hearing of Nike’s announcement.
"There were just a few points that needed to be ironed out — I felt like we were on the 5-yard line," Martin said. "I expected them in Ann Arbor in a week or next to” sign the deal.
Morris said Nike intends to honor its current six-year deal with Michigan, valued at $8 million. The contract ends August 31.

Without a renewal, Michigan athletes will not compete in apparel with the Nike “swoosh.” Meanwhile, Nike will be left without a prominent outlet for its brand symbol.
From here, Michigan will need to cut a new deal to get its equipment for the fall season — a task that Martin said won’t be too difficult.

“We will move on. There is only one Michigan, but there are many Nikes," Martin said. Other athletic apparel companies “will probably be at my front door tomorrow. We are the number one market. We are number one in apparel sales. We will make sure our teams have athletic equipment. Worse comes to worse we’ll have to take out the yellow pages.”
This is the third instance in the past month in which Nike has pulled away from relations with universities.

Last month Nike pulled the plug on its supply contract with Brown University after it joined the WRC. Nike chief executive officer Phil Knight told his alma mater, the University of Oregon, that he would cut off all donations in the future. Knight had given more than $50 million to the school.

"For me personally, there will no further donations of any kind to the University of Oregon period," Knight said in a released statement. "At this time, this is not a situation that can be resolved. The bond of trust, which allowed me to give at a high level, has been shredded."
Martin called Nike’s withdrawal far from an enterprise decision.

“There were no problems with the financial aspects,” Martin said. “This is an individual decision, not a business one.”

Nike recently signed contracts with Michigan State University and the University of Texas. Neither school belongs to the WRC.

“It looks like a pattern is emerging, first Brown, then Oregon, now Michigan,” WRC coordinator Maria Roeper said. “All of these universities have taken a stand about workers rights. Unfortunately, Nike seems to be throwing its weight around. Michigan should not be thrown around by corporate entities.”

— Daily Sports Editor Mark Francescutti contributed to this report.