Nike Surfing: A swoosh and a miss
Swoosh.
It's the sound of Nike stepping out on the surfing industry. Nike are yet to release an official statement though sites such as ESPN and publications such as STAB, which has a close affiliation with Nike, are reporting that as of December 31 all Nike surfers will have their sponsorhip shifted over to Hurley. The Nike logo will remain on surfers boards but as a footwear sponsor only.
The news comes just two months after Nike withdrew sponsorship of the US Open of Surfing at Huntington Beach ending a five-year tenure. Yesterday's news is also likely to spell the end of the ASP Prime Nike Lowers Pro scheduled for May.
Nike purchased Hurley in 2002 and for three years allowed the Southern Californian company to be their sole participant in the surf industry. In 2005, however, Nike created Nike 6.0 to compete against the smaller, edgier brands in surfing, skateboarding and snowboarding and gain a toehold in action sports.
"When we looked at action sports, we saw a unique consumer segment that was underserved in terms of product innovation," Nike's chief executive and president, Mark G. Parker, told the New York Times.
Nike entered surfing, first through Nike 6.0 then via Nike Surfing which picked up rising stars such as Julian Wilson, Kolohe Andino, Laura Enever and Carissa Moore. Nike chose to compete for the same marketshare as its subsidiary, Hurley, by manufacturing its own Nike branded surfwear.
All three action sports – surfing, skating, and snowboarding – have an insular core of participants and demand a high level of bona fides from companies wishing to do business. Nike, with a distinct lack of surfing tradition and an overly corporate image, were apparently unable to win surfers over. Tough financial times would also have contributed.
The changes to Nike mean Hurley will have nine surfers on tour yet only sponsor one event - the Hurley Trestles Pro – in 2013.
Comments
Huge company with greed.When I think of Nike,Michael Jordan and basketball come to mind and that is all.No relevance to surfing for me.
Unbelievable. I just can't believe this happened. Dumbfounded. Flummoxed. Flabbergasted. Mind boggled. Truly stunned.
And stuff.
You could level the 'huge company with greed' at pretty much any of the big 'surf' (read: clothing that is loosely linked to surfing) companies.
Highlights the growing disconnect between surfing as a sport/pastime and surfing as a brand. There will have to be a fracture soon as wetsuits, boards, actual surfing gear is a highly niche market (as opposed to boardshorts) and large clothing companies don't/can't compete effectively in niche markets. Those buying the clothes have no link with the professional athletes and hence sponsorship of surfers (even the incredibly marketable J Dubs) is a poor return on investment.
Nike couldn't compete with small and edgy brands like Billabong or Quiksilver???
Christ, the surf industry is in more trouble than I thought.
Could this be the reason behind the Australia Open of Surfing not running this year?
With Hurley taking on all these additional sponsored riders there would be a lot less money to throw around, let alone running an event.
Brendon Thomas is the Editor of Surfer Magazine, the largest surf mag in the world. Here are his last four Tweets:
What will it take for surf companies to realize that increasingly lucrative athlete contracts are not sustainable?
Winning an exorbitant bidding war on a surf star is the equivalent of being paddled off the peak by a rival in the final minutes of a heat.
You may get the wave but it’ll be useless because you’ll be too deep in debt to actually use it.
One would think ex-pro surfers would have an innate understanding of this.
Hallelujah! And yet this comes on the day that John John is expected to sign with Hurley for an astronomical sum.
Where can/could you buy Nike surfwear?? I've never seen a single item for sale or worn by recreational surfers. Were they on sale in surf shops?
Maybe it wasnt a problem of surfers not buying, but Nike not selling (in any of the regular places anyway).
I think the more interesting story is how impressive the Hurley team will be after this happens. Technically they could very well be the biggest surf brand on the 2013 ASP World Tour.
As it stands they're dominating the Womens Top 10, and the Mens Top 20. It's an imperfect science, because there are more Mens brands than Womens, but still the numbers are impressive - the current Nike/Hurley combo has three of the Top 10 Women and five of the Top 20 Men.
Women Top 10
Hurley (inc former Nike surfers) - Carissa, Laura, Lakey
Volcom - Coco
Quiksilver - Steph
Roxy - Sally
Billabong - Courtney
O'Neill - Malia
Rip Curl - Tyler
(#10 - Paige Hareb, no clothing sponsor)
Men Top 20
Hurley (inc former Nike surfers) - Julian, Ace, Michel, Miguel, Alejo
Volcom -
Quiksilver - Kelly, Jeremy, Travis
Billabong - Parko, Taj
O'Neill - John John, Jordy
Rip Curl - Mick, Gabriel, Owen
Oakley - Adriano
Rusty - Josh
Reef - Kai
Fox - Bede
Globe - CJ
So, the folks who made the free choice to drop their hard earned crumbs made the collective decision NOT to spend their cash on Nike branded flashy colored wetties?
Whatevers.
Nike will still pull serous bank offering their Hurley branded straight black rubber.... And surfing will continue to be surfing.
Drive thru.
Ben,
Well done research. Your spot on observations have hit our own bunny eared "hollywood handbag" straight on it's dome.
Speaking of this reappearance of said Hollywood handbaggie,... It is once agin time to repost this pertinent link.
http://en.wikipedia.org/wiki/Hollywood_accounting
Apart from Individual Surfers, does Red Bull sponsor any events? I mean they have their hand in just about every type of extreme sport competition and free ride . . i'm surprised they are not yet involved in a heavier capacity in terms of the World Tour.
Big surf brands are pretty strange. They generally sell clothes, not surf gear (wetsuits and boardshorts excluded). I mean they dont even sell any surf hardware (fins, leggies, tailpads, etc). Clothes are massivly controlled by changing fashion trends. These days kids dont buy billabong hoodies and rip-curl trakkies with the enthusiasm of yesteryear - I am sure that this is one reason for the demise of surf companies (amongst many others). I would have thought that a more sustainable surf brand model would be to employ shapers, pay them well and pump out Billabong surfboards shaped by the worlds best, and also to make the hardware. These may not be extremely profitable by clothes standards but at least it would keep the surf brands cool and edgy (and possible make brands like Nike less able to influence the market)... Just some thoughts.
@seano, Red Bull aren't major sponsors of any ASP World Tour events but they have been associated in other capacities for many years. For many years they provided branded jetskis to be used on site, and now they're delving into live streaming via their RedBull.tv channel (so the web stream will often be watermarked with a Red Bull logo).
However they've just announced an exclusive big wave paddle event at Jaws this season, which will be great to see - Red Bull don't do things by half measures so if the waves turn it on we can anticipate quite a spectacle.
Red Bull know what's what. In pro-surfing mk 2, those who control and direct content are the Masters of the Universe, not those who merely try to flog stuff by getting Cool Yoofs to use it. Yea, verily.
"In June of 2005 Nike created a controversial poster/flyer to advertise an East Coast skateboarding tour that ended in Washington DC . The flyer featured an image of a shaven head skateboarder sitting on some stairs, his head resting in his arms with the words ‘Major Threat’ running down the side. This image was a direct rip off of a Minor Threat record cover, only Ian MacKaye’s (lead singer of Minor Threat) combat boots were replaced with a pair of Nikes."
This is an extract from a short essay, Nike Vs Minor Threat: Is Cultural Imperialsim a Major Threat?, written by Pete Lewis in Foulweather fanzine. Nothing to do with surfing but plenty to do with Nike's strategy for infiltrating action sports. Also a great read if you're a fan of Minor Threat, Fugazi or Ian MacKaye.
Here's the link: http://foulweather.blogspot.com.au/2006/09/another-20-down.html
Can someone quantify "John John is expected to sign with Hurley for an astronomical sum." I hear that sentiment thrown around for many of the latest and biggest signings from Jordy and Kolohe to Julian etc., but no one ever frames it up with a ballpark figure. What gives? Am I looking in the wrong place or does no one know but it just sounds good?
That's a well written article Stu, and stays away from the spittle-filled hyperbole that often accompanies the 'our sport has been stolen by the mainstream' discussion.
But.
In the midst of it the author makes a few points that show Nike to be respectful entrants, like them or not.
"Undisputedly, Nike, also makes some pretty damn good shoes to ride a skateboard in"
"They make a point of selling some of their Nike SBs solely to skate shops"
Also, when the 'Major threat' thing blew up they swiftly and comprehensibly apologised - showing that they understood the concerns of the people that they were advertising to.
Would you rather have more 'core' brands that lose their way (ie. Billabong) or larger international players that show some understanding and nuance about what is important to the participants?
At the end of the day they see a market and are trying to make a profit, just like all the 'core' companies anyway...
The gravy has been spread way too thinly.
Surf branded clothing and anything else that has been flogged under the surf banner has been over exposed and over marketed for years.
Have any business analysts of note done anything like a serious business case on the "industry" ever?
I really feel for the mums and dads that have lost money investing in Billabong, the executives and board of that company acted like hedge fund managers like the party never ends just spend more and more borrowed money.
I really do not know why news like this makes it on the Swellnet site. It has nothing to do with 98% of surfers here and around the world and I'm sorry I don't feel at all for sponsored surfers or skaters as they are part of the problem.
What other businesses or sector pays serious money for its representatives to fart around the world to party and do something like surf a few days a year? Seriously, is there that much profit in TShirts?
Surfing was never about corporate not even for boards (think Base and isn't Channel Islands in trouble?). It started small and that is where it should stay. The so-called success of the industry over the last 20 years has been an aberration.
If I'm wrong here I would be interested in the name(s) of surf business that are financially secure (no or little debt), expanding market share, hiring staff and standing by is sponsored surfers or stackers not just now but for the last 5 years?
"I really do not know why news like this makes it on the Swellnet site. It has nothing to do with 98% of surfers here and around the world and I'm sorry I don't feel at all for sponsored surfers or skaters as they are part of the problem."
98% of surfers don't read Surfpolitik and I'm fine with that. It interests me though as it does the others who regularly comment here.
Fact of the matter is, large companies moving into surfing have the capacity to affect nearly all surfers. They have large marketing budgets and the power to generate yet more interest in surfing.
"They have huge marketing budgets and the power to generate yet more interest in surfing".
No doubt they do, but is that good for surfing, or perhaps more accurately, which people or corporations benefit from the generation of yet more interest in surfing?
The punter down at the local beach, working in a real job to support him/herself and getting a few surfs in when and where possible? I doubt it and that's my point.
We all have an emotional attachment to this beautiful thing called surfing and yet a few individuals or corporations seems to have this enormous influence on defining it through marketing over priced fluro coloured surf clothing and staging marketing events commonly called pro surfing contests.
I talked about business models in my earlier post. How financial would marketing / pro surfing events be if the industry had to pay rent (at market rates) to hire say Bells for the 2 to 3 weeks of the contest? Why should there be a cost you ask? well, ask the locals who get their beach taken over each year, not all can be on the take and thrown a free Tshirt for their trouble.
Hey I'm not saying it's a good thing. I'm saying they have the power to influence the surfing experience of a great many surfers - and that's why you read this on Swellnet.
But at a personal level I'm pretty damn fascinated by what's happening in surfing at the moment. Seems surfing has experienced a bubble not unlike housing or any other sector; companies 'valued' it more than it was worth paying obscene amounts of money to squeaky-voiced teens while pouring capital into marketing and exposure yet have found they're not getting their ROI so there's a correction happening.
There are many reasons for the lack of ROI and I think you've already nailed a few. I'm positive it'll take a very long time for brand managers et al to reflect and realise why the current correction is happening, if they reflect at all.
I don't consider myself in 'the industry', I only began working here a few years ago and it was the first time I came in close proximity to the business side of the surfing world. I'm not privy to much of what goes on yet some of the things I have seen and heard are pretty damn incredible and show surfing - the business side of surfing, that is - to be a backward industry propped up by old boy gangs and the like. Rather than private schools the WQS seems to be the where they bonded.
The real world is currently overhauling their archaic ways, which is another another reason for the 'correction' happening. So yeah, coming from someone who likes to ponder and speculate this is an amazing time in surfing.
I think it needs to be stated firmly and clearly here, before snide remarks begin to appear, that the ready availability of substances known to make people likely to believe their own bullshit had absolutely nothing to do with this. All business decisions were made by substance free individuals in full possession of their faculties.
@Floyd. Please stop taking yourself and the flattery of others so seriously. I for one find your constant harping about the industry and pro-surfing tiresome, ill-conceived and ill-informed. If you don't like it, don't fucking read it. If you insist on reading it and passing comment, at least try for a bit of balance. For example, in this neck of the woods I'd put Rip Curl, Balin, Strapper and Trigger Bros up as surf businesses that are probably financially secure, certainly paying their staff,and have been standing by their suppliers and other dependents for the last 25 years, at least. Like Stu, I'm fascinated by the surfing biz as a microcosm of the grown-up's marketplace, especially with the way that surfing's sub-culture affect otherwise rational decision makers into making irrational choices. And not all of us yearn for the mung bean salad days of yore.
i think it's interesting too thanks Stu
volcom, patagonia are doing ok i think (someone can correct if it's wrong). Completely different models but they are still relevant to a committed core group of consumers.
Bob Knight, founder of Nike, who started off offering sneakers for sale out the boot of his ride, did not invent running.
Nor did Bob Hurley who pretty much did the same, invent surfing.
So, maybe something as creative as this is the future....
Young men not only designing and selling fair priced branded tees out of their bedroom, but inventing a whole new ocean activity.
Competition is good.
http://rushfall.com/index.html
Those guys jumping off those rocks must have rocks in their heads!! Gnarly
I think this statement rings true:
"When we looked at action sports, we saw a unique consumer segment that was underserved in terms of product innovation," Nike's chief executive and president, Mark G. Parker, told the New York Times.
I was looking forward to some product innovation (surfing related) by Nike as they have good gear available in the US in other sports (dri-fit etc). Stuff we never see over here. Although over there it doesn't cost $200 for a pair of boardies either....although they are a big 'corporation' at least they would have the R&D spend to create innovative and useful materials/products.
@blindboy I assume your tounge is planted firmly in your cheek with that last comment?
I wonder how much certain illicit substances played in the whole GFC? Im sure those New York financier's thought everything looked rosy the more white powder they put in their noses.
Why should we expect the surfing corporations to be any different?
yorkessurfer, it is one of the stranger facets of modern life that we are obsessed with athletes using "performance enhancing substances" but absolutely indifferent to the use of "performance degrading substances" by people in positions of responsibility. You can't ride a bike without a drug test but you can run a bank, or a country, perform surgery or negotiate an international treaty. Not that I personally would believe our civic and business leaders to be capable iof such unethical conduct. I am sure the high ethical standards of organisations such as News Ltd prevail.
Nike are smart because they already owne hurley so they can still profit from all the sales hurley will make . There is already plenty of brands in surfinng who struggle , i dont think Nike need to use there resources in surfing when they have got it covered enough with Hurley .The fashion industrie is the hardest market to crack in the world .Why buy cloths with a huge mark up when you can get cheap cloths that dont have a logo plastered on them for cheap . Its only grommets who need the logo on there gear .i USED TO worship quik rip and billabong but now i shop at a mens cloths shop.
Does anyone have a clue as to why any of these surf tog floggers would actually spono some of these pros when said pros prefer the thrift store look over any of the new goods?
Speaking of these urban middle class adults/overgrown teen trendoids of fashion, here are a few poofsters who obviously preferring a swish over a swoop!
http://followthefish.tv/video/fishtales-news-is-here-with-matty-wilkinson/
It's just been reported that the ASP Prime Lowers Pro - formerly the Nike Lowers Pro - has been cancelled. The ASP has been unable to find a sponsor to fill the gap left by Nike exiting the surf market. The comp was due to be held in May.
And almost two years on from Nike pulling out of surfing:
"Nike confirmed Thursday that it is getting out of the snowboarding and freeskiing industry".
http://xgames.espn.go.com/snowboarding/article/11586421/nike-drops-snowb...
And an interesting quote from that article:
"Rumors about the move had been circulating since the company's fiscal year 2014 results statement in June -- when Nike reported growth in every key area except its action sports division".
How about the rumour, Bobs trying to buy back Hurley as Nike are not happy that Hurley has never made a profit.....??
That's one heck of a quality rumour, Brutus!
Be a lot of surfers on Hurley's roster - and they have one hell of a roster sponsoring an inordinate amount of surfers - who'd be paying attention to that rumour.
If that rumors is true, Bob becomes even a bigger legend !
Sell high. Buy low!
Yew!
Even better for a legendary status, Bob should do a hostile takeover of NKE!
Just a rumour about Bob....but theres a lot happening in the market...Channel Islands also rumored to be in the process of selling....a small point in the Sale of C I is who will become the next shaper/designer at C I.......they can only flog Al Merrick so long...as everybody is now becoming aware that Al hasn't shaped in more than 7-8 years..
very interesting times in the surf industry/ASP......then again maybe its just rumors...but where theres smoke......????
I find it so hard to get my head why the surf culture and amount of surfers in the water are undoubtedly increasing, yet the industry continually suffers and companies are on a never ending knife edge to make annual profits.
Easy. The bulk of the sales from surf companies go to non-surfers. They're the swinging voters of the surfing world. If the companies can convince them that surfing is cool then they'll buy in, wear the fashion, and the P&L sheets look rosy.
But if, however, the fashion cycle swings away from surfing, as it has lately, then the companies suffer. Because despite how crowded the surf appears there really aren't that many surfers who also wear the clothes. Certainly not enough to sustain a billion dollar industry on their own.
In short, Hurley, Bong, Quik, and Rip need the custom of non surfers.
"In short, Hurley, Bong, Quik, and Rip need the custom of non surfers"...
'cause actual surfers are cheap as chip.
Any stadium, any televised event are filled to the gunnels with people who don't actually play.
The majority of people are passive. People prefer to watch.