Many were shocked when Nike announced last August that they were exiting the golf equipment industry. After all, they had been one of the biggest names in golf for decades, and even became synonymous with superstar golfer Tiger Woods, second only to Nike endorser Michael Jordan on the list of richest athletes in modern history.
According to Nike co-founder Phil Knight, however, their golf egress should not have been that much of a surprise. That is because, according to Knight, the international shoe and apparel giant had been losing money on golf equipment for 20 years.
Tiger’s decline in popularity has not helped, but even during the prime of the all-time great, Nike was finishing each year in the red. Seeing no reason why that should suddenly change, Nike felt it was finally time to close up shop.
- Star Stable: In August of 2016, Nike Inc. announced they were leaving the golf equipment industry. The business giant had endorsements deals with a number of popular golfers, such as Tiger Woods, Rory McIlroy, and Michelle Wie, but had not been profitable in the industry over the past 20 years.
- Despite Tiger: According to Knight, in his interview with Bloomberg Television, Nike was so enamored with the young Tiger Woods, that they were recruiting him three years before they finally signed him at age 20. Tiger and Nike became tightly intertwined, but even his enormous popularity was not enough to make Nike Golf profitable.
- Unprofitable Market: According to Nike co-founder Phil Knight, who recent left Nike’s board, the company believed they would continue to be unprofitable in this sector, and that led to the decision to finally give up on it.
“It’s a fairly simple equation, that we lost money for 20 years on equipment and balls. We realized next year wasn’t going to be any different.”
–Phil Knight, on Nike’s decision to leave the golf equipment industry