WILL THE NHL BECOME
THE NIKE HOCKEY LEAGUE?
BY EUGENE W. PLAWIUK
BY EUGENE W. PLAWIUK
Hockey is Canada's national game, and the names CCM and Cooper were synonymous with that game. Two years ago all that changed. Nike took over Canstar/Bauer Inc., the maker of Bauer and Cooper equipment. At the same time SML International, the parent company of CCM, declared bankruptcy.
This change was not noticed by many in the public or by many fans. It was noticed by a few business and sports pundits, in particular those whose business is sports. Canstar/Bauer and CCM were well established names in hockey equipment internationally. Bauer recently expanded into the inline skate market and expanded its operations from North America to Europe.
CCM fell behind and ended up declaring bankruptcy in 1995. CCM now has a new president, the former CEO of Canstar Inc., Bauer's parent company, who was displaced when Nike bought out Canstar.
Of course this should be good news for Canstar and Bauer, especially for their shareholders. Thanks to NAFTA Nike, the worlds largest and most successful athletic shoe manufacturer can add them to it's empire. But what will it mean ultimately for Bauer and especially for Canadian workers in Bauer's factories in Quebec and Ontario?
Of Nikes over 17,000 workers only 1200 are unionized, those that coincidentally work for Canstar/Bauer. Only the workers in Canada and Italy working for Canstar/Bauer are unionized. The majority of Nikes workers are located in offshore factories in Asia working for Nike controlled sub contractors. Since 1984, when the last Nike factory was closed in the US, Nike has outsourced all of its production of shoes. In the case of their highly successful apparel and clothing line that which isn't outsourced through Asian sub contractors is produced in Right To Work states in the American south, again using sub contractors. While Canstar/Bauer has remained an independent subsidiary of Nike the writing was on the wall in 1996.
First Canstar dissolved it's Cooper line, and now only manufactures under the Bauer label. Then Nike announced that it was going into direct competition with Canstar. Producing a Nike line of Hockey equipment, including the high growth market in in-line skates and field hockey equipment.
With CCM in a major corporate restructuring, the window for Nike to increase its market share of the hockey equipment market was wide open. With its take over of Canstar/Bauer, Nike is positioning itself for a major take over of the hockey market.
In order to create a market for its new line of Hockey equipment Nike has announced a joint corporate sponsorship with the NHL; to produce Team Jersey's and supporting hockey programs under its Nike and Swoosh logo'. No mention here of either Canstar or Bauer, they are left to fend for themselves as will be their workers.
In competition with its parent, Canstar, while once the worlds largest hockey company, will lose its expertise and craftsmanship. Nikes new age competitive marketing is really old fashioned branch plant economics. Canstar workers can expect to see their company stripped of process knowledge and jobs shipped offshore.
Hockey equipment can be a very specialized industry. There is small scale goalie equipment manufacturer in Toronto that produces pads and masks for a variety of NHL goalies. Like Canstar , such specialty companies will see their fortunes wane as Nike buys up goalies other players and teams for endorsement money. Thanks to NAFTA all intellectual property rights to production processes that Canstar once held now belong to Nike. It is only a matter of time before Nike decides to use that knowledge in offshore production. With its new found partner in the NHL and with its expanding take over of US college athletic departments, Nike hockey equipment, due out early this year, will become the name and Cooper/Bauer a faint memory.
One of the joint NIKE/NHL efforts is their street hockey program for inner city under privileged kids in Canadian cities. The NHL and its Players Association promote hockey programs for poor kids in inner city school and Nike supplies the sports equipment. This program has been adopted in Edmonton, Alberta, by the City Parks and Recreation department, the Edmonton Public and Catholic School Boards and various community leagues. However its introduction has not been without controversy.
Trade unionists, community activists and human rights groups have protested Nikes sponsorship pointing out that the company is using this program as a form of corporate PR to cover up their shoddy human and workers rights record in their sub contracted factories in Indonesia, Vietnam, the Philippines and now China.
The PLAY program was introduced in Canada and the United States not coincidentally after various human rights groups, such as the Catholic Organization for Development and Peace, had lobbied unsuccessfully to get Nike to adopt a code of corporate conduct. in regards to working conditions in its off shore factories. While Nike claims PLAY is its effort to give back to the community, it is in reality merely an extension of Nikes current attempt to dominate the sports market for its products.
In the past two years Nike, in order to expand its market share a for its products, has offered lucrative endorsement contracts to visible minority players in various sports. The most recent being 19 year old Tiger Woods, who quit Stanford University to become the United States first high profile black golf pro.
It has also offered donations, uniforms and sports equipment to various American universities, colleges and public schools. Nike recently outfitted two major American College hockey teams, with equipment, uniforms and of course the Swoosh logo.
In Nikes home town of Portland, the Public School board was in major financial difficulty and looking to make up a funding shortfall. Along came Nikes white Knight to the rescue. CEO Phil Knight, Nike spokesman Michael Jordan and the Nike Sports foundation, made a donation of $500,000 .
However that came with strings attached. Only $300,000 was in cash, $200,000 was in kind equipment and uniforms prominently displaying the Swoosh logo, and the cash would only be forth coming if the school board could raise the equivalent from other businesses as well.
You get nothing for nothing from Nike sponsorships as the Portland board found out. And so are other American Universities and colleges, as the Nike logo, as well as that of its arch rival Reebok, begin replacing traditional school sports uniforms on campuses. As the Athletic foot ware giants compete for market share, universities, hard strapped for funds, are selling off their athletic departments to the highest bidder. With earning of over $2 billion in three months, Nike can afford to bid very high.
Other Nike marketing tactics have been marred by controversy as well. The NFL and the Olympics have both been subjected to Nike's "ambush advertising".
Nike teamed up with the Dallas Cowboys owner Jerry Jones in a back room deal that did not fit within NFL guidelines for corporate sponsorship. The resulting 'ambush' advertising campaign by Nike using the Cowboys gave Jones a financial reason to call for ending the NFL's control of corporate sponsorship. Jones was brought on the rug by the NFL over his private deals. However it didn't stop Nike from getting a foot in the door of a market dominated by Reebok, the official NFL corporate partner.
At the Olympics no one could blame you if you thought that "America's (sic)Olympics" were synonymous with "Nike's Olympics". Nike built directly outside the official Olympic site making it appear that you had to go through Nike land to get into the Olympics. They produced their own web site, and advertised heavily on TV as well as purchasing André Agassi for $100 million. All so that you could see the Swoosh as many times as you saw the Olympic rings.
Nike sponsorship of sports teams, college athletic departments, public schools, community leagues and individual endorsements come with strings attached.
Those strings have allowed Michael Jordan to claim that he doesn't know or care how Nike operates its factories abroad.
Those strings meant that the University of Southern California would suspend four football players because they had traded their school-issued Nike football shoes in at a Nike Town store for other apparel.
The strings attached mean that Nike donations to schools go specifically to sports programs regardless of the overall financial or programming needs of the school.
In the world of sports, pro or amateur, as in the world of the shoe business Nike calls the shots and you know it. With its workers Nike has always called the shots, and they know it. But due to the recent exposure the company has received from protest groups, now the public is learning about it too. Perhaps the workers at Bauer in Canada and Italy will not loose their jobs, like their American counterparts did. But only if the pressure is kept on Nike to "play fair", something that till now they have only given lip service to.
January 1997
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