A Trip to Nike's Headquarters, Changes in College Sports and ESPN's 'Vibe Check'

0:01Bloomberg Audio Studios Podcast Radio News.

0:30be really unlocking the streaming platform for sports fans. Sports valuations are rising. We'll see when they peak. You don't have to be the best in your sport to make a whole ton of money. Bloomberg Business of Sports from Bloomberg Radio. This is the Bloomberg Business of Sports, where we explore the big money issues in the world of sports. I'm Michael Barr. I'm Damian Sassauer. And I'm Vanessa Perdomo. Coming up on the show, we'll talk what's next in college sports with Amy Prevent-Perko. She's CEO at the Knight Commission on Intercollegiate Athletics. It just did a major survey of Division I leaders.

1:06Amy joins us for a pulse check on the college athlete. We partnered with Elon University Poll to conduct a national survey of Division I presidents, university presidents, athletic directors, and other campus leaders to really help inform, frankly, Congress and others as efforts proceed to build a new model of Division I sports. That and more is on the way on the Bloomberg Business of Sports, but we start with Nike. Now, just about a year into CEO Elliott Hill's tenure, some of his big ideas, turn around the brand, are starting to take shape. Bloomberg News senior reporter Kim Bessine was able to visit Nike's headquarters in Beavertown, Oregon, for an up-close look at some of the sportswear company's latest innovations, and he is here now to take us through them.

1:54Kim, welcome back to the Bloomberg Business of Sports. What is up? Happy to be here always. Man, you've got the Nike comeback, and it is looking pretty good for the company. Tell us about it. Yeah, it seems like it's finally getting some traction here. So Nike posted a better-than-expected quarter last quarter, and part of this has to do with running shoes, right? They're starting to come back there. They lost market share there over the past five years or so to all these upstarts. And now we're seeing 20 % growth in running. And they're starting to come up with those big kind of product breakthroughs that they used to be so well known for.

2:44Like the big breaking records kind of make athletes better sort of thing. So that's what we're seeing out of Nike right now. You know, we talked recently about how Nike just wasn't really the cool kid shoe anymore. Like, they're not what sneakerheads are wearing. They're not what people are excited about. It's what I'm wearing. Well, it's what I always wear. And I was like, wow, I guess I'm not cool anymore. I don't know what the kids wear these days. But is that something that's coming back for them now? Are they cool again, or is it all about performance? For sure, trying, right? And performance is part of that.

3:20You saw their Super Bowl ad this year, their first Super Bowl ad in decades, right? And it was a women's sports Super Bowl ad. They're back to these big sports anthemic advertising. They're also working on these performance products in a way that it is cool if you develop something that makes someone win a game or a race or whatever it is, something that helps them along. And it creates this aura around the brand that people want to communicate and act with. So you were in Beaverton, Oregon not long ago, correct? Yes, that's right. That's right. So Phil McCartney, the new chief product officer for Nike, talk to us about this sport offense that CEO Elliot Hill has announced.

4:05I mean, what is the deal with that? I mean, is that bringing together all of the creative talent within Jordan, Nike, Converse under one roof? Is that really going to happen? That's exactly right. So this is what happened after Elliot Hill, the new CEO, took over last October. He reorganized his teams around sports instead of men's and women's and however else you want to organize it. So there's like a dedicated team to basketball, right? That's how they're looking at it. And that way they can develop products and it's in sync with marketing and everything over certain individual sports. So they have a jacket that inflates?

4:37They do have a jacket that inflates. Did you try it on? Did you fly away? Oh, yeah, I did try it on. I mean, what's up? It's not helium. I'm like, yeah, it does inflate. The concept behind that, let me go through the things that they showed me over at the headquarters. One is a jacket that inflates. The more air that's in it, it's supposed to keep you warmer. And it does feel really strange. Like you hook something up to it and it just puts the air in and then you push it out if you want it smaller. That's set to debut, I believe, at the Milan Olympics next year. Oh, wow. Some other things, they have a shoe that's supposed to make you calm before or after an intense athletic endeavor, like a game or a race or whatever it is.

5:21So it stimulates pressure points in the bottom of your feet in order to trigger responses in your brain. Is that like a massaging shoe? It felt weird. The bottom of your feet, it's odd. That sounds like something that a lot of people would jump on. professional athletes would be all over that. A couple other things. The AeroFit fabric is supposed to help regulate your body heat. So that's going to go in a soccer jersey, so when you're going through, you don't feel so hot. It's a lot of stuff, right? What happened to the pro kids? That was my speed. Converse, All-Stars, and Chuck Taylors. And now, on top of all that you mentioned, And they also have almost like a slipper is the best way I can describe it.

6:10That probably will get over just with the regular folks like me. Yeah, people like science, you know. Yeah. Anything that can make you better. The most ambitious thing they showed me, though, was something called Project Amplify. And the way they describe it is that it's an e-bike for your feet. And I tried it on, and it is a surreal experience. So you put on a shoe. Are those the sensory shoes? The ones like you're supposed to feel the grass, like a tickle of grass underneath? No, no, no, no, no. You put the shoe on, and then it straps around your calf. And then whenever you take a step, it boosts you forward as you move.

6:50And you start running in it, and suddenly the person running next to you who's not wearing these things is panting and exhausted. And you're like, I'm good. Oh, so like running uphill. So it makes like an incline into a flat surface sort of. Yeah, you can just go. And you can feel the little boost in your heels. Michael Barr, pretty soon you two will be able to slam dunk on a professional NBA rim with these new gadgets. I would need that shoe and an AI. Reverse tomahawk. Windmill, baby. That is amazing. As I have more pictures of it, can that be used in a marathon or would they call that an illegal shoe?

7:26That's an illegal shoe. Yeah, that's my question there. This is clearly not something used for performance in a competition. So what's the point of having a shoe like that? It could be used for a few Nike things in the past have been more for medical purposes, like self-lacing and the fly-ease that you can just slip your shoe on. If you can't bend over to slip your shoe on, that really helps those people. So if you can't walk long distances and want to, this is the type of thing that would certainly help you perform at a level that you previously couldn't. I heard they also are making clothing so that it's focused on the areas where you perspire the most, right?

8:06So it gives you ventilation, so maybe under your arms. It gives you cool. I'm not a scientist. But they talk about like the – It sounded awesome, though. Yeah, like you have your own climate, right, between you and your clothes and how to regulate that. You need a charging station. You've got to be plugged into the side of the wall for 15 minutes or something like that. Is that not what already like cool gear, like Under Armour stuff already is? Yeah, yeah, exactly. And moisture wicking fabric on Lululemon pants and everything. The whole industry is working on this stuff. So they're just like late to the game, essentially.

8:38They have some already. Well, one of the biggest problems that Nike had was that their shoes were not getting into the shoe stores. Oh, yeah. And, you know, in that five-year period where they were slumping. But now that has turned around. especially on the performance side. I had a jarring experience out in Portland. I was writing a story about Nike last year, and I went to Fleet Feet. That's a specialty running company. It sells running shoes and running gear for runners. And you go in, and you see the Mizunos, and you see the Ons, and you see the Hokas, and you see every brand in the world, and you ask them, hey, y 'all have any Nikes here?

9:16No, not right now. Right. They have to earn back that shelf space, huh? Yeah, and they have to earn that shelf space. They're back in Fleet Feet now, But again, now they're just alongside everyone who had taken their place before and all these brands that shoppers have been looking at and trying out over the last five years. Was it also something that we saw from the professional athlete side, professional runners not wanting to be sponsored by them? Well, it depends. Everyone wants a sponsorship in some ways. But a common gripe from athletes at Nike is that you're just one of many, many, many, many, many people within their portfolio.

9:54So, some of them like to sign with smaller brands, even if they don't pay as well or whatever the situation is, because they get to be a bigger star at that smaller brand. Well, for our audience, let's just clarify here. Under former CEO John Donahoe, Nike began prioritizing direct-to-consumer sales over its partnerships with Foot Locker and Dicks, etc. But now Foot Locker and Dicks are one and the same, right? They are together. So, the challenge must be that much harder. But, you know, we recently had a great interview on the show and they were talking about the Dick Superstores. And within those superstores, what my understanding is, is that Nike is going to have its own almost like mini store or mini section.

10:30Is that really the future of bricks and mortar retail in the sports industry? I think with Nike in particular, as it's looking back at rebuilding its relationship with these wholesalers, they're looking for like a nice presentation anywhere they go. It was a common gripe from 10 years ago if you're sold in a lower-end shoe store or even a footlocker. If you're on a wall with every other shoe, you don't stand out at all. So all these brands, they want their own spaces in stores. They want more experiential things where you enter an area and it's all about Nike and you can learn about the shoes and you can try things on.

11:05You can jump in them and test how high you just leaped in that thing. The new footlockers have those built into their basketball sections. That's what retail is becoming. And Nike wants as big a part of that as it can get. Now, the new CEO, when I use the phrase new, I put it in quotes, but he has fired about a percent of the executive staff. And he brought in new voices and new faces. How is that working out so far? Everything's very new at Nike right now. He replaced most of his direct reports, so lots of oustings, promotions, new hires and everything, just in the C-suite alone. And there were limited layoffs at Nike also recently as they restructured around these sports-based teams.

11:50So it's an all-new group up there at the top of Nike making these decisions. And so far, the turnaround seems to have just gotten into its very earliest stages. Like they've cleared out much of the old inventory that they need to clear out to replace it with all this new stuff. And now, like from here, the executives keep saying this recovery will not be linear. But it certainly has to be linear over a long term, right, just to keep that arrow going up. Kim, you mentioned that the jacket that they're creating and debuting at the Milan Winter Olympics next year. But they have the Olympics and then the World Cup shortly after.

12:31How much of their focus is going to those two major events? I expect it'll be a big, big focus for not just Nike, but all these athletic brands. Nike in particular, now that it's back to this big, instead of these little internet clicky ads, They're going big with this stuff. And especially now that they've reorganized around sports, these big sporting events will be Nike's big sporting events as well. So the Olympics, the World Cup, the World Cup in particular, because Elliot Hill, the CEO, has stated that global football will be one of Nike's five big categories going forward. And they will be investing in that category.

13:07And that's where you go one-on-one directly with Adidas, right? That is that smash mouth fight that you want to see. Well, Kim, I mean, the reason we're talking about Nike, not only the fact that you were there, but they had a great earnings quarter. And, you know, the stock is up on the back of the news, as is Adidas. But I'm curious, you know, on that earnings call, did CEO Elliot Hill at all discuss the impact of tariffs on their business and how that's impacting input prices and margins and that sort of thing? Is that going to be a big topic? He did. And it's getting worse. So they said it was going to be about a billion in costs before.

13:40Now that number is up to 1.5. Nike has said it will be using targeted or what's their jargon for this? Surgical. Surgical. Surgical price increases across their product lines. I expect them to defend or protect the prices of the biggest products, right? Like the white Air Force One and these really core products. They'll work as much as they can to keep them where they are. But, yeah, you'll see prices continue to rise at Nike going forward. Our thanks to Bloomberg News senior reporter Kim Bessin for joining us. Up next, we turn to the WNBA and a brand new show from ESPN with a focus on women's sports.

14:20For my colleagues Damien Sassauer and Vanessa Perdomo, I'm Michael Barr. You are listening to the Bloomberg Business of Sports with Bloomberg Radio around the world.

14:34this is bloomberg business of sports from bloomberg radio this is the bloomberg business of sports where we explore the big money issues in the world of sports i'm michael bar i'm damian tasse hour and i'm vanessa perdomo espn has a new show streaming on disney plus called vibe check hosted by el duncan jenay ogumike and ari chambers bloomberg originals chief correspondent Jason Kelly got a chance to sit down with El Cheney and Ari from the sidelines of the USC Next Level Sports Conference in LA. And they spoke about their new show, the WNBA, and more. Let's listen to a portion of their conversation.

15:11So El, I'll start with you. Tell us about this show. What is it? What did you conceive of it? And how's it going? Yeah, so I think that the conception of this show was a space where we could talk about women's sports, but talk about them from our own perspective. And I think, you know, the goal and putting vibe check together was not that like, we wanted to be super overly intentional about like, let's get the female perspective. We are women. And so our perspective on sports, whether that be a women's sport or a male sport, we'll skew women and female because that's what we are. So for us, it was just more about being able to unpack more stories, bringing in amazing people like Ari, who has such a temperature on the women's sports culture and has for so many years, like giving her a place where she could cook and have all of this information that she's got about whatever it is from gymnastics to women's basketball.

16:09And I think that's, you know, the ability to showcase all of this incredible women talent at ESPN was really probably the force multiplier of wanting to do this show because in their respective roles, we're all sort of limited to the time that we have and the role that we have. But this is a place where everybody can come and unpack everything that they know in an environment that's super warm. And I think it's going pretty well. What do you think, Janai? I think the vibes are high. The vibes are immaculate. You asked about the inception or conception of it. It came from authenticity. So, girl, were we working the tournament?

16:44We're working the NCAA tournament. And they give us so much content. And obviously, working with Andrea, it's like you're going into this basketball matrix. So Elle needed an easy way to get our thoughts. Because we're going to break. we're cutting through so many different games. And so she's like, let's just do something like a vibe check where I give out two answers and you pick from them and see if you two are on the same vibe. So that was the start of vibe check because both of us just can go into these basketball crazy dark corners. But yeah. I remember the first one too. Do you remember what it was?

17:16No, what was it? It was, yes. The refs. Ari knows. I asked him, I go, what's going to be the second half storyline? Three, two, one. The refs. I think Drea said the refs And I said, the referee. We've got to work on our vibe. Yeah. Just shorten it. But that's where it started. Just seeing if we're on the same page. And from there, it was like the most authentic thing. It created a greater space for more voices, more sports, and just for us to be ourselves. Yeah. Because oftentimes at ESPN, she's working sports. You're working 100 zillion different events. I'm working NBA. But this was a space for us to be ourselves.

17:52So Ari, come in here. Tell us about that exact point. because, you know, obviously women's sports, we're going to talk a lot about that, are rising in popularity, in viewership, in attention at ESPN and elsewhere. How is that manifesting in your work and how do you see it showing up? Well, because it's increasingly popular, I can change or transform my energy from advocacy to storytelling. All I ever wanted to do was amplify and storytell around women's sports, women athletes. And VibeCheck gives me the opportunity to do that. We have this big, comfy couch that Elle typically sits on with her feet up.

18:28And we bring in guests and get to just be the voice for them or help relay whatever they want to relay. And then we can share our perspectives. And I can focus on, with my great teammates, sharing instead of breaking down these doors. Yes, it exists to be the standard, be in an innovative space, but it also exists as another megaphone. for what we're already doing. Right. And it's interesting that you frame it like that because it does feel like they're, in the best possible way, when you turn on the show, everybody's sort of in. You know, there's not sort of a like, okay, we're going to explain to you what's going on.

19:09It's like, welcome in. This is happening. So just like, and we've been felt that on stage. I mean, that feels very intentional, Chanae. Yeah, it absolutely is. Because one, we understand that every second is an opportunity for us to talk about what we love. We don't take this for granted because it doesn't happen often. We're always a mix of people because we have so many amazing voices at ESPN and beyond that can be a part of it. So the moment we say, show's on, we're in it. Elle always has something cooked up, some jokes, some scheme, some skit. I am already prepping for how I'm going to take down Drea in an argument.

19:42Ari is telling us what is the most important thing that happens in women's sports this day and communicating with guests she's known her whole life, basically. So I think we understand that the show is shorter than most and so we want to give it the best punch ever and that's why i think it's always but even beyond that um us getting to know us it's it's a bigger or a better space for you to know us as people i i see i look on the wall and i see a stanford flag i see tennessee flag i see all of uh l's atl trinkets literally there are bobbleheads of outcasts right there aren't you that three thousand is right there but it helps you get to know us better so that um they have great platforms that they're going to continue to build.

20:24I'm still building mine. So it kind of adds to our credibility when we storytell around other ESPN entities. And so how does it fit in your mind? You know, you work across all of these different aspects of ESPN. How does it fit into the ESPN ecosystem, which is feels like it's changing every day? The media landscape is changing every day. Like, Elle, how do you see it sort of like fitting in or or maybe defining where it's going. Yeah, it's actually a bit of, by nature, a bit of a disruptor because it is one of the only studio shows that we put on Disney Plus along with SC Plus, which premiered, you know, a little bit before ours did as well.

21:03So I think that gives you like an ability to sort of merge the worlds of linear TV and digital. You know, Ari is like a monster in the digital space. I've done more linear, although I've also dabbled in digital. You've done, like, She's fantastic on social media and those things as well, but mostly her day job is social media. It's been really cool to see the different groups try to come together and conceive what this would look like, knowing that it's on a streaming platform, but also understanding that it is still TV and we still want to have the same goals, which is to educate, to entertain, to be fast-paced, to get big interviews, to talk about what's happening.

21:40So I would say in the space at ESPN, it's looked at incredibly favorably, and also it's become a bit of a destination for the women that work there. Like, the ones that haven't been on the show or hosted yet are like, when do I get my life taken? And I'm like, bring some stories. Like, tell them that you are interested and that you want to bring it to the table. But also for the women talent, they sit down and watch it with their families. Jess Mendoza was telling me she watches it with her family. And because they can't watch it live often, they can just turn it on Disney Plus and stream it after.

22:09Right, right. All right, so let's talk about the state of women's sports, if we can. Fascinating moment. You know, today we heard a lot of what was going on. You know, you guys had Allie Riley on, you know, literally days after her retirement from the NWSL with local team Angel City. We had Jess Smith from the Valkyries. It feels exciting, but also like a little bit precarious given everything that's going on with the W especially. I mean, Chanae, maybe start with you. the W, what should we be thinking right now? I mean, we're talking a week before the CBA is up. Wow. Yes. You know, I have plenty of experience with the WNBA with change, considering that I'm, you know, I was a member of the WNBA.

22:59My older sister is currently the president of the Players Association. But with great change comes great responsibility, but also it comes with disruption. You use the perfect word, Elle. I look at Angel City and that was the blueprint for its time and considerably for the future with what is possible. I played in the WNBA when I went to my first Angel City game. I was still playing and I was like, whoa, I'm literally across the street. And I'm like what they have going with the business infrastructure, the support, the influencers, the investors. I brought some of my family to that game and they're like, I didn't know this was possible in women's sports.

23:36then you take that blueprint literally shout out to Jess Smith and take it over to the Golden State Valkyries and build something that shocks a lot of people in its valuation so one the players have always been the best in its kind right always going to put out the best product but now seeing the investment that's been the biggest disruptor in the best way because people are starting to see that you can get in on something right now that is huge for years to come it's a generational asset And I do believe that's transforming, above all sports, the future of the industry. NFL's at its peak. NBA's at its peak.

24:10You know, NHL at its peak. Women's sports is rising, and we're seeing that generational change through disruption, positive disruption, good leadership. I'm excited. And it's wild because the headlines are wild. Women are owning their own narratives and statements. I often say that, like, women's athletes, they tend to have multiple degrees. They know what they're doing. they understand that their power is in the collective. It's unlike anything we've ever witnessed before. We're glad to be storytellers of it. But I do think that we will continue. And I say we because I can never say, like, I'm on the other side.

24:43You know, a journalist. You earned that right to say we, girl. Some people should know how it is. But I'm excited for the future because the business is booming. The players are becoming worldwide stars. And the sky is truly the limit. And we'll see where it goes. How worried are you about this? I knew you were going to come back to me on that. I'll say this. Every day, things change. But one thing I do know for sure is that everyone wants to keep the product on the floor. We just, and I say we again, languages have to be spoken that are the same. I think that there was a huge moment, obviously, with Nafisa Collier putting out her statements.