THE BREAKDOWN: The Fall of Nike, Sydney Sweeney, & Infantino Consolidates his Power (E37)

29:11Do you want a FIFA going forward that is run in your interests? Or do you want a FIFA that is effectively just run on behalf of UEFA? Because that's what Seferin wants. So you might think that Montigliani supporting Seferin and getting rid of Infantino is just about Gianni. It's not just about Gianni. I'm just the guy who happens to be here right now, if you let them get rid of me, you will end up with a UEFA placeman in that position who will make damn sure that you don't get your extra 30, 40 million bucks. So whatever you think about what went on a month or two ago, put it to the back of your mind.

29:48I'm your man, right? So here we are. We're six months out from the election for the FIFA president. And the battle lines are starting to be drawn, right? And I think it's going to become really, really interesting to see the tactics that are employed by UEFA. The tactics employed by Infantino are clear. The tactics employed by UEFA to ensure that it gets its way. Because I don't know if you remember, Charlie, in that interview with Alistair Campbell on the rest of politics, what Seferin made quite clear is he is going to get his way. And he doesn't really care how he does it. If I have to do it the formal way, I'll do it that way.

30:29If that doesn't work, we'll do it some other way. So I agree. The challenge I have is we've spoken previously about the different ways you could remove him. You can beat him in an election, you can call special meetings. There is most likely one way, only one way that you wait for him to have to do this, and it's going to have to be the ugly way. They may not want to do that. But if you're really going to get this change through because of the reasons you've just described, and now the time he has running up to the next election. Let's not forget the Führer that existed, right? But as we know with everything, anger is at its most strong when it's fresh.

31:03And in seven, eight months time, I may remember all the reasons that really pissed me off. But as you've said, I am continually reminded of all the financial pressures that my federation is under. And that's really shown in the last seven, eight months. So I'm pissed. But am I pissed enough to shoot 40 million away? That's a big ask. That's a big ask. And also don't forget that what Infantino is going to do is he's going to say, look, I've already said that I'm not going to come back with that particular scheme. Right? Yeah. So you made your point. Right? Hands up. I should have dealt with it better.

31:33Yeah. Does that mean that you want UEFA running FIFA? You can see how that sort of, you know. So in other words, it enables, it gives permission to the federation bosses of the smaller countries in world football to say, look, you know, he's made it very clear he got it wrong. But overall, he's been great for world football. so therefore we are going to vote for him. As you say, at a moment in time when that sort of furore around it has died down, counting on the fact that he can get up to 120, 130 such countries, it's going to be really interesting. You have to act when you're strongest, and UEFA was strongest, and still are probably strongest just about now and in the last few weeks.

32:13If they want the change, they are going to have to break with the rulebook as to how you would remove, and they will have to rebel. And they will have to accept, if they really want to do it, that the players will be collateral, that European players who are going to compete in the women's under-20 tournament going on will not be able to compete. That is the cost of the change that they want to make. Because we know within the power structures that this has been designed, set up, and formalised to protect someone like an Infantino. Absolutely. It's going to be fascinating. It will be. It's going to be fascinating.

32:48Moving on to another controversial topic, which has come up over the last few days, which is moving from the ghoulish FIFA boss to the, I think I can say objectively, rather more attractive figure of Sidney Sweeney. I don't know, Charlie. You could be cancelled for that, I think. Who by? I don't know. You're the only person who can cancel me. True. Yeah, that's true. Do I leave it in or do I take it out? Yes, Sidney Sweeney. I mean, look, it's more than sport, isn't it? This has gone everywhere. Right. Read it out. What is it? what's happened? Sydney Sweeney has been employed to be a model in an advertising campaign for a prediction markets company and the brief that she was given or co-created who knows was to present herself naked with various sports equipment footballs basketballs you name it the response and the reaction to this has been massive because it is all about the presentation of women in and around sport now what do we actually think about it I think we're getting two things confused here just at the surface.

33:51Firstly, there is an endorsement for a business of which part of their market is sport from a non-athlete coming in, leveraging what is, and I'm pretty sure she'll admit it, a highly sexualized brand that Sydney Sweeney has across lots of things that she does for a company that's core target in this advert is likely going to be men of a 24 to 40 year old demographic looking at sport as a whole right and there is sports association of course there is there is the sporting equipment in it it is prediction markets which have a huge influence now on sport what we have started to slip into in this discussion is a bit a different conversation about the sexualization of a woman in a marketing campaign for sport if we were talking about the fantastic Solheim Cup or the athletics that we've just spoken about.

34:52If we were talking about Amy Hunt being put in the same position before the ultimate athletics to promote that specific sporting event, I would understand that approach far more. This is something very different. Right, so first of all, I think what you just said there, which is female athletes getting their kit off to promote themselves and their sports is something which 20 years ago was taboo. but has become unbelievably prevalent and this is generally done under the heading of body positivity right which is oh no this isn't really aimed at men this is aimed at other young girls and reassuring them that it's actually perfectly okay to have a great body as if it previously was not i mean the whole thing is totally mad of course fundamentally is aimed at men really fundamentally okay um so um just as that's happened and it's become more acceptable for athletic females to take their clothes off to promote themselves and things that they're involved in somehow those same people who are doing that are now saying that let's put it broadly a pretty young girl shouldn't be allowed to do the same what absolutely outrageous i mean you know what right do they have having taken their kit off themselves to then tell somebody else who is a model and an actress by her profession that is how she makes her money to say oh no absolutely outrageous you're not allowed to do that because the only people who are allowed to take their kit off and be pictured with a basketball is me i own that that's me that's my territory so do you do you take from this the anger comes from not necessarily the sexualization of sport but the fact that it's not a female athlete in that advert specifically so that is being stated very very clearly by people like amy hunt is specifically that right which is amy's Hunt's position was, as she came off the track, this is what a female athlete looks like.

36:46If you are going to show anybody, you should be showing somebody who is like me. So effectively what they're saying is this. If we decide that we want to sexualize ourselves to promote products, we should be allowed to do that and make as much money as possible from doing that. And there are female athletes who are making fortunes from doing that, okay? Away from their sport. I think last year Coco Gough earned something like 20 million in endorsements, right? I'm not saying, I'm all for it. There is a commercial decision being made by certain brands to say this athlete and the visual depiction of her is something I want my brand to be associated with.

37:24And the decision of that chief marketing officer is totally legitimate. And the decision to accept that contract, totally legitimate. I've got no problem with that. They're now moving on to the next stage, which is we now reserve the right to say who can and can't make money themselves from taking their clothes off and making some money out of betting, right? What, you want to be promoting betting? Is that what you're saying? What's your relevance to betting? The chief marketing officer of that prediction markets company has made the decision based on an assessment of the market that he is trying to address that Sidney Sweeney would be the appropriate person to attract attention to that product, not a professional female athlete.

38:07Sydney Sweeney, who has equity in companies as well. As it happens also. So all part of it. It's all part of it, right? So these are economic, legitimate economic decisions being made. And yet this legitimate economic decision is seen as something which is okay to throw sand in the face of by professional female athletes who are already making lots and lots of money doing their own thing saying, how dare they make money from some broad association with sport? As if female professional athletes own the trademark on any kind of association of females and sport. When's it happened in men's? Just wrong.

38:41When's it happened? What's a good example of when it happened in men's? Advertising? Go on. PTK? Oh, well, yeah. Okay. Yeah. British viewers may well remember a fantastic advertisement for John Smith's the beer when Peter Kay, who's a portly comedian, marches onto a football field, picks up the football, boots it over the nearest road and goes, have it, right? Oh, a whole bunch of professional footballers saying, how dare Peter Kay be pictured with footballs? He's a fat man. You know, that's not a proper body to be associated with football. I'm outraged that I don't have that advertising contract for John Smith's beer.

39:21How dare a fat comedian take it instead? This whole thing is fake and phony and it's hypocritical and i absolutely cannot stand it look if we're drawing this back to one thing has the objective of that campaign worked my god i mean novig is is not is not an unknown company anymore to a lot of people is it but you know seriously this is a marketing campaign designed to attract as much attention as possible leveraging one of the world's top talents, right? Achieved goal. Fantastic. Marketing will have a sexualized element for as long as marketing is around. And it happens across multiple different products.

40:02It happens in different industries. It happens for different reasons. Well, actually, no, predominantly probably for the same reason. But the reality is it's a powerful tool. It is highly likely to lean towards a specific type of person. The market decides these things, right? The example I always give when it comes to equality of pay with women's sport i.e. the idea that female athletes should get paid the same amount as male athletes no matter what the circumstance of the sport is do we think that male models earn the same as female supermodels? No have you heard David Gandhi David Gandhi's talked at length about this has he?

40:33It's fascinating 1 million contracts literally the biggest contracts he got in some of the top campaigns that he was in Gisele Bundchen for the same type of stuff 30 million yeah so sorry So 1 million for the top male model, 30 million for the top female model. But that's because the market dictates that the female market buys more high-end expensive clobber than the male market. And therefore, the people who are paid to market to that market are aiming at a bigger pot of cash because that's driven by market fundamentals. And the reason why Sydney Sweeney advertises gambling products to men is because the gambling the gambling brand is making a bet that Sydney Sweeney is going to be the person who's going to attract the most target eyeballs to their product and to their brand name.

41:22And they're doing that based on market research, right? So the idea that some female athlete who makes their money in all sorts of different ways should come along and say, that should be me doing that. Honestly. Moving on to cancellation. No, perhaps not quite right. The phrase which has now become known in in the general business marketplace is go woke, go broke. And this is something which is very much in the sports industry mind at the moment with regards to the biggest sports merchandise brand of all, Nike. Now, Nike has had a phenomenal run of it. Absolutely phenomenal run of it. There have been a few ups and downs in the meantime, but over 40 to 50 years, they've barely put a foot wrong during my lifetime.

42:08They are the behemoths. Brilliant. They're the behemoths of the sports merchandise space. And they're a quoted company, which means say that they're listed on the stock market in the USA. And by the time just after COVID, they were one of the biggest companies in the world. They were in the S &P 100. The S &P 100 is the list of the 100 biggest companies on the US stock market. And because the vast majority of the biggest companies in the world are American, And it's not far off being a fair denomination of the biggest companies in the world. Then that was about 2021, 2022, that sort of period.

42:46Anyway, since then, Nike's shares are down by 80%. 8-0 % or$200 billion. $220 billion,£160 billion. Just think about that. That's the reduction in value at that business over the last four years. Now, you'd assume that that's because the company's losing lots of money. But it's not. It's not. It's not losing lots of money. It's lost a bit of revenue. So at its absolute peak in 23, 24, I think it got up to 51.5 billion in revenue. And it's now down to more like 45 billion. So it's lost 10 % of its revenue during that time. And that's, by the way, really bad for an established company. And all the stock market analysts will be crawling all over that saying, oh, hang on a second.

43:39What does that mean in terms of your cost margins? What does that mean in terms of your EBITDA? What does that mean in terms of the dividend you're going to be able to pay and therefore putting out sell notes on it? There's no doubt that this is partially driven by revenue. But it's not just driven by revenue. It's driven by market sentiment as well in terms of where Nike has got itself to and whether it still feels like that brand that everyone can love. what's nike meant to you you've you've been and i please this is not an age joke right you've been around for long closer to the time of of nike's existence what did it mean to you i think what it meant was and what it has meant is it is always up with and just ahead of the trend right so so nike sets trends and decides it's sort of you know it slightly makes the weather right so you've got the big merch companies who chop out their merch, do it as cheaply as possible and sell it to you as expensively as possible.

44:32And sometimes it works, sometimes it doesn't work. You know, Adidas and all these types of guys. And then Nike are the ones who've been able to somehow, despite becoming massive, still maintain a bit of the energy of a challenger brand. That's been their genius, is that that Nike swoosh, which is just the most wonderful brand logo, that sort of swoosh with the uptick has always looked towards the future, has always somehow signaled a sense of we are part of the future and therefore by buying our brand that you are buying into the future. And some of the decisions they've made in terms of obviously their legendary partnership with Michael Jordan, they've just made so many good judgment calls to keep their brand in that place.

45:15And then it seems like around about the time of COVID or just before COVID, the pandemic and then since covid they took a a corporate level decision that they were going to ally themselves effectively with progressive politics all of this package of things that left-wing political people have put at the sort of forefront of what they've been trying to sell preach to the rest of the world for the last half decade to a decade and nike decided very conspicuously. It's almost hard to overstate how conspicuously they decided to ally themselves with that. Now, the cornerstone of that was the decision to go into partnership with an American footballer called Colin Kaepernick, who became famous in the US for refusing to stand for the US national anthem.

46:06And the amount of controversy that generated in the US was absolutely huge with you know a vast chunk of the country feeling totally affronted by it and then also a very good chunk of the country saying you know good for him he's standing up for those who the American state has oppressed or has not been run for the benefits of or whatever it might be but it was a very polarizing thing and then for Nike to enact a partnership with that was a moment in time when a good chunk of middle America who is where the real spending power lies. Well, if that's what Nike's about, that's not for me. I'm proud of the USA.

46:47Because up until then, it had always been roughly associated with America. Right? So, yes, completely. Coming back to the question I asked you, to me, it's always been about excellence. The pursuit of excellence. Being the absolute best you could be. Phil Knight, the founder of Nike. Have you ever read Shoe Dog? No. read it my god it's one of the best books anyone out there read shoe dog the fundamental reason for me i think i loved it so much was because again from someone that has only seen the later years of or not the earliest years of nike i've only ever seen nike as this massive massive success but the story of creating this business and how he created it is absolutely extraordinary and 90 of the book is that it's not about how great we are and have been over the last 30 years It's about what it took to get there.

47:37And what it took to get there is what they've lost now. And I just went back to the book. I was interested as I was reading through it a few years ago, what I'd highlighted. And there were a couple of quotes from Phil that I think Nike need to remember and bring back into some of this. One of them is, what if there was a way, without being an athlete, to feel what an athlete feels? in other words through our brand you are going to feel like the people that you look up to and we're going to make you feel like that whether that's wearing Michael Jordan's shoe whether it's dressing like Roger Federer whether it's walking out on a golf course wearing your red Nike top like Tiger Woods we will put you in those positions and we will leverage talent to do that with brilliant product top of the range product so not only do you feel good but you feel like you are the best prepared you could possibly be wow now to me that is the best sell as a consumer looking at a sports product you could give me what do i not care about i don't care about buying another lifestyle product that pitches itself in the middle of a, as you say, discourse around broader global politics.

49:01Also, Charlie, I think what's really important about that, because I totally agree with everything you've said, is that sport is the place we go to to forget about those debates, really, right? So you sit around the dining room table, you listen to the radio station, you read the newspaper, and you're in the middle constantly of these political and cultural debates. And then we go to the golf course. And then we go and watch a football match. And whilst we're watching the football match or playing golf, we do not want to be part of a cultural debate, right? That's not sport. Sport is for its own.

49:32It's a recreation. And for Nike, it's been about participation. It's been about getting involved. They've replaced participation with inclusivity. And this is not the place for me. as a wearer of Nike as an aspirer to athletes where that is the front and center of my mind. My mind gears purely towards how do I get the most out of my buy? How do I get the most out of resonating with a brand? Now, if victory, if winning, if excellence is that North Star of the brand, that is the one thing they should always stick to no matter what they do. You look at the biggest businesses, they can make lots of changes but they always have.

50:12They have one North Star and they do not compromise from it. That again is why that book is so fascinating because with Phil Knight's obsession, he was a runner, so it started very much as athletics, right? It was about the best running shoe you could ever create. Whether it was going to Japan in the 70s, making a flight and a trip that was far more complex than it is today with Onitsuka Tiger, trying to figure out how they created and captured the power of their running shoe and bringing that into a US market. Whether it is moving into sports and recognizing emerging talent like Michael Jordan, because that for Nike, as everyone knows, has been an incredible partnership.

50:47But it started long before Michael Jordan was Michael Jordan. So the things, again, that made them great have kind of fallen a little bit by the wayside. Now, with that comes leadership challenges. And I've written as we were going through this kind of a list of a few things that we should cover off as part of this, because you have this overarching theme, I think, that you can definitely say of go woke or go broke linking to the demise. But there's also things that have actually directly happened off the back of that that have created it. One of which that we can directly link to that was this move from verticals, sporting verticals, athletics division, football division, basketball division, to men's, women's, and kids.

51:34So again, if we're going back to why I go to Nike over other things. I go to Nike over other things because when I want to buy my pair of football boots, they're the brand. If I want to go and buy my golf clothes, I want to look like the guys. I want to win the best products. I don't go because they have a good men's range. Broad, unspecified, lack of focus. That's not why I shop with Nike. The leadership that they had, John Donohoe, who was the chief executive from what 2020 to 2024 made changes here that are now being unpicked that is one of them Nike now moving back to the sporting verticals another major one and John Donahoe elevated it and accelerated it but it actually started under Mark Parker who was the chief exec previously was a move from very strong wholesale retail partnerships I think this is probably the biggest single factor actually to a direct to consumer do you explain right okay What Charlie just said there was, I think, is probably, notwithstanding what we just said about go woke, go broke, probably the single biggest decision might be put under a different banner, which is Nike got too big for its boots.

52:49So in other words, the way in which most merchandise brands sell their product is by having very strong relationships with the big retailers. Yeah. right? So in other words, those retailers will get some pricing power because they're buying in volume. But in return, the big merch producers exert power over how their product gets displayed, over, you know, how they market it together and all these types of things. Nike decided they got themselves into such a powerful position in the marketplace. People like me and Charlie could just go online and just buy direct from Nike. And that came at the cost of certain B2B relationships, which started to be downgraded or degraded effectively.

53:30And the problem was, is that the B2C, that's the business to consumer direct market, had not yet sufficiently developed and may indeed never do so to replace what they were losing on the B2B side. And there's absolutely no doubt that that was a massive factor. It's a huge point. Look, first, if D2C was easy, everyone would do it. Yep. Okay. You have much higher margins. You get 100 % of everything you sell. You get all of the data. from it. You can leverage your consumer experience from the first time they access the brand to make a purchase. Brilliant. When you are a truly global business, to own every single point of that relationship is incredibly expensive and incredibly hard to do.

54:14It is also, no matter how big you are, never going to put you in front of as many people as you could be put in front of. Hence why going wholesale, retail, in your JD sports, your foot lockers, your massive US stores, that is worth the 50 % cut that you may take on your end sell price because you are firstly selling stock in bulk. So you're selling a huge amount in one go. You are also giving someone else the job of shipping, of managing the customer experience that is maybe not the easiest part of a job. Now, I get it. I get it. I get it from Nike. I get it. I do understand why they wanted to do it.

54:56And particularly from a world where we always talk about experience, right? And customer experience and connecting. To want to own more of that makes a lot of sense. Especially when they've tried to bring a lot more innovation and creativity to, as you say, the digital studio, the experience when you go into the Nike store. The Nike app is excellent. It's a really good app. But I still have to go onto that Nike app. I don't come across that Nike app by chance. It is a decision that I make consciously. And to make that decision, Charlie, you have had to have pre-decided, I am definitely going to buy Nike.

55:31Yes. Now, this is the biggest issue, I think, in the wholesale versus the DTC thing, which is that the vast majority of people who buy Nike are not solely Nike buyers. Nike has to back itself that in a competitive marketplace, people will choose their product, right? So I actually, currently, my current trainers are tatty and I need to go and get some more today. So what I'm going to do is I'm going to go off on my way down, walking down through town. I'm going to go to Hamleys and I'm going to go in there where I know that there will be a large selection of different brands. Sorry, Hamleys. Sorry, not Hamleys.

56:07I mean, I'm going to go to - You're going to go buy some Playmobil. I'm going to go to Whiteleys. Lily White. Sorry, Lily White. Charlie. Oh, dear. This is not the drunk Dan, just so he can, he's not too big. There's a certain moment in time. Yes, I'm not going to go to Hamneys. Well, I might go to Hamneys, but not for this purpose. I was going to say your daughter will be delighted to hear this. My daughter will be delighted to hear this. Here I go to Hamneys. Sorry, you're going to go. I'm going to go to Lilywhites. I'm going to go to Lilywhites at Piccadilly Circus, where I know that I will find a great selection of trainers.

56:34Now, because in the past I valued Nike as a product, my eye will be drawn more naturally towards the Nike products. Yeah. And I am more likely to make a Nike purchasing decision. But for me, that's a really easy marketplace, right? I don't have to go on lots of different apps. I don't have to go onto the Nike app first and then onto the Adidas app. I can go into a shop and see all of them and therefore make what I regard as being an informed decision in so doing. Now, Nike have to back themselves that their brand is strong enough that once I put myself in that multi-product situation that I'm going to choose Nike, right?

57:10But effectively, by asking me to go on the app, they effectively are telling me, you need to have already made that decision before. And that slightly puts you under the headline of mug, because then they can start exerting pricing power on you. They can say, well, since you're here anyway, and since you're plainly planning to buy Nike, we can then start to sort of push the price a little bit. So I think you're right. I think betting in stuff that you're going to actually wear, clothes, shoes, socks, putting yourself in a situation where you're expecting people to simply make that decision always to go with you is strategically a very risky thing to do.

57:46If they were going to do this properly, what they had to do is they had to double down on the core identity of Nike, a DC thing. They had to bring me more into that I need to feel like an athlete than I've ever been before. if you were going to own that relationship. The fact that they had category changes like they did, removing verticals, and then asked me to go and make purchasing decisions on a site, which I actually stopped understanding with the clarity that I've always had with that brand, was a horrible combination of factors that worked together. And when they go into this period, they made quick, careless decisions about which products they really doubled down on to try and ensure that the revenue didn't take a hit.

58:25What do I mean by that? They went all in on what we would call the classics. Air Force One, Jordan. Those brands that they could shift in their mind, a huge amount of inventory for very quickly because there was a demand. But the demand for those brands had often always been built on one thing, and it was exclusivity. And in doing that, they stripped out a huge value of what those classics, a lot of that heritage product had done. They deviated from the quality of the core product to the extent where, I don't know about you, but since that has happened, I've had a few pairs of Nike running shoes.

58:57they fall apart like that really that's really interesting they have a foam thing at the moment and what you see in this foam thing is a lot of them have a line through the foam sole and that foam sole is actually clearly glued on right you after I reckon for this pair of shoes I'm thinking I probably ran in them for three months separation in the sole they were pretty much unwearable after that the product that running shoe that Phil Knight strived to build it was better than anyone else had suffered. Now, if you are creating a verticalized strategy with developers who know they're coming in to create the best products because I am creating a running shoe, that doesn't happen to my product.

59:38If I've got a load of developers in there saying we're creating men's, women's, and kids products, and then we're going to sell them in a new retail, well, sorry, a new sales strategy, that developer is not going to have that specificity, that focus to create the best product to then sell in your new environment. So honestly, the reason I wanted to drill into that piece because i think that's a really important part but what is notable to say just at the end of it is that elliot hill the new ceo who they had to bring out of retirement he'd been at nike for 32 years um and there's now being pulled out of a four-year retirement to come and unfuck this basically he is now trying to rebuild these relationships and it is worth saying that 26 2026 wholesale is up six percent to 27 and a half billion dollars it is moving back in the right direction it will not change quickly enough anywhere near quickly enough to move that share price to the extent that that will get them back into a kind of top business conversation in the next few months.

1:00:29But if they can do it properly, can they recover from this? Absolutely. Can they get people back buying to it? Yes. But I do think they need, they have to get that North Star, that core piece. There are other problems. There are other problems. There are other problems as well. Tap China straight away. You mentioned that. The trading relationship between the US and China over the last three years has been significantly impacted by the imposition and then removal and imposition of various tariffs. And that is having an impact on lots of different brands and lots of different situations. Because even if the tariffs get put on and then removed, in the meantime, you're removing B2B certainty.

1:01:00So that's obviously caused a significant problem. So have you got the numbers there in terms of what's actually happened, Charles? So you mentioned financial year 2021 as being a major year for the value of the company. High watermark, yeah. The revenue in China was$8.29 billion in 2021. The revenue in 2026 was$5.85 billion. So that's minus 30 % of their Chinese revenue gone in five years. In a market where sportswear spending has actually grown by about half in the same time period. Why? What it has seen is the rise of Chinese domestic challenger brands capturing a huge amount of this market.

1:01:39Anta and Li Ning being two in particular, domestic brands that are slightly more affordable. I mean, Anta alone now hold 21.8 % of China's sportswear market, where Nike previously would have captured far more of that. And if you lose your quality differentiation in the meantime, and then a local challenger brand comes along, what's the normal charge that you would make against the local challenger brand? You'd say, well, probably the quality is not up to all that much. But if you yourself have not kept up your own quality level and a local challenger brand comes along, then you lose that bit as well.

1:02:11Guo Chao? Do you know what Guo Chao is? I think I pronounced it right. State encouraged consumer pride movement. Basically, it's this... Buy Chinese. Buy Chinese. Buy Chinese products. Support the industry. Invest more and we'll be able to do more. Why have, I don't know, answering leaning, leaning in particular, been very good? Well, they've created the foam type running shoe that I was talking about previously that Nike would have marketed as what made them different and the best in their markets. And they've said, hey, look, we can do this and we can do it for 80 quid rather than 280 quid, which I think is if you look at those top running shoes, what Nike will charge for them.

1:02:46So product innovation through national pride in the brands that they want to start promoting has basically given a Chinese public a different opportunity, a different alternative. Yeah, so if you're looking at the diminution of revenue from peak to now to being about 5 billion a year, you know, about half of that's from China. Do you know what's interesting? I think Nike is also terminating its online distribution deals with thousands of Chinese retail partners from the 1st of January, 2027. They're consolidating their own site, their own app, what they're stripping back in all the other regions.

1:03:16They're actually rolling out in China. In China, they want to basically be D2C. But it does talk about the challenger element to it and the rise of other brands. It does, because it's very hard to keep on being the challenger when you're 50 years into your evolution. And there's one final bit I just wanted to bring up, which is that they are actually currently under investigation by the US Equal Employment Opportunity Commission. And this is investigating whether Nike has discriminated against white employees and applicants for employment. So in other words, in their manic drive to be DEI and all this type of stuff, there have been a sufficient body of complaints, evidence to support a fairly significant investigation into whether they've actually practiced systematic discrimination.

1:04:03you don't want to be investigated by the US federal government. It's just a horrible, horrible place to be. Those cases can go on for a long time, can cost a vast amount of money, and the fines that tend to get levied by the federal government in the US are vast. And they're absolutely huge. So it wouldn't surprise me if part of the current share price problems that they're facing is when you've got a company that's under investigation by the feds, you're not in a good place, right? So I think it's just loads of different things. It is. But in the meantime, also, you have a very strong market that doesn't have one company that has grown up and been competitive.

1:04:38It's got a number of companies that have been competitive. And while you've left retail, that leaves a lot of shelf space. And that's been filled by the likes of Hoka, of On Running, more of Adidas. New Balance doesn't publish its figures, but is significantly up. There's been a huge elevation in alternatives to people. So it's far harder for Nike to go, I identify one challenger. We're going to grab that market share back when a whole number of businesses have come to grab that from them. And just finally, I think, because there's really a question here, as we ended up, are they terminally screwed or is this recoverable?

1:05:12Those companies I've just named, everyone looks at and says, oh, haven't they grown in the same time? They've also and are also having significant challenges. On shares fell as much as 22 % by August 26 on a revenue miss, right? Public company. Hocus growth decelerated into single digits so we're not saying the market is booming there are real challenges out there for everyone and if the running boom is entering kind of a normalization phase yes then in a flat market nike are going to have a far better opportunity i think of grabbing some of that market share back than they do in an accelerating one they just really need to sort out who they are and remember what the business was.

1:05:56Read every single person making a decision in that company. She'd just go back and read the book that their founder wrote as to what it means to wear Nike. Yeah. Good. Right. Well, we have another massive segment that we want to talk through that we're going to move on to Substack now on Women's Tennis WTA. I'm sure, did you, for the audience's sake, did you watch the women's final in the US Open? I actually didn't. Did you not? I'm ashamed to say. It was excellent. Yeah, it was excellent. but there are far bigger talking points happening within the women's game that we need to pick apart so we're going to do that on Substack for those of you that want to come over please do for those of you that don't thank you as always for joining us and we will see you next week thanks very much thanks for joining us for a big week with a fair bit of variety some real positives to take from the first two topics discussed and I'm sure the rest will inspire some thoughts and opinions we'll be heading over to Substack to look at what is happening with the WTA in tennis as they face the very real prospect of running out of money.

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