Athletic Apparel Company Nike Is Now Involved In Two Huge Scandals


Athletic Apparel Company Nike Is Now Involved In Two Huge Scandals

Nike's iconic swoosh brand may be significantly weakened over the summer as the company is embroiled in bribery and doping allegations, exposing a cutthroat culture that will do anything to win.

“Behind sponsorship is the idea that you are trying to borrow associations from the properties you are sponsoring,” said Dr Leah Donlan, of Manchester Business School. “If people start to develop negative associations about those properties, it is reasonable to expect that they might start to project those negative views on to the Nike brand.”

The most notable, and yet to be fully exposed, controversy relates to the indictment filed by the U.S. Department of Justice against 14 FIFA officials and marketing executives.

The allegations, starting in 1996, show “Company A” – Nike – agreeing to pay $40m in “marketing fees” to the Swiss bank account of an affiliate of Brazilian sports marketing firm Traffic “on top of the $160m it was obligated to pay”, in order to secure the sponsorship of the Brazilian football team.

The indictment also shwos that Traffic billed the company for an additional $30m in fees between 1996 and 1999, fees which are now considered to be bribes.

Nike has strongly defended itself against the allegations, arguing the fees were just routine sponsorship agreements.

Yet the U.S. investigation has prompted the Brazilian Senate to revisit its own inquiry, started 15 years ago, which revealed Nike’s unusually powerful influence over the Brazilian team.

Nike's deal allowed it to arrange five friendly matches a year for the team and was even allowed to select the opponents and players for the so-called “Nike games”.

Nike may have even selected Brazil’s star striker, Ronaldo, for the 1998 World Cup final, even though he was ill.

But Nike's dirty dealings don't end there, as reports emerged that star running coach Alberto Salazar, considered America’s most powerful running coach, has encouraged one of his top runners, Olympic silver medalist Galen Rupp, to use banned substances.

The news has prompted U.S. Olympic runner Kara Goucher and at least six other former Salazar athletes and members of staff to meet with the U.S. Anti-Doping Agency over their concerns.

Nike has been involved with many doping scandals. Salazar coached Mary Decker-Slaney tested positive for testosterone, and Nike helped fund her legal challenge against a ban.

Nike was also the number one sponsor of Lance Armstrong, the biggest athletic cheater in history.

While brand experts point out the damage such allegations could do to the powerful brand, they also point out that Nike has an uncanny ability to associate itself with controversial athletes. It recent signed two time banned doper Justin Gatlin, despite his lengthy history of cheating.

The more damaging move could be an indictment by U.S. prosecutors. The FBI investigation into the FIFA scandal continues and as more of those indicted cooperate with the feds, there could be more evidence that is used to indict Nike.

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