Phil Knight: Nike, Oregon and Business As Usual

Nike co-founder Phil Knight (Kirby Lee - US Presswire)

A good title for a comprehensive book on entrepreneurial success would be: Philip Hampson Knight: a biography.

If Knight was a University of Washington supporter, not a University of Oregon supporter extrêmement généreux, every husky supporter would agree with the statement that Phil Knight did it right and, from an entrepreneurial perspective, continues to do so.

There is a problem at Oregon, however, and while the problem is certainly not limited to the university, Phil Knight is in an ideal position to implement and enhance the solution.

Knight’s contributions to Oregon have been more than financial.  For Oregon, Knight has also contributed conceptual strategy, extensive image remaking, and innovative recruiting psychology.  Comic books featuring recruits.

Normal brains couldn’t have done that.

Phil Knight’s brain, however, would be exceptional anywhere, and Phil Knight has the money to transform his inspiration and vision into reality.  Every good thing recently happening at Oregon has had Phil Knight’s hand on it.

Why the extensive involvement?

To simply suggest that billionaires have their toys – Paul Allen has the Seahawks and the Trailblazers, for example – is trite and not truly applicable to Knight’s relationship with Oregon.  Phil Knight simply has an unbridled passion, a love, for his undergraduate alma mater.

Loyal Washington fans subsequently demonize Phil Knight but, again, were Phil Knight’s passion and loyalty directed toward Washington, Husky fans might mention Phil Knight and Don James in the same breath.

Heresy?

Hardly.  Essentially, Knight is a very intelligent, savvy visionary who, in the eyes of Washington fans, happens to be backing the wrong horse.

In a sense, Knight is repaying a debt of gratitude to Oregon.  If it weren’t for Oregon, Nike wouldn’t have happened.  Phil Knight went to Oregon as middle distance runner, lettering three years with a best time of 4:10 minute in the mile.  The coach was Bill Bowerman, head Oregon track coach from 1948 to 1972, who had four NCAA championship teams and 64 All-Americans during his career.  By the time Knight graduated from Oregon, the name Bowerman was eponymous with track and field in the United States.

After serving a year on army active duty, Knight went to Stanford Business School where he concluded in a Small Business class that the word best describing him was “entrepreneur.”  His passion was still running.  His master’s thesis was entitled, “Can Japanese Sports Shoes Do to German Sports Shoes What Japanese Cameras Did to German Cameras?”  Knight thought so.  After getting his MBA in 1962, Knight, the entrepreneur, was anxious to find out.

Knight approached Bowerman with Knight’s idea for revolutionizing running shoes in the U.S., inviting Bowerman to contribute some of Bowerman’s ideas about shoe design.  Excited by the prospects, Bowerman not only agreed to help work on shoe designs but lent his name, reputation and credibility to the effort.  It was Bowerman and Knight.

Initially, the Bowerman/Knight enterprise was called Blue Ribbon Sports but later changed to Nike, renamed after the winged Greek goddess of victory.

Time progressed, Bowerman eventually retired but, with Knight at the steering wheel, Nike continued to grow.  And grow.  And became one of the top shoe designers, manufacturers and marketers in the world.  Sort of.  Like competing shoe companies, Nike doesn’t directly manufacture their shoes.

In the mid-1990’s, “progressive” gadfly Michael Moore attempted to obtain interviews with greedy capitalist entrepreneurs throughout the U.S. but no one would talk to him…except Phil Knight.  Having Moore criticize a business operation is analogous to having Wallis Simpson (former Duchess of Windsor) criticize the British monarchy.  Knight somewhat naïvely believed he had nothing to worry about because he was understandably proud of Nike, believed any criticism was undeserved, and he could prove it.

But that’s not what Michael Moore is about.  Moore reflexively called into question “Nike labor practices” and use of foreign manufacturers, implying things that weren’t necessarily true.

Knight countered that Nike does not own any of the factories but if Moore built a factory in the U.S. that could compete with foreign manufacturers, Knight would use Moore to manufacture Nike shoes, and any question about labor problems would be moot.

In theory, it was a golden opportunity for Moore: a chance for patriotism and providing a solution to a problem while making money.  But, again, solutions, productivity, are not what Moore is about.  Moore is an American entrepreneur who makes movies critical of American entrepreneurs.

While those who would not consent to interview with Moore remained unscathed, Nike briefly became the bete noir du jour (it’s a pun).  Excited labor leaders grabbed the opportunity.  Even Jay Leno jumped on the wave, hammering Nike in a monologue.

Anti-Oregon fans bruited the phrase “slave labor” although none knew what the hell they were talking about.  Nonetheless, Moore’s crusade had spotlighted the issue.  So Nike monitored their manufacturers, requiring minimum age limits, factory safety standards, and reasonable working hours.  Not much changed because Moore’s implications were overstated.

Moore went on to make other films all indirectly featuring Michael Moore.

Meanwhile, back in Eugene, with assistance from Nike, Oregon recruiting innovation blossomed.  Michael Moore never asked whether a star high school football player could be swayed by a gift of Nike shoes?  From Nike’s perspective, everyone should be swayed by Nike shoes.  Nike’s strategy is simple: identify a common group of people participating in a certain sport, and design a shoe for them.  Demand, here, meet Supply.  They’ve even designed limited edition shoes specifically for the Pit Crew, Oregon students in the student section.  The shoes are functional, attractive and can be earned through attendance and proper behavior at games.

Oregon gives Nike shoes to recruits as well.  A few years back, my youngest son, Max, was friends with Lake City High (Coeur d’Alene) offensive lineman Carson York who was being heavily recruited by Oregon.  Returning from his official visit, York showed Nike shoes and other gifts, and York had a photo of the gifts on his Facebook page for a while.  Whether York was ultimately swayed by Nike products is conjectural but that the 17-year-old seemed quite enthused at the time is not.

DeAnthony Thomas was enthused too.  Unexpectedly so.  He had been verbally committed to USC for 10 months.  Why did he change his mind at the last moment?  On the day he switched, Thomas volunteered one non-reason: “A lot of people say I’m going to Oregon because of Nike.  I’m not going for Nike. I’m going to be a baller.”  But “a lot of people” hadn’t said that.  They hadn’t had time to say that.  Yet.  A perplexed Lane Kiffin, on the other hand, said, “He was telling other guys to come to ’SC.  We don’t know what happened.”

Something happened.

It wasn’t like Oregon, after waiting until the last moment, all of a sudden swooped down out of the nearest Crenshaw palm tree, bearing gold, frankincense and myrrh.  They’d been on Thomas as long as USC.  Something happened and, while nothing has surfaced publicly, Thomas’s immediate denial of what changed his mind is prima facie evidence of what changed his mind.  Based on Phil Knight’s modus operandi, however, it was perfectly legal, whatever it was.

Phil Knight is sensitive to image and marketing, and Nike is outstanding at marketing.  At the same time, Knight goes by the letter of the law and suggestions that Nike does things illegally have no substance.  Adhering to the letter-of-the-law is commendable but the law is elusive and, as anyone with a sense of reality knows, 1) we are no longer a nation of laws but a nation of lawyers, 2) better lawyers are expensive, and, other things being equal (or unequal), legal decisions in general favor the side with the most money, and 3) as a consequence, what will ultimately be ruled in court can be anyone’s guess.  Nike has both money and lawyers, and enjoys relatively strong corporate legal security.  Phil Knight is, therefore, in a good position to take chances based on expediency.  Therein lies the common flaw.

How Knight thinks was evident from his Joe Paterno eulogy where he defended Paterno, saying Paterno notified the athletic director about accused pedophile Jerry Sandusky and, therefore, was absolved of any wrongdoing.  Ultimately, Paterno was also a victim.

“If there was a villain in this tragedy, it lies in that investigation, not in Joe Paterno’s response to it,” said Knight.  That remark garnered a standing ovation.

But, no, it was Paterno’s response.  Or, more to the point, lack of response.

After being confronted for the second time in 1998 by the mother of one of his victims, Sandusky was reported to have said to her, “I wish I was dead.”  If he truly had such remorse, and those who knew about his proclivity had acted, subsequent pedophilic acts may not have occurred.  I know a man who, as a boy, was raped by an older man.  Besides the despicable heinousness of the act itself, young boys who get raped grow up with problems they should not have.  Sandusky needed to be stopped – even he knew that.

Imagine Gil Dobie, Jim Owens, Don James, Jim Lambright, Keith Gilbertson or Steve Sarkisian discovering that a former assistant coach was performing pedophilic acts in the Husky football facilities, and doing nothing other than notifying the athletic director.

Whose football program is it?

An inner sense of outrage, moral obligation at least, would have driven them far beyond that.  In contrast, interestingly, Knight thought the same way as Paterno.  Notify the chain of command, and you’re legally uninvolved.

Legally, perhaps, but morally, no, you’re not uninvolved.  Kids need men willing to step to the fore.  That’s why the Penn State Board of Trustees dismissed Paterno, believing he had a moral (there’s that annoying word again) obligation to go much further than he did.

If Knight meant what he said, and since Knight and Oregon athletics are interminably intertwined, after leaving Penn State, perhaps Sandusky missed the boat by not applying to Oregon.  Based on the implicit premise of Knight’s eulogy, Sandusky would have only legal obstacles, not an issue of morality, to worry about.  As it is, between the “legal” mindset, and the American legal system, Sandusky’s present obstacles are only legal – but a competent legal team can breech most, perhaps all, of those.

Meanwhile, Oregon continues to exercise recruiting innovation.  The reader can provide the examples – it’s not like they’re never discussed.  And it’s probably all legal.  If not, the fault lies with Oregon Head Coach Chip Kelly, not Phil Knight.

From my distant perspective, Phil Knight is basically a good man with uncommon gifts in organization, innovation and marketing but who is misled by a legal mindset – it pervades corporate America; Knight isn’t alone – that needs to be tempered by conscience.  A CEO myself, a businessman for over 40 years, my perception is that the business world needs fewer lawyers and more individual moral integrity.  Inwardly, I believe Jerry Sandusky, in spite of (or, perhaps, because of) his monstrous sins, knows what I mean.  I have no doubt that Phil Knight does too.  At the risk of sounding naïve, in the near future hopefully both will embrace their conscience and follow its direction, especially Knight who is in a position to make the world a much better place, a place where the Jerry Sanduskys would be self-governing, not daring to do what they do.

Topics: Bill Bowerman, Blue Ribbon Sports, Chip Kelly, DeAnthony Thomas, Huskies, Joe Paterno, Michael Moore, Nike, Oregon, Oregon Recruiting, Oregon Sanctions, Phil Knight, Wallis Simpson, Washington

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  • JimBasnight

    Carl,
    I usually enjoy your very literate pieces, which never bore me with their references and unusual sprorts imagely. I especially like the use of French. This one is way off the mark though.
     
    Knight is really bad and if he were a UW alum I would feel the same way as I do about much more innocuous UW booster types that I follow. Knight’s use of sweatshop labor is very bad, but that is not what bothers me. It is more just symptomatic of a much larger problem.
     
    I cover it a lot more on huskydigest.com, but to summarize, Nike and adidas are the lynchpins in a systen that has almost completely corrupted college sports. I’ll leave it at that and allow you to do the reseasrch that you need to do before covering a subject like this.
     
    If you have any questions, feel free to message me at [email protected].

  • LAlaw

    Your story sounds pretty good except for several errors.
    1) The comic books were not the brainchild of Phil Knight. They were the ingenious product of the University of Oregon’s highly innovative Warsaw School of Sports Marketing. Oregon had to stop using them when the NCAA ruled it created an unfair recruiting advantage.
    2) Neither Oregon, Phil Knight, nor Nike gave Carson York or DeAnthony Thomas shoes or apparel of any kind. Any apparel they have must be purchased prior to enrolling. Thereafter, Nike gives Oregon and Washington and every other PAC-12 school except UCLA and Utah as much gear as they require in return for licensing rights to sales of apparel to students and fans bearing the schools logo and image. The largest of these Nike contracts is with USC — not Oregon. Nike does this with the schools, not with the school’s athletes.
    3) Oregon never recruited DeAnthony Thomas and this is well documented. He wasn’t even on their recruiting board as a target because he committed to USC so early and was steadfast about it. Oregon’s first contact with Thomas was the week prior to signing day when Thomas called Oregon and expressed his desire to visit that weekend. I’m sure the Huskies would have said no, but Oregon joyfully accepted the chance to get Thomas.
    4) Finally, Kiffen can express whatever bewildered view he may have and imply whatever intrigue his clouded mind could endorse but the fact is a kid changed his mind and followed his own path instead of the crowd. It happens. Washington hired a renowned recruiter from Cal and suddenly some highly ranked recruits switched allegences and signed with UW. Certainly there is all kinds of intrigue in those events but that doesn’t mean there actually was any wrongdoing. 18 year old kids change their minds and it isn’t for the same pair of shoes they would get at all Nike schools.

    Phil Knight does a lot for Oregon. He’s given his Alma Mater world class facilities. Before those gifts, Oregon had just about the worst in the nation (and certainly in the PAC-10 as it was known then). Track the growth of Oregon’s facilities and you will track Oregon’s rise in football. It’s very well documented. But don’t just make up events to suit a convenient premise.

  • huskyhaul

    Thanks for the reply. Carl is in Virigina and will get back with you shortly! :) 

  • huskylenz

    Here is my issue with Phil Knight and Oregon. Oregon is one of the lowest rated academic schools in the Pac-12. Oregon recently “rose” to number 111 in the USNWR’s rankings and was in the 250 range on the World Academic Rankings list. Compare that to the rest of the Pac-12, where every university other than Oregon State and Washington State ranked in the Top 100 and UW ranked #23.
     
    Of course, Phil Knight has no control over state funding. But, Paul Allen and Bill Gates built libraries and teaching halls on UW’s campus. Allen is a huge sports fan, but he does not supply UW with money for its athletics, he supplies them money to teach students.
     
    Maybe I am way off, but when I hear Knight’s name, I hear about new arenas, new locker rooms, new uniforms. He has donated $230 million to Oregon, mostly for athletics and pledged $100 million more to the Oregon Athletics Legacy Fund.
     
    What I do not hear much about is him trying to prop up one of the weakest major universities on the west coast. Maybe if he cared so much he might try to improve the education of the students there, not just the football and basketball players.
     
    To his credit, he did donate $105 million to STANFORD’s business school and another $100 million to the Oregon Health Science University in Portland to combat cancer.

    • BradDexter

      @huskylenz

    • BradDexter

      @huskylenz That post above was for you btw…get your facts straight if you are gonna started foamin at the mouth. Just go to the US News Website lol

      • huskylenz

         @BradDexter  Yeah, why don’t you check out the Academic Rankings of World Universities and the Times High Education World Rankings. UW #23 and #25, Oregon #250 and not even listed in top 400. Sorry…You Lose.

    • jaydoubleu75

       @huskylenz The library on the University of Oregon campus is called The Knight Library for a reason.

  • GregTippett

    Jabber jabber, jabber -  it seems like everyone thinks Phil Knight is “the University of Oregon”.   Each time I read a “Washington Husky” perspective on Phil Knight, it all comes down to him money and influence he has on Oregon sports.  Phil Knight give money to Stanford, and to various charitable organizations, and to many sports organizations across this nation.   He’s a very loving and giving man.   No, I doubt if he will give much to Washington – but Washington has it’s own money purse.  As for DeAnthony Thomas, he’s a duck for one reason -  he wanted to be one.   This kid could have stayed in SC and beat Washington, but he chose to be a duck – and beat Washington.   Why does Washington need to have a reason for this kid to come up to Oregon…..?   And if you think you can write a long essay on the topic, and bait us all with the idea he wanted new shoes, get real.

  • JimBasnight

    Nike and adidas are the prime reason and cheif facilitators of corruption in college sports. Nike, through Phil Knight, have a double conflict when it comes to Oregon. Case closed, I’m out and if you have anything more to say address me directly.

  • JimBasnight

    Nike and adidas are the prime reason and chief facilitators of corruption in college sports. Nike, through Phil Knight, have a double conflict when it comes to Oregon. Case closed, I’m out and if you have anything more to say address me directly. I don’t want to have this conversation here. If one of the mods here want to run with this I hope I did something to further the discussion.

  • BradDexter

    Whoops, bad info by this fellow. Unless US News started doing mid year data you need to check your data. Right now they rate the UO in pretty much the same spot as U C Boulder…ahead of the following, Utah, Arizona, Arizona State, Oregon State, ans WSU..I think that puts UO pretty squarely in the middle of the PAC-12. Sorry you are wrong, but facts are facts. They also don’t have UW at 23…thats where USC is. Go to their site lol. UW is a good school mainly on the back of it’s med school, if OHSU hadn’t gone private and the Oregon State Board of higher Ed would stay out of the you can’t teach this but not that game the two schools would probably be pretty darn even. Once again, sorry to ruin your rant with facts. Have a nice day.

  • huskylenz

    You are hilarious BradDexter to even imply that Oregon and UW are on the same academic plain. Check out the Academy Rankings of World Universities (UW #23 and Oregon #250) and The Times Higher Education World Rankings (UW #25 and Oregon ummm not listed in top 400).
     
    Come back when Oregon means something…

  • huskylenz

    BTW- Here is the official publication by the Pac-12 on its academic merits. Oregon not listed:
     
    http://pac-12.org/SoccerM/Tabid/1456/Article/136438/Among-The-Best.aspx

    • BradDexter

       @huskylenz  thats reputable…haha you are becoming a joke very quickly.

    • BradDexter

       @huskylenz thats not the pac 12..its an asian university.  the pac 12 is just repeating it hahahahahaha

  • huskylenz
    • BradDexter

       @huskylenz 
       
      Well, I see you do not read very well.  Oh well.   Guess you didn’t read everything I wrote or else just have a hard time understanding basic concepts. 
       
      Moving on, US news is a very reputable source Ill give you that.  Actually the most reputable in terms of college rankings.  Too bad you guys used rankings from a few years back…haha..guess it makes your point.  Anyway, here are the current rankings validatin what I wrote as fact.
       
      these are the 2012 rankings
       
      http://colleges.usnews.rankingsandreviews.com/best-colleges/rankings/national-universities/page+11
       
      Pac-12 breaks down like this
       
      tier I Ivy League level U’s top 20
      Cal, Stanford
      tier II excellent20-40
      USC
      UCLA
      tier III rated # 42 very good state School
      UW
      tier IIII good state schools
      Colorado #94
      UO #101
      Utah and AZ #116-120
       
      tier V lower then first tier in US News and report
      OSU, WSU, ASU
       
      So I was correct in that in the most reputable rankings Colorado and Oregon are smack in the middle of the Pac…this with OHSU going private and UO fighting the crazy whack liberal Oregon State board. How many ranking spots would OHSU be worth alone?  At least 40.  Your Med school and solid Engineering  makes you.  trust me, most classes and subjects are the exact same at both Schools.  just admit you either lied or were wrong and move on, son.  I will give you the bnefit that you can comprehend basic logic lol

      • huskylenz

         @BradDexter
         So, I went to the link provided above and clicked on USNWR’s Top 400 schools in the world. UW came out #56.
         
        I searched all 400 universities and Oregon was not included in the list.
         
        Again, you fail.

      • huskylenz

         @BradDexter I also went to the national rankings of USNWR and UW was ranked #42 in the United States and Oregon was in an 8-way tie for #101.

  • huskyhaul

    From Carl: 
     
    “Thank you for your comments.
    I was led to believe Phil Knight was behind the comic book idea and, from my perspective, that type of innovation would be evidence of Knight involvement.  If Knight was not the brain behind this, I stand corrected.
    Carson York said what he said.  At the time I questioned what I was being told but was assured, yup, he said the stuff was free.
    With respect to DeAnthony Thomas, I hope we can all agree that something happened.  There’s evidence.  He signed with Oregon.  I’m not sure how “Oregon never recruited DeAnthony Thomas” can be well documented.  How do you document something you’re not doing?  I’m not going to Kauai in June but I’d have a tough time documenting a not-trip.    Thomas made a big splash as a sophomore winning the state 100 meter championship, and Pac-10 (at the time) schools were on him.  Oregon, a team that is particularly sensitive to the need for speed, would have been an odd exception.
    Regardless of what one may think of Lane Kiffin or USC, Lane Kiffin’s mind is neither “bewildered” nor “clouded.”
    “But don’t just make up events to suit a convenient premise.”  There was no convenient premise.  Although I may have been in error on the comic book issue, nothing was “made up.”
    Thanks again for your comments.”

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