Nike Defends Pulling 'Betsy Ross' Sneaker as Arizona Governor Withdraws Aid -- Update
BY Dow Jones & Company, Inc.
— 7:56 PM ET 07/02/2019
By Khadeeja Safdar, Andrew Beaton and Cameron McWhirter
Nike Inc. (NKE) defended its decision to pull a July Fourth shoe from shelves after NFL-star-turned-activist Colin Kaepernick objected to the design, a move that stoked controversy inside and outside the sneaker giant.
Some Nike (NKE) employees said they were surprised by Mr. Kaepernick's involvement in the product, which featured a flag created during the American Revolution and commonly referred to as the Betsy Ross flag. The Nike (NKE) endorser was concerned about what he believed are its associations with an era of slavery and its adoption by some extremist groups, according to people familiar with the matter.
Nike's (NKE) private decision, revealed in a Wall Street Journal article Monday, sparked a national debate over the historic emblem. Arizona's governor pulled his support for a planned Nike (NKE) factory; New Mexico's governor invited the company to her state. So many social-media users weighed in to criticize or defend the move that colonial seamstress " Betsy Ross" was one of the most discussed topics on Twitter.
On Tuesday, Nike (NKE) said it is "proud of its American heritage" and made the decision "based on concerns that it could unintentionally offend and detract from the nation's patriotic holiday."
The company didn't send Mr. Kaepernick, a Nike (NKE) endorser, the shoe to approve, and he wasn't a planned part of its release, people familiar with the matter said. Athletes typically have a say only in products that bear their names, such as signature shoes for LeBron James.
Mr. Kaepernick, 31 years old, has gone unsigned by National Football League teams since 2016 when he catalyzed demonstrations during the national anthem to highlight social injustices and racial inequality, leading to a high- profile dispute with the league. He has grown to wield widespread influence, and his cause has resonated with many of Nike's (NKE) athletes and younger consumers. The shoe giant capitalized on Mr. Kaepernick's stature when it made him the face of a major advertising campaign last year, sparking backlash from some consumers and President Trump.
"When Colin Kaepernick is involved, it's well beyond lacing up a pair of sneakers," said Joe Favorito, a sports- media consultant who teaches at Columbia University. "To be able to influence that type of decision is pretty unusual."
Mr. Kaepernick saw the flag design after images began surfacing online late last month and raised concerns with a Nike (NKE) official, the people said. Within days, Nike (NKE) decided to pull the shoe. It couldn't be determined whether Nike (NKE) CEO Mark Parker was involved in the decision. Mr. Kaepernick declined to comment.
The sneaker, a version of the Air Max 1, was a limited release and wasn't intended to be widely distributed, the people said, so removing it didn't pose much financial risk for Nike (NKE). Such products are mostly sold on Nike's (NKE) own app or in specialty stores.
It was intended to be a re-release of a July Fourth shoe the company made more than 15 years ago. Unlike the original version, which used the modern U.S. flag, the latest featured the Betsy Ross flag.
Some extremist groups have tried to appropriate the Betsy Ross flag, but it isn't widely used by white nationalists or far-right groups as a rallying symbol, according to people who research American flags and those who track extremism.
"This is the first I've heard of it. This is a new one," said Peter Ansoff, president of the North American Vexillological Association, a group that studies historical and modern-day flags. He said the flag is common today as an emblem of the American Revolution.
Nike (NKE) decided to err on the side of caution and quietly asked retailers to ship the Betsy Ross flag sneakers back, the people said. Several employees at Nike (NKE) said they were unsure what made the design racist and questioned why the company pulled the shoe.
After critics called the company unpatriotic, Nike (NKE) said Tuesday it supports thousands of American athletes, including the U.S. Olympic and soccer teams, employs 35,000 people domestically and remains committed to creating jobs in the country.
The governor of Arizona seized on the controversy to announce he was withdrawing financial incentives the state had promised Nike (NKE) to open a plant. A spokeswoman for the Arizona Commerce Authority said it was withdrawing a grant of up to $1 million at the governor's direction.
"Words cannot express my disappointment at this terrible decision," Gov. Doug Ducey, a Republican, said in a string of messages on Twitter. "I am embarrassed for Nike (NKE)."
In response, New Mexico Gov. Michelle Lujan Grisham, a Democrat, took the opportunity to woo the company to her state. "Hey Nike (NKE), let's talk," she said in a tweet.
Nike (NKE) was considering a $185 million investment to open a manufacturing facility in Goodyear, Ariz., that would employ about 500 people, according to city records. On Monday, the Goodyear City Council approved a package of incentives that would reimburse the company about $1 million in planning fees and about $4,000 for each full-time employee Nike (NKE) hires, the records show.
Nike (NKE) said Tuesday it was committed to opening an additional U.S. manufacturing center that would create 500 new jobs. A spokeswoman didn't say whether Nike (NKE) would stick with the plans in Arizona.
In 2016, the superintendent of a Michigan school district apologized after students waved the flag at a high-school football game, saying that for some it is a symbol of white supremacy and nationalism, according to Mlive.com, a local news outlet. The local chapter of the NAACP said at the time that it has been appropriated by some extremist groups opposed to America's increasing diversity.
Far-right and white-nationalist groups often try to co-opt emblems, choosing images that can have two meanings -- one harmless and one potent -- said Kathleen Blee, a University of Pittsburgh sociologist who has written several books on racist groups. While she hadn't heard of the Betsy Ross flag being used widely by white nationalists or others, she said such groups are constantly searching for new images.
"It's a cat-and-mouse game," she said. "They are trying to signal things to insiders but, on the other hand, they are trying to bring more people into their conversation. Their symbols change all the time."
Although Nike (NKE) pulled the shoe, it did make it into the hands of some sneaker enthusiasts. It was being traded on StockX, an online marketplace, and sold for thousands of dollars Tuesday before the site prohibited further sales. "The sale of this product on our platform does not align with our value system," StockX CEO Scott Cutler said.
Write to Khadeeja Safdar at khadeeja.safdar@wsj.com, Andrew Beaton at andrew.beaton@wsj.com and Cameron McWhirter at cameron.mcwhirter@wsj.com
BY Dow Jones & Company, Inc.
— 7:56 PM ET 07/02/2019
By Khadeeja Safdar, Andrew Beaton and Cameron McWhirter
Nike Inc. (NKE) defended its decision to pull a July Fourth shoe from shelves after NFL-star-turned-activist Colin Kaepernick objected to the design, a move that stoked controversy inside and outside the sneaker giant.
Some Nike (NKE) employees said they were surprised by Mr. Kaepernick's involvement in the product, which featured a flag created during the American Revolution and commonly referred to as the Betsy Ross flag. The Nike (NKE) endorser was concerned about what he believed are its associations with an era of slavery and its adoption by some extremist groups, according to people familiar with the matter.
Nike's (NKE) private decision, revealed in a Wall Street Journal article Monday, sparked a national debate over the historic emblem. Arizona's governor pulled his support for a planned Nike (NKE) factory; New Mexico's governor invited the company to her state. So many social-media users weighed in to criticize or defend the move that colonial seamstress " Betsy Ross" was one of the most discussed topics on Twitter.
On Tuesday, Nike (NKE) said it is "proud of its American heritage" and made the decision "based on concerns that it could unintentionally offend and detract from the nation's patriotic holiday."
The company didn't send Mr. Kaepernick, a Nike (NKE) endorser, the shoe to approve, and he wasn't a planned part of its release, people familiar with the matter said. Athletes typically have a say only in products that bear their names, such as signature shoes for LeBron James.
Mr. Kaepernick, 31 years old, has gone unsigned by National Football League teams since 2016 when he catalyzed demonstrations during the national anthem to highlight social injustices and racial inequality, leading to a high- profile dispute with the league. He has grown to wield widespread influence, and his cause has resonated with many of Nike's (NKE) athletes and younger consumers. The shoe giant capitalized on Mr. Kaepernick's stature when it made him the face of a major advertising campaign last year, sparking backlash from some consumers and President Trump.
"When Colin Kaepernick is involved, it's well beyond lacing up a pair of sneakers," said Joe Favorito, a sports- media consultant who teaches at Columbia University. "To be able to influence that type of decision is pretty unusual."
Mr. Kaepernick saw the flag design after images began surfacing online late last month and raised concerns with a Nike (NKE) official, the people said. Within days, Nike (NKE) decided to pull the shoe. It couldn't be determined whether Nike (NKE) CEO Mark Parker was involved in the decision. Mr. Kaepernick declined to comment.
The sneaker, a version of the Air Max 1, was a limited release and wasn't intended to be widely distributed, the people said, so removing it didn't pose much financial risk for Nike (NKE). Such products are mostly sold on Nike's (NKE) own app or in specialty stores.
It was intended to be a re-release of a July Fourth shoe the company made more than 15 years ago. Unlike the original version, which used the modern U.S. flag, the latest featured the Betsy Ross flag.
Some extremist groups have tried to appropriate the Betsy Ross flag, but it isn't widely used by white nationalists or far-right groups as a rallying symbol, according to people who research American flags and those who track extremism.
"This is the first I've heard of it. This is a new one," said Peter Ansoff, president of the North American Vexillological Association, a group that studies historical and modern-day flags. He said the flag is common today as an emblem of the American Revolution.
Nike (NKE) decided to err on the side of caution and quietly asked retailers to ship the Betsy Ross flag sneakers back, the people said. Several employees at Nike (NKE) said they were unsure what made the design racist and questioned why the company pulled the shoe.
After critics called the company unpatriotic, Nike (NKE) said Tuesday it supports thousands of American athletes, including the U.S. Olympic and soccer teams, employs 35,000 people domestically and remains committed to creating jobs in the country.
The governor of Arizona seized on the controversy to announce he was withdrawing financial incentives the state had promised Nike (NKE) to open a plant. A spokeswoman for the Arizona Commerce Authority said it was withdrawing a grant of up to $1 million at the governor's direction.
"Words cannot express my disappointment at this terrible decision," Gov. Doug Ducey, a Republican, said in a string of messages on Twitter. "I am embarrassed for Nike (NKE)."
In response, New Mexico Gov. Michelle Lujan Grisham, a Democrat, took the opportunity to woo the company to her state. "Hey Nike (NKE), let's talk," she said in a tweet.
Nike (NKE) was considering a $185 million investment to open a manufacturing facility in Goodyear, Ariz., that would employ about 500 people, according to city records. On Monday, the Goodyear City Council approved a package of incentives that would reimburse the company about $1 million in planning fees and about $4,000 for each full-time employee Nike (NKE) hires, the records show.
Nike (NKE) said Tuesday it was committed to opening an additional U.S. manufacturing center that would create 500 new jobs. A spokeswoman didn't say whether Nike (NKE) would stick with the plans in Arizona.
In 2016, the superintendent of a Michigan school district apologized after students waved the flag at a high-school football game, saying that for some it is a symbol of white supremacy and nationalism, according to Mlive.com, a local news outlet. The local chapter of the NAACP said at the time that it has been appropriated by some extremist groups opposed to America's increasing diversity.
Far-right and white-nationalist groups often try to co-opt emblems, choosing images that can have two meanings -- one harmless and one potent -- said Kathleen Blee, a University of Pittsburgh sociologist who has written several books on racist groups. While she hadn't heard of the Betsy Ross flag being used widely by white nationalists or others, she said such groups are constantly searching for new images.
"It's a cat-and-mouse game," she said. "They are trying to signal things to insiders but, on the other hand, they are trying to bring more people into their conversation. Their symbols change all the time."
Although Nike (NKE) pulled the shoe, it did make it into the hands of some sneaker enthusiasts. It was being traded on StockX, an online marketplace, and sold for thousands of dollars Tuesday before the site prohibited further sales. "The sale of this product on our platform does not align with our value system," StockX CEO Scott Cutler said.
Write to Khadeeja Safdar at khadeeja.safdar@wsj.com, Andrew Beaton at andrew.beaton@wsj.com and Cameron McWhirter at cameron.mcwhirter@wsj.com
