CAUGHT IN THE HYPE?

CAUGHT IN THE HYPE?

By Jim “Gymbeaux” Brown, August 5, 2016

What do all these people have in common?

Tiger Woods, Stewart Cink, Anthony Kim, Justin Leonard, Michael Jordan, Rory Mcllroy, Nick Watney, Charl Schwartzel, Michelle Wie, Suzann Pettersen, Carmelo Anthony, Derek Jeter, Chris Paul, Ray Allen, DJ Augustin, Mike Bibby, Dre Bly, Michael Finley, Richard Hamilton, April Holmes, Juwan Howard, Joe Johnson, Andruw Jones, Kevin Martin, Quentin Richardson, CC Sabathia, Bobby Simmons, Jason Taylor, Gerald Wallace, Josh Howard, Michael Crabtree, Dwight Freeney, LaMarr Woodley, Cristiano Ronaldo, Wayne Rooney, Didier Drogba, Adam Jones, Evan Longoria, Giancarlo Stanton, and Andrew McCutchen

Honestly, I don’t even know who some of these people are let alone what they may have in common but I checked.  While this is an extensive list, I am certain that some are  no longer on the list and others have been added.

What do they have in common?  They either are or were all sponsored by Nike®.  Why is that important?  To all of them it is important because they receive MILLIONS of dollars from Nike® because of who they are and far more importantly, WHO THEY INFLUENCE to want, not necessarily buy, but who wants the NIKE® products they sell.  Mostly children and very young adults.  For example, if you want the shoes that someone like Michael Jordan, Tiger Woods or Michelle Wie wear, you will have to pay top dollar to buy them when there are obviously other shoes on the market that are equally as good or maybe even better at much lower prices.  Therefore, while Nike® pays these athletes MILLIONS OF DOLLARS to wear and promote their products or for this example, their shoes, who REALLY pays these athletes to wear the NIKE® brand?  THE PEOPLE WHO BUY THEM!

I do not intend to pick on or single out NIKE®, on the contrary, they represent just one company and there are hundreds of companies just like NIKE® for certain. 

There is something really wrong with this picture when you fully analyze it.  Let’s say for example that a pair of shoes worn by one of these athletes retails for $100.00.  How much do you think the shoe actually costs to produce?

Here is a web site http://thinkprogress.org/culture/2015/10/04/3708914/stephon-marbury-shoe-rerelease/ that indicates that it costs just $5.00 to $30.00 to actually produce a pair of Air Jordans.  That means that for every pair of Air Jordans that is sold for $100.00 (more often much more), NIKE® on paper makes $70.00 in raw profit.  Every business is in business to earn a profit, that is not the point or in dispute.  The point is that if you knew that a pair of shoes costs only $5.00 to $30.00 to produce, why on Earth would you spend $100.00 or more just because an athlete promotes the product?  It makes no sense.  Question:  Do you think one of these athletes would wear the NIKE® brand if they were not being paid to do so?  I seriously doubt it.  They would go to another brand/company who agreed to pay them to wear THEIR shoes, shirts, hats, clubs, glove, bat, etc.  Does that mean the equipment they wear is worn because it enhances their ability to play a sport?  Of course not.  If it did, do you not think EVERY athlete would be wearing the same pair of basketball or golf shoes? 

It gets even worse, at least in my opinion.  The next time you are in a store that sells tennis shoes, no matter what their intended purpose (basketball, running, exercise, etc), check the label to determine where they were made.  To some this might not be important.  To others it is critical.  Most tennis shoes are made in one of several Asian markets.  That in of itself is not the critical point I want to make.  The CRITICAL point is that they are being made under conditions that most America workers would consider deplorable either because of the rate of pay,  and/or the actual working conditions.  That is why it is becoming more difficult to “Buy American” because so many of the products we want are no longer made in America.  Why do you suppose that is?  The NIKE® example is just one of the reasons.  It is far cheaper to make the products overseas in countries that take advantage of the low wages and working conditions in exchange for making obscene profits on the sale of each pair of shoes.  I do not know of what business you may be engaged in, but I am certain you would like to make $70.00 on a pair of shoes you sell that only costs $5.00 to $30.00 to make.  Who are the real winners in this situation?  The athletes of course; far more than even NIKE® for they have do nothing to actually earn that money other than just wear or use the product.

Here is a web site that lists shoes made in America.  To my surprise there are more than I would have imagined.  I seriously doubt, however, that you will see any of them being worn by athletes who are paid to wear the more famous footware.  This does not only apply just to shoes, it applies to all types of clothing and athletic equipment.  http://www.usalovelist.com/american-made-shoes-ultimate-source-list/

Now comes the real rub for me.  Have you seen the advertisements featuring Hall of Famer Bret Farve promoting a “new” razor to keep you clean shaven and looking more handsome and more professional in your appearance?  Have you seen Bret Farve today as he prepares to accept his Hall of Fame Award?  Just in case you may have missed it…

Who’s kidding whom?  I could not help but wonder how much he is being paid to promote a product that he obviously does not use.  I could also not help but wonder how many people have been suckered in by his obviously misleading commercials?  It’s all about the money, not the product or even his personal likes.  I’d be smiling too!

Another great example occurred a lot of years ago at the PGA’s New Orleans Open where I and a bunch of Coast Guard folks worked as Marshalls.  At the time professional golfer Lee Trevino advertised products under the name of Shakespeare.  At the Open he hit a shot near where I was standing along the ropes keeping the spectators on one side and the players on the other.  One spectator looked down and saw Trevino’s golf ball which at that time was a Titleist, a ball used more on the PGA Tour than any other.  The spectator said, (I heard him), “That’s not a Shakespear!?  Trevino looked up at him and said and I quote, “Do I look like a fool to you?”  Meaning he was being paid to say one thing in the commercials but played what he obviously considered a better ball for which he was not being paid to play.

One more item, not to just pick on NIKE® but have you noticed the number of professionals and collegiate uniforms that display the NIKE® “swoosh?”  That does not come without a cost.  The organizations like the NFL want you to pay upwards of $80.00 for an “official NFL®” team polo shirt or $25.00 for a bobble-head doll.  There is no way that shirt costs $80.00 to produce.  The difference between the cost of production and the end price of $80.00 is for both NIKE® and the NFL® to take advantage of the consumer desire for the product, a desire created by the NFL and NIKE®, good for them.

It is a vicious cycle.  First they create the demand for the product no matter its cost.  But first they agree to pay its sponsoring athletes horrendous amounts of money to promote their product thus creating the demand.  Then the consumer buys the product at highly overpriced prices (when compared to actual production costs).  That makes money for the company who then does the same thing with other athletes thus adding an even higher price for their products because they have to pay additional sponsoring athletes/teams.  But it does not stop at a pair of shoes or shirt.  Have you wondered why ticket prices are so high to watch in person your favorite team or athlete?  We complain about paying a labor charge of $80.00 to get our cars repaired but think nothing of paying $80.00 for a ticket to a professional football game. 

Final thought.  If you want to become independently wealthy, become a professional athlete or a movie/TV actor OR you can learn to be more frugal about what you spend your money on.  For example, you can spend the $80.00 for a team logo shirt OR you can go to a local department type store or a Big Box store and buy a polo shirt in your team’s colors for less than $20.00; you just made $60.00 on the transaction.  How many hours would you have to work at your job to make $60.00?  How about $80.00?  I cannot think of a bigger waste of money than buying an 8-year old child expensive tennis shoes because a professional athlete wears them (makes money off them) when the shoes will probably not fit the child in 6 to 10 months as his or her feet grow larger.  

Am I missing something?