After Nike’s End of Tiger Woods’ Partnership, More Cuts to Follow in Soccer as Part of $2B in Cost Cutting

Published 01/09/2024, 12:53 AM EST

Just hours ago, news broke that golf icon Tiger Woods had parted ways with Nike. After being together for over 27 years since 1996, Mr. T will no longer don the iconic ‘swoosh‘. As this seismic shift resonates, the soccer world braces itself for its own set of chaos, including the possibility of becoming a casualty in Nike’s massive $2 billion cost-cutting strategy. In the billion-dollar saving initiative by the American giant, they not only aim to cut major costs in 3 years but also regain their dominance and lost momentum in the sporting world.

Notably, soccer has mostly been sponsored by Nike, with countless renowned teams, leagues, and players earning significant contracts. However, in the past few years, they have subsequently been losing clients. Examples are a lot, with the likes of Neymar and Jack Grealish, and teams like Manchester City also signing with Puma. Notably, Nike expects to reportedly incur restructuring charges of up to $450 million by the end of the quarter on February 28. These costs, which are mainly related to severance fees, suggest that the Oregon-based corporation is cutting back on employees significantly as well.

As of now, the executives at Nike have not yet provided specifics on the $2 billion savings plan. They have, however, indicated that the company is open to various approaches for achieving this goal, as per The Oregonian. These approaches may include cutting back on the number of products offered, reducing the organizational structure, and getting rid of management tiers. Nike had previously projected severance expenses between $200 million and $250 million in 2020, when it laid off 700 employees. Moreover, Nike lowered its sales prediction to roughly 1% growth for the fiscal year that ends on May 31, as per a recent report as of November 30.

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Within an hour after the earnings report’s release, after-hours trading on the shares saw a 10% decline. Putting aside the numbers, why is Nike gradually losing interest in soccer? Is it men’s soccer or all of soccer? Had this question not occurred to you in the past, here are a few instances of the same below.

Nike visibly steers away from soccer—the beautiful game?

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Nike has seemingly been overtaken by its arch-rivals. In fact, the trend might continue in the coming years. Puma is reportedly eyeing Ronaldo’s national side, Portugal, FC Barcelona, RB Leipzig, and the Premier League. Likewise, their failure to provide a fresh contract to Manchester United saw the Red Devils bag one of the biggest deals by Adidas. Additionally, Harry Kane was recently snapped by Sketchers. One of the reasons to justify Nike’s stepback is that they might be steering away just from men’s soccer as a whole.

This comes after the American brand earlier announced in 2019 that it would intensify its focus on women’s football and broaden its commitment to other sports. That was visible during the 2019 FIFA Women’s World Cup and now the brand is even offering a lot in trail running and basketball. Although Nike still partners with some revered clients like Kylian Mbappe, Erling Haaland, Jamal Musiala, and Vinicius Jr., whom they consider marketable players, the scarcity of their sponsorship in men’s soccer is now visible.

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We would like to hear your take on Nike’s downsizing towards soccer. Let us know in the comments.

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Written by:

I first kicked a soccer ball when I was 12. My early exposure to playing the sport earned me many accolades at the zonal and district levels. I still remember my first goal, where I scored a 90+5 minute header like Sergio Ramos did in the 2014 Champions League final against Atletico Madrid.

Edited by:

Daniel D'Cruz

After Nike’s End of Tiger Woods’ Partnership, More Cuts to Follow in Soccer as Part of $2B in Cost Cutting

Nike visibly steers away from soccer—the beautiful game?

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