FOS PM: Nike Ramps Up Production – Front Office Sports

November 3, 2021

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NFL ratings continue to soar as the league experiences its best game viewership since the 2015 season — averaging 16.5 million viewers through Week 8. Games on networks were averaging 15.1 million viewers at this point in 2020. 🚀Software Scanner Link

Nike received good news from its Vietnamese subcontractors as it announced an increasingly rare retail partnership.

The subcontractors Nike and other leading shoe brands depend on have reopened in Vietnam. Around 70-80% of the factory workforce have returned in the country’s southern regions.

The Pou Chen Corp., a major Nike manufacturing partner, initially had only 20-30% of its workforce return when factories reopened in October, creating a shortage of around 40,000 workers. Pou Chen closed its Ho Chi Minh City factory in July due to rising COVID-19 cases.

Nike plans to invest further into production in Vietnam, according to a Vietnamese government website.

In the U.S., Nike continues to reconfigure how it sells its shoes and apparel.

• On Wednesday, the company announced a partnership with Dick’s Sporting Goods that will link their membership programs and put exclusive Nike shoes and apparel for sale on Dick’s website.
• Eventually, the two companies could team up to offer in-person workouts and allow customers to pick up and return Nike orders at Dick’s stores.
• Nike has been cutting off relationships with other third-party retailers to focus on direct-to-consumer sales.

Wholesale accounted for 61% of the Nike brand’s total sales of $42.3 billion in the fiscal year ending May 31, down from 65% the previous year.

Discovery reported a 23% year-over-year increase in revenue to $3.15 billion and a total of 20 million paying subscribers in Wednesday’s third-quarter earnings report.

The 3 million subscribers added in the quarter were largely due to Discovery’s broadcasting of the Tokyo Olympics in Europe. It has a $1.5 billion deal for European rights to the 2018-2024 Olympic Games.

The company said it “reached over 372 million people in Europe across TV and digital platforms, and delivered 1.3 billion minutes of Olympics content” on its streaming services during the Summer Games. 

U.S. advertising and distribution revenue increased a respective 5% and 21% during the quarter, while international ad and distribution revenue rose 28% and 7%.

Expenses from the Olympics and streaming growth offset the success.

• The platform’s year-over-year earnings fell to $156 million in Q3, down from $300 million.
• Discovery’s linear subscribers dropped 8% year-over-year, partially due to the sale of its Great American Country network.
• U.S. operating expenses increased 26% to $895 million, and international operating expenses skyrocketed to $1.27 billion — up 77%.

The broadcaster has a merger pending with AT&T’s WarnerMedia. The combined company is expected to have $52 billion in revenue next year.

NBA star Kevin Durant has launched Infinite Acquisition Corp., a blank-check company that filed for a $200 million initial public offering on Wednesday.

The SPAC will sell 20 million shares at $10 apiece and has pledged to redeem 100% of the shares for cash if it fails to acquire a company to take public within 18 months of its IPO.

Infinite will focus on acquisitions in sports, e-commerce, and cryptocurrency.

Durant serves as co-CEO of Infinite with Rich Kleiman, his business partner in Thirty Five Ventures, a VC firm launched by the duo in 2016.

Infinite adds to Durant’s growing list of investments in sports and tech.

• In March, he invested in Andbox, an esports organization and team operator.
• He took part in a $3.5 million seed funding round for Just Women’s Sports in May.
• He participated in a Series B round in July for OpenSea, an auction platform for NFTs.
• He joined in a $15 million round for collectibles trading app Rally in October.
• The same month, he was part of a group that invested $100 million in SeatGeek.

The two-time NBA champion is set to earn $87.9 million in 2021-22 between his $40.9 million salary and an estimated $47 million from off-court ventures.