It was 1.08 pm that Monday afternoon at Wimbledon. 20-time Grand Slam winner Roger Federer shocked the entire sporting world when he walked out on to the tennis courts in Uniqlo attire. The familiar Nike swoosh that had been an intrinsic part of the champion’s all-white court ensemble for 21 years was missing. The powerful red Nike swooshes on the left breast, left shoulder, shorts and head band had been replaced by small, red squares that inside read, ‘UNIQLO’. As USA Today commented, “In a fashion reveal that had all the drama of Rihanna stepping on the red carpet at the Met Gala, Federer ended weeks of speculation with his wordless entrance onto Centre Court in a jacket made by Uniqlo, the Japanese casual wear designer. It was both a major surprise and the revelation of the worst-kept secret in tennis”.
Federer’s contract with Nike ended in March this year. Post that there was major speculation that the tennis pro would end his two decades old relationship with Nike and a USD 300 million deal with Uniqlo was in the offing. But Federer showed up in Stuttgart and Halle wearing his usual Nike gear quietening the rumour mills. A week before Wimbledon, Nike actually released Federer’s outfit scripting for the All England Lawn Tennis Championships. All seemed well. Then, as USA Today again cheekily commented, “Federer showed up to the dance with a different girl on his arm”, and all hell broke loose! Federer’s famed flair for theatrics was on full display. The mighty swoosh was still there on the shoes of the champion, but the rest of his attire was now in the command of the outerwear clothier from Japan who has been planning to expand its worldwide footprint and make a visible splash before the 2020 Summer Olympics come to Tokyo.
Federer’s dumping of Nike is all the more surprising since his relationship with the swoosh dates back to his salad days as a temperamental junior on the circuit with an unsightly ponytail and bleached blond hair, winning some but losing most of his Grand Slams. And then he began to win the Slams at an unprecedented pace: five-straight Wimbledons and four-straight US Opens in the mid-2000s. So close was the relationship with Nike, that the ‘RF’ brand was birthed by the Oregon giant in celebration of the success of its most famous tennis star. All of the camaraderie and all the bonhomie now seems just memories of the past.
The Federer-Nike divorce has many interesting pointers for the world of brand endorsements:
Uniqlo is almost unknown in the Western world. For Federer to sign-up with such a brand actually runs contrary to Federer’s very careful choice of brand associations in the past. Roger Federer has endorsed Rolex, Mercedes, Credit Suisse and Moet and Chandon. The move to Uniqlo is akin to moving from Michelin-star gourmet to fast food! Uniqlo does not quite fit in to the brand portfolio of tennis’s most famous and enduring champion. Did he do it just for the money – USD 300 million in the evening of his career was surely a serious incentive. But to most industry watchers, it was not just the lure of money. Federer’s ten years long contract with Uniqlo will remain in force even when Federer stops playing, which could be anywhere between 18 to 48 months away. Federer has therefore proactively vacated the ‘performance’ space that Nike represented, and moved his brand to a more passive ‘fashion’ domain. Very few sportspersons actually display such astute planning. He has invested in ensuring the longevity of Brand Federer far beyond his years on the playing circuit.
Nike has always had the best-of-class in its global lineup of brand ambassadors. Over the years, Nike has been endorsed by Ronaldinho, Tiger Woods, Michael Jordan, Le Bron James, Michelle Wie, Maria Sharapova and Lance Armstrong. Despite the special ‘RF’ salutation, a special tennis line dedicated to Roger Federer, the tennis great was still only one amongst equals in the highly decorated Nike firmament. Even though he hasn’t performed an NBA jump shot since 2003, Michael Jordan continues to cash checks worth more than USD 60 million annually in royalties from Nike. In comparison, Federer’s earnings from Nike were a piffling USD 10 million a year. The Uniqlo deal allows Federer to come out of the shadow of the likes of Michael Jordan. As Federer’s career heads into the sunset, he has cleverly got himself a 300% raise and also ensured brand differentiation. Clever!
Federer’s long-standing rival Rafael Nadal has also recently demanded that his contract with Nike be tripled in value, or he too has threatened to walk away. Nadal is obviously hoping to follow the trend which has also seen Novak Djokovic pen a lucrative contract with Lacoste last year. Under Armour is said to be waiting in the wings to sign-up Nadal. For Nike, the learnings are not lost. Its monopoly on ‘performance’ is beginning to fray somewhat with the top rung of tennis players not shying of signing up with ‘mass-designer’ brands who are more in the realm of popular fashion than sport.
How have the legion of FedFans reacted to the Nike ‘betrayal’? It is too early to say but even Federer will find it really really difficult to migrate his diehards away from the swoosh. As a critic pointed out, you can put a can of Heineken beer in the hands of James Bond, but the world will continue to think he likes his martinis. Federer is so strongly associated with Nike that Uniqlo will find it really hard to disengage his fans from years of loyalty to the American brand.
There are two other important aspects here. The ‘RF’ brand is still with Nike. Federer has gone on record to say, “(it will) come to me at some point, I hope rather sooner than later if Nike can be nice and helpful in the process”. Federer’s equity with Nike in a large measure is linked to the ‘RF’ tennis line. Whether Nike will be magnanimous enough to let Federer take ‘RF’ to Uniqlo will largely determine the actual value of the Federer endorsement for the Japanese brand.
As mentioned earlier, Federer still sports shoes with the Nike logo. To the sports fanatic, Federer’s shoes and his racquet are far more important than his shirt. Uniqlo does not make shoes. This leaves the window open for a continued Federer-Nike relationship which can keep FedFans happy. Federer, as I said before, is as astute off-the-court as he is on it.
There is much to learn from the Federer example in India too. For one, despite the likes of Sachin Tendulkar, MS Dhoni and Virat Kohli having been in great demand as brand ambassadors, none of them has had an innings of two decades with any brand they ever endorsed. Contracts were of much shorter durations, never allowing for enough customer loyalty to build up for a given franchise. Brands always kept their options open, jettisoning the endorsee as soon as he got older or stopped performing. The Federer-Nike relationship lasted 20 years. What is also important to note is that Nike signed up Federer when he was still very very young on the circuit. In India brands wait sufficiently long till a player has actually achieved visible success before signing him on as an ambassador. In fact, very few players have actually become endorsees, with most of the opportunities being grabbed by the Indian team captains. So, brands in India do not really invest in young talent, they choose their endorsees only when fame has already been achieved. Lastly, in India too, there are examples of endorsees switching allegiance to brands, but the examples have been few and far between, rarely enough to make headlines.
We have still not heard the last of the Federer-Nike story. Knowing Federer, he will serve out more aces. He will of course wear the Uniqlo jersey from now on; he will take the ‘RF’ brand to Uniqlo sooner or later; also he will retain Nike for his shoes, thereby extracting more than what an ageing champion actually deserves. Smart!
(Sandeep Goyal is a PhD in Human Brands. He has spent many many years looking at how celebrities behave, and what drives their motivations.)