NIKE not capitalizing on YAO MING (LA Times article)

NIKE not capitalizing on YAO MING (LA Times article)
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Nike keeps Yao on the bench

By Ralph Frammolino
Los Angeles Times

He has mugged with Mini-Me for Apple computers, and his legs have dangled off the top of a bunk bed in ads for ESPN. He has played the straight man in a Visa commercial that pokes fun at his name. One New York importer is using him to hawk Chinese beer to Texans. Up next? A Gatorade commercial.

Yao Ming, the Houston Rockets' 7-foot-5, 296-pound rookie sensation, seems to be everywhere. Everywhere, that is, except the one place you'd expect: in ads for Nike, the sneaker giant that helped groom him for the global spotlight.

Nike signed Yao in 1999 to a four-year, $200,000 contract, which expires in May. But the Beaverton, Ore.-based company has so far held back from capitalizing on the player's disarming smile, self-deprecating humor, earnest attempts at English and coming-to-America success story.

Now that Yao and the Rockets have wrapped up their season and his Nike sponsorship is ticking down, some wonder whether the sneaker world's most formidable marketing machine blew an easy promotional layup.

"It's weird," said Robert Dorfman, creative director for San Francisco-based Pickett Advertising, who writes a sports-endorsement newsletter. "If you've got him in your pocket, why are you keeping him in your pocket?"

Nike executives acknowledge they have done nothing to tout 22-year-old Yao in the U.S. and have barely trotted him out in China, where other companies are using the player as an entree into an untapped, basketball-crazed market.

Publicly, they say they hope to unveil a Yao promotional campaign this year if he continues to endorse their shoes. Privately, however, company insiders say they are sitting on one of the NBA's hottest properties for practical reasons: They fear that boosting Yao's profile will only drive up his fee during renegotiations or make him more attractive to a competitor.

"We don't want to hype the hell out of the guy and have him jump ship," one insider said.

Such a move would represent a reversal of fortune for Nike, the biggest player in player endorsements and long admired for locking up a stable of marquee names.

Nike tried last year to lock up Yao as he prepared to enter the NBA draft in June, said a source close to the discussions. Nike offered to "tear up" Yao's original contract and give him a new $1.6 million deal through 2006, making him China's highest-paid athlete endorser, the source said.

Yet Nike withdrew the offer when Yao's financial advisers, anticipating his potential marketing punch, insisted on raising his annual endorsement fee to "a couple of million dollars," the source said.

"That made people step back and say, 'Whoa. Maybe he's not worth that. Let's play out the contract and see how it goes.' "

Although that decision may look like a marketing misstep, one expert said it would have been difficult to anticipate how quickly Yao would become a star, earning a spot in February on the cover of Sports Illustrated along with the declaration: "He shoots, he smiles, he sells."

"Who Yao is today is 100 percent different than he was eight months ago," said Rick Burton, executive director of the Warsaw Sports Marketing Center at the University of Oregon. "Yao is now an American idol. ... He's Elvis."

Still, Burton said he's perplexed that Nike didn't make better use of Yao in China, where he's a hero and one of the most recognized sports personalities in Asia.

Apple Computer and Visa International signed deals with Yao in December, and executives at PepsiCo subsidiary Gatorade sealed a sponsorship arrangement with Yao in January. China Unicom this year also inked a contract with Yao.

Nike has made a couple of efforts to claim its affiliation with Yao. In December, it ran a limited print campaign in portions of China featuring a picture of Yao and the headline "A real Giant is not measured by his height." After Yao was televised wearing powder-blue Nike shoes during the Feb. 9 All-Star game, the company used them in an Internet ad.

Otherwise, it has relied merely on the exposure it gets when Yao wears his Shox on the court.

Nike's former China sports marketing director, Terry Rhoads, said the company could quickly change all that with a TV ad based on corporate video archives showing Yao in his Nikes as he matured from the 16-year-old in the Shanghai gym to an NBA All-Star now standing on the world stage. His suggested motto: "Nike's been with Yao each step of the way."

Such a campaign not only would break Nike's virtual silence with consumers, Rhoads said, but it also would serve to send a sentimental message to a player now culturally popular enough to cut multimillion-dollar sponsorship deals. And it might keep Yao with Nike.

"Deep in his heart, he's a Nike guy," Rhoads said. "But now it's about business."