Simone Biles partners with Athleta, ending Nike deal

Reggie Wade discusses Simone Biles’ apparel partnership with sportswear company Athleta, which puts an end to her six-year relationship with Nike.

Video transcript

JULIE HYMAN: It has been something of a challenging week, or, one can say, couple of weeks. For Nike, the stock was downgraded earlier in the week. And then today came the news that the gymnast Simone Biles was not going to reup her contract with Nike. Instead, she's going to sign on with Athleta, the Gap brand. Our Reggie Wade covers Nike. He is with us now. And it's really interesting, Reggie. It's great to see you, by the way. It's really interesting. Biles said in an Instagram post that she was interested in this sort of diversity and inclusion aspect from Athleta. But we don't know what the financial negotiations were like behind the scenes. But it is interesting because Gap-- this is not the first person that Gap has-- that Nike has lost recently.

REGGIE WADE: Yes, Julie, and always great to see you That's true. It's been a rough spring for Nike. We had the Lil Nas X Satan Shoe thing. Then we had the Chinese boycott issues. And now Simone Biles, who's been with Nike since 2015, leaves the brand. What's interesting, Biles wasn't outright critical of Nike. She said reportedly that she just felt that it was time for a change. And she also said that she feels that Athleta supports her as not just an athlete. So, it's going to be interesting to see if other signature athletes follow suit.

BRIAN SOZZI: Reggie, this also comes on the heels of Nike, I would say, not stepping up and keeping Kobe Bryant inside the brand. What in the world is with this company? Are they still dealing with a lot of the management and cultural issues that have really, I think, have been plaguing them for the past two years?

REGGIE WADE: I don't think it's that. It's interesting when you bring up the Kobe situation. I spoke to Kenneth Anand, the writer of "Sneaker Law," and Zak Kurtz of the Sneaker Law Firm. And they both told me that Vanessa Bryant might be looking to start a Kobe signature brand. There were rumors swirling about two years ago that Kobe was looking to branch out and start his own brand. So this actually might be something that was a long time in the making.

But they both tell me that starting a brand isn't easy, so it might take a little to come off the ground. But that's a big loss for Nike. I mean, Kobe, one of their top signature athletes, and we've seen the outpouring of support from Kobe's fans since his passing. They put Kobe products up, they sell out immediately. So I think it's a big loss for Nike, but some say there might be some room to negotiate a new contract. But only time will tell.

MYLES UDLAND: Yeah, you know, Reggie, and the Kobe story is interesting just because his shoes are performance shoes. I mean, I guess, Jordans are performance technically, but guys in the League in the NBA are going to be wearing a lot of Kobe's. And you don't really see too many Jordans there. Chris Paul at last check was kind of still wearing them. He's still wearing his Fours out there, but, you know, it's not quite as common.

Something else that I thought about, Reggie, with this story-- I'd be curious for your thoughts on this if it's kind of come up at all-- but, like, when Nike made a big deal and retained Kaepernick as a sponsored athlete, when it was clear he was never going to play football again and be primarily a social activist, I wonder if that set the bar for the company to actually follow through on some of its initiatives. And maybe other athletes are looking at the company now. And maybe they don't think that they've done enough for Colin. Maybe they think that they've kind of half-- sort of come in halfway on what they said they would do for Kaepernick. And I wonder if that has now set up a new generation of athletes looking at their contract renewals, saying, maybe I don't trust the brand to do what it said. I don't know if that's any part of this. But it's something that I think I'm at least watching on the backdrop of this.

REGGIE WADE: I haven't heard any of that, but, Myles, you hit it right on the head. In 2017, we actually saw Adidas grab market share from Nike on Jordan brand. And I think that was kind of a wake up call. And then shortly after, Nike entered its relationship with Colin Kaepernick. And they really became the brand of social justice and the brand that people who wanted to support social justice issues went to. And I think some of that clout has started to go down. I don't think it's anything between Nike management and athletes feeling that Nike isn't behind what they say because the brand has committed millions and even billions of dollars to social justice initiatives and initiatives throughout the minority community.

But I just think that sometimes times change, and athletes feel that they need to change. And for Simone Biles, this was the right time. So we'll just have to see if more and more athletes follow. But as for Colin Kaepernick, I think a big part of it was, was he going to return to the NFL? And I think if he did, that's when we would really see the full Colin Kaepernick branding. But then when he went to the tryouts, teams looked at him, and they said, you know what, we're not going to give him a chance, I think that's when you started to see some of the bloom coming off of the Kaepernick rose as far as a marketing standpoint.

JULIE HYMAN: Yeah, and we've talked a lot about the negatives for Nike. We didn't really have time to get into the positives potentially for Athleta. Simone Biles going over there and, of course, Kanye with his association with Gap as well. We haven't seen the fruits of that as of yet. So that should all be interesting to track as well. Reggie Wade, thank you so much. Appreciate it.