Nike's high-profile shoe fail costs $1.1 billion in stock value

If there's a Sports Marketing Oops Hall of Fame, Nike is now among the top contenders.

Given the pregame hoopla, the much-anticipated college basketball contest between Duke and North Carolina would have been hard-pressed to live up to its billing. Yet the nationally televised game that had ESPN running a countdown to game time across its networks is getting lots of negative attention for unexpected reasons, with Nike bearing the brunt.

Less than a minute into Wednesday night's game, Duke freshman Zion Williamson, a rising superstar in his sport, went down with an knee-sprain injury when his white Nike shoe broke apart, prompting former President Barack Obama to point from his courtside seat, making the call: "His shoe broke."

Obama later took to social media to wish Duke's star player a "speedy recovery."

Nike also wished Zion a speedy recovery and said in a statement it was working to identify what caused the "isolated occurrence."

"The quality and performance of our products are of utmost importance," the company added.

The long-term ramifications for Nike remain to be seen, but in the short term, investors reacted by unloading Nike stock. The shares tumbled as much as 1.7 percent on Thursday and closed down 1.1 percent at $83.95, erasing roughly $1.1 billion from the sporting apparel company's market capitalization since Wednesday's close.

"Very visible shoe structure failure"

The mishap is "a major brand failure" for multiple reasons, according to brand expert Mario Natarelli, managing partner at the MBLM agency in New York. Beyond injuring the man many see as the nation's top college basketball player, the incident was a "very visible shoe structure failure for a company committed to performance and technology of its products," emailed Natarelli. 

A darker side to the story is how it highlights the cash sponsors like Nike pay schools that then force athletes to wear a particular brand, noted Natarelli. Nike is Duke's exclusive supplier of uniforms, shoes and apparel, and has been since 1992, ESPN reported. 

"Again, let's remember all the money that went into this game ... and these players get none of it, Utah Jazz guard Donovan Mitchell tweeted on Wednesday. "And now Zion gets hurt ... something has to change."

Still, as long as the case remains isolated, Nike is likely to recover and find ways to reverse or put a positive spin on the episode, said Natarelli.

As he put it: "It is hard to imagine Nike won't create a future shoe deal with Zion Williamson once he's pro and the headline writes itself -- we've invented a new shoe to contain the force that is Zion Williamson."

The incident isn't Nike's first with its basketball products. Multiple players including LeBron James had their jerseys rip after Nike took over as the official NBA uniform supplier in 2017.

Terry Rozier of the Boston Celtics, one of Puma's few NBA players, seized the chance to tout the smaller company, saying "Come on over to Puma" in a tweet.