THE PROBLEMS WERE never going to stop, I realized,

THE PROBLEMS WERE never going to stop, I realized, but for the
moment we had more momentum than problems. To build on this
momentum we rolled out a new ad campaign with a sexy new slogan: “There
is no finish line.” It was the idea of our new ad agency and its CEO, John
Brown. He’d just opened his own shop in Seattle, and he was young, bright,
and of course the opposite of an athlete. That was all we seemed to hire in
those days. Besides Johnson and myself, Nike was a haven for the sedentary.
Still, nonjock or not, Brown managed to dream up a campaign and a tagline
that perfectly captured Nike’s philosophy. His ad showed a single runner on
a lonely country road, surrounded by tall Douglas firs. Oregon, clearly. The
copy read: “Beating the competition is relatively easy. Beating yourself is a
never-ending commitment.”
Everyone around me thought the ad was bold, fresh. It didn’t focus on the
product, but on the spirit behind the product, which was something you
never saw in the 1970s. People congratulated me on that ad as if we’d
achieved something earth-shattering. I’d shrug. I wasn’t being modest. I still
didn’t believe in the power of advertising. At all. A product, I thought,
speaks for itself, or it doesn’t. In the end, it’s only quality that counts. I
couldn’t imagine that any ad campaign would ever prove me wrong or
change my mind.
Our advertising people, of course, told me I was wrong, wrong, a
thousand percent wrong. But again and again I’d ask them: Can you say
definitively that people are buying Nikes because of your ad? Can you show
it to me in black-and-white numbers?
Silence.
No, they’d say . . . we can’t say that definitively.
So then it’s a little hard to get enthused, I’d say—isn’t it?
Silence.
I OFTEN WISHED I had more time to kick back and debate the niceties of
advertising. Our semidaily crises were always bigger and more pressing than
what slogan to print under a picture of our shoes. In the second half of 1977
the crisis was our debenture holders. They were suddenly clamoring for a
way to cash in. By far the best way for them to do so would be a public
offering, which, we tried to explain to them, was not an option. They didn’t
want to hear that.
I turned once more to Chuck Robinson. He’d served with distinction as
lieutenant commander on a battleship in World War II. He’d built Saudi
Arabia’s first steel mill. He’d helped negotiate the grain deal with the
Soviets. Chuck knew business cold, better than anyone I’d ever met, and I’d
been wanting his advice for quite some time. But over the last few years he’d
been the number two man under Henry Kissinger at the State Department,
and thereby “off-limits” to me, according to Jaqua. Now, with Jimmy Carter
newly elected, Chuck was on Wall Street and available once again for
consultations. I invited him out to Oregon.
I’ll never forget his first day in our office. I caught him up on the
developments of the last few years and thanked him for his invaluable
counsel about Japanese trading companies. Then I showed him our financial
statements. He flipped through them, started to laugh. He couldn’t stop
laughing. “Compositionally,” he said, “you are a Japanese trading company
—90 percent debt!”
“I know.”
“You can’t live like this,” he said.
“Well . . . I guess that’s why you’re here.”
As the first order of business, I invited him to be on our board of
directors. To my surprise, he agreed. Then I asked his opinion about going
public.
He said going public wasn’t an option. It was mandatory. I needed to
solve this cash flow problem, he said, attack it, wrestle it to the ground, or
else I could lose the company. Hearing his assessment was frightening, but
necessary.
For the first time ever I saw going public as inevitable, and I couldn’t help
it, the realization made me sad. Of course we stood to make a great deal of
money. But getting rich had never factored in my decisions, and it mattered
even less to the Buttfaces. So when I brought it up at the next meeting and
told them what Chuck had said, I didn’t ask for another debate. I just put it
to a vote.
Hayes was for.
Johnson was against.
Strasser, too. “It’ll spoil the culture,” he kept saying, over and over.
Woodell was on the fence.
If there was one thing we all agreed on, however, it was the lack of
barriers. Nothing stood in the way of going public. Sales were extraordinary,
word of mouth was positive, legal disputes were behind us. We had debt, but
for the moment it was manageable. At the start of the 1977 Christmas
season, as the brightly colored lights appeared on the houses in my
neighborhood, I recall thinking during one of my nightly runs: Everything is
about to change. It’s just a matter of time.
And then came the letter.
AN UNIMPOSING LITTLE thing. Standard white envelope. Embossed
return address. U.S. Customs Service, Washington, DC. I opened it and my
hands started to shake. It was a bill. For $25 million.
I read it, and reread it. I couldn’t make heads or tails. As best I could
determine, the federal government was saying that Nike owed customs
duties dating back three years, by virtue of something called the “American
Selling Price,” an old duty-assessing method. American Selling—what? I
called Strasser into my office and thrust the letter at him. He read it,
laughed. “This can’t be real,” he said, tugging his beard. “My reaction
exactly,” I said.
We passed it back and forth and agreed it had to be a mistake. Because if
it was real, if we actually did owe $25 million to the government, we were
out of business. Just like that. All this talk of going public had been a colossal
waste of time. Everything since 1962 had been a waste of time. There is no
finish line? This right here, this is the finish line.
Strasser made a few phone calls and came back to me the next day. This
time he wasn’t laughing. “It might be real,” he said.
And its origin was sinister. Our American competitors, Converse and
Keds, plus a few small factories—in other words, what was left of the
American shoe industry—were all behind it. They’d lobbied Washington, in
an effort to slow our momentum, and their lobbying had paid off, better
than they’d ever dared hope. They’d managed to convince customs officials
to effectively hobble us by enforcing this American Selling Price, an archaic
law that dated back to the protectionist days, which preceded—some say
prompted—the Great Depression.
Essentially the American Selling Price law, or ASP, said that import
duties on nylon shoes must be 20 percent of the manufacturing cost of the
shoe—unless there’s a “similar shoe” manufactured by a competitor in the
United States. In which case, the duty must be 20 percent of the
competitor’s selling price. So all our competitors needed to do was make a few
shoes in the United States, get them declared “similar,” then price them sky
high—and boom. They could send our import duties sky high, too.
And that’s just what they did. One dirty little trick, and they’d managed to
spike our import duties by 40 percent—retroactively. Customs was saying we
owed them import duties dating back years, to the tune of $25 million. Dirty
trick or not, Strasser told me customs wasn’t joking around. We owed them
$25 million, and they wanted it. Now.
I put my head on my desk. A few years earlier, when my fight had been
with Onitsuka, I told myself the problem was rooted in cultural differences.
Some part of me, shaped by World War II, wasn’t all that surprised to be at
odds with a former foe. Now I was in the position of the Japanese, at war
with the United States of America. With my own government.
This was one conflict I never imagined, and desperately didn’t want, and
yet I couldn’t duck it. Losing meant annihilation. What the government was
demanding, $25 million, was very nearly our sales number for all of 1977.
And even if we could somehow give them a year’s worth of revenue, we
couldn’t continue to pay import duties that were 40 percent higher.
So there was only one thing to do, I told Strasser with a sigh. “We’ll have
to fight this with everything we’ve got.”
I DON’T KNOW why this crisis hit me harder, mentally, than all the others.
I tried to tell myself, over and over, We’ve been through bad times, we’ll get
through this.
But this one just felt different.
I tried to talk to Penny about it, but she said I didn’t actually talk, I
grunted and stared off. “Here comes the wall,” she’d say, exasperated, and a
little frightened. I should have told her, That’s what men do when they
fight. They put up walls. They pull up the drawbridge. They fill in the moat.
But from behind my rising wall I didn’t know how. I lost the ability in
1977 to speak. It was either silence or rage with me. Late at night, after
talking on the phone with Strasser, or Hayes, or Woodell, or my father, I
couldn’t see any way out. I could only see myself folding up this business I’d
worked so hard to build. So I’d erupt—at the telephone. Instead of hanging
up, I’d slam the receiver down, then slam it down again, harder and harder,
until it shattered. Several times I beat the living tar out of that telephone.
After I’d done this three times, maybe four, I noticed the repairman from
the telephone company eyeing me. He replaced the phone, checked to make
sure there was a dial tone, and as he was packing up his tools he said very
softly: “This is . . . really . . . immature.”
I nodded.
“You’re supposed to be a grown-up,” he said.
I nodded again.
If a phone repairman feels the need to chastise you, I told myself, your
behavior probably needs modifying. I made promises to myself that day. I
vowed that from then on I’d meditate, count backward, run twelve miles a
night, whatever it took to hold it together.
HOLDING IT TOGETHER wasn’t the same thing as being a good father.
I’d always promised myself that I’d be a better father to my sons than my
father had been to me—meaning I’d give them more explicit approval, more
attention. But in late 1977, when I evaluated myself honestly, when I looked
at how much time I was spending away from the boys, and how distant I was
even when I was home, I gave myself low marks. Going strictly by the
numbers, I could only say that I was 10 percent better than my father had
been with me.
At least I’m a better provider, I told myself.
And at least I keep telling them their bedtime stories.
Boston, April 1773. Along with scores of angry colonists, protesting the rise of
import duties on their beloved tea, Matt and Travis History snuck aboard three
ships in Boston Harbor and threw all the tea overboard . . .
The minute their eyes were closed, I would sneak out of the room and
settle into my recliner and reach for the phone. Hey, Dad. Yeah. How you
doing? . . . Me? Not so good.
Over the last ten years this had been my nightcap, my salvation. But now,
more than ever, I lived for it. I craved things I could only get from my old
man, though I’d have been hard-pressed to name them.
Reassurance?
Affirmation?
Comfort?
On December 9, 1977, I got them all, in a burst. Sports, of course, were
the cause.
The Houston Rockets were playing the Los Angeles Lakers that night. At
the start of the second half, Lakers guard Norm Nixon missed a jumper, and
his teammate Kevin Kunnert, a seven-foot beanpole out of Iowa, fought for
the rebound with Houston’s Kermit Washington. In the tussle, Washington
pulled down Kunnert’s shorts, and Kunnert retaliated with an elbow.
Washington then socked Kunnert in the head. A fight broke out. As
Houston’s Rudy Tomjanovich ran over to defend his teammates,
Washington turned and threw a devastating haymaker, breaking
Tomjanovich’s nose, and jaw, and separating his skull and facial bones from
his skin. Tomjanovich fell to the floor as if hit with a shotgun blast. His
massive body struck the ground with a sickening smack. The sound echoed
throughout the upper reaches of the L.A. Forum, and for several seconds
Tomjanovich lay there, motionless, in an ever-widening puddle of his own
blood.
I hadn’t heard anything about it until I talked to my father that night. He
was breathless. I was surprised that he’d watched the game, but everyone in
Portland was basketball crazy that year, because our Trail Blazers were the
defending NBA champs. Still, it wasn’t the game, per se, that had him
breathless. After telling me about the fight, he cried, “Oh, Buck, Buck, it was
one of the most incredible things I have ever seen.” Then there was a long
pause and he added, “The camera kept zooming in and you could see quite
clearly . . . on Tomjanovich’s shoes . . . the swoosh! They kept zooming in
on the swoosh.”
I’d never heard such pride in my father’s voice. Sure, Tomjanovich was in
a hospital fighting for his life, and sure his facial bones were floating around
his head—but Buck Knight’s logo was in the national spotlight.
That might have been the night the swoosh became real to my father.
Respectable. He didn’t actually use the word “proud.” But I hung up the
phone feeling as if he had.
It almost makes this all worthwhile, I told myself.
Almost.
SALES HAD BEEN climbing geometrically, year after year, ever since the
first few hundred pairs I sold out of my Valiant. But as we closed out
1977 . . . sales were going berserk. Nearly $70 million. So Penny and I
decided to buy a bigger house.
It was a strange thing to do, in the midst of an apocalyptic fight with the
government. But I liked the idea of acting as if things were going to work
out.
Fortune favors the brave, that sort of thing.
I also liked the idea of a change of scenery.
Maybe, I thought, it will initiate a change of luck.
We were sad to leave the old house, of course. Both boys had taken their
first steps there, and Matthew had lived for that swimming pool. He was
never so at peace as when frolicking in the water. I recall Penny shaking her
head and saying, “One thing’s for certain. That boy will never drown.”
But both boys were getting so big, they desperately needed more room,
and the new place had plenty. It sat on five acres high above Hillsboro, and
every room felt spacious and airy. From the first night we knew we’d found
our home. There was even a built-in niche for my recliner.
To honor our new address, our new start, I tried to keep a new schedule.
Unless I was out of town, I tried to attend all the youth basketball games,
and youth soccer games, and Little League games. I spent whole weekends
teaching Matthew to swing a bat, though both of us wondered why. He
refused to keep his back foot still. He refused to listen. He argued with me
constantly.
The ball’s moving, he said, why shouldn’t I?
Because it’s harder to hit that way.
That was never a good enough reason for him.
Matthew was more than a rebel. He was, I discovered, more than a
contrarian. He positively couldn’t abide authority, and he perceived
authority lurking in every shadow. Any opposition to his will was oppression
and thus a call to arms. In soccer, for instance, he played like an anarchist.
He didn’t compete against the opponent so much as against the rules—the
structure. If the other team’s best player was coming toward him on a
breakaway, Matthew would forget the game, forget the ball, and just go for
the kid’s shins. Down went the kid, out came the parents, and pandemonium
would ensue. During one Matthew-sparked melee, I looked at him and
realized he didn’t want to be there any more than I did. He didn’t like
soccer. For that matter, he didn’t care for sports. He was playing, and I was
watching him play, out of some sense of obligation.
Over time his behavior had a suppressive effect on his younger brother.
Though Travis was a gifted athlete and loved sports, Matthew had turned
him off. One day little Travis simply retired. He would no longer go out for
any teams. I asked him to reconsider, but the only thing he had in common
with Matthew, and maybe his father, was a stubborn streak. Of all the
negotiations in my life, those with my sons have been the most difficult.
On New Year’s Eve, 1977, I went around my new house, putting out the
lights, and I felt a kind of fissure deep within the bedrock of my existence.
My life was about sports, my business was about sports, my bond with my
father was about sports, and neither of my two sons wanted anything to do
with sports.
Like the American Selling Price, it all seemed so unjust.

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