Nike Stops Paying NBA Players

Nike, which pioneered the art of the lavish endorsement deal, is reining in high-priced NBA stars who have been little more than high-priced models the past two months.

Slumping sales and the NBA lockout have led the world's largest athletic shoe company to exercise its option to withhold quarterly endorsement payments to most of the 230 NBA players it has under contract.

"We are doing this because the lockout is hurting fans, it's hurting the sport, and it's hurting the value of our investments in the NBA," Nike spokesman Vizhier Mooney said.

The decision risked alienating some athletes, she admitted, but after three consecutive quarters of declining Nike profits, the company must reassess its investment in the league.

"There is no way we'd threaten our relationship with the NBA or the many NBA players we're partnered with," Mooney said. "But as a business, we have to make common sense, fiscally responsible decisions."

Some agents were surprised by Nike's decision.

"I believed they had every intention they would pay," said Aaron Goodwin, an agent who represents Damon Stoudamire and Gary Payton, among others. "I'm disappointed they made this decision, but I understand fully what they're doing. It's a business, and things like this happen."

Some agents have said Nike should also withhold the money it pays the NBA to show it is impartial in the lockout, but the company declined to confirm it was cutting back payments to the league until Tuesday.

"We've been taking these types of steps since July, when payments to the league were reduced," said Mooney, who refused to say which big-name players were included in the cts.

Nike has a reputation for standing by the star athletes in its stable. For years, the fear was that it could not afford to alienate big names and have them defect to another company. Now, Nike and its competitors are re-examining the value of these big endorsement contracts and cutting back.

Nike chairman Phil Knight and top executives have been preaching cost control since the annual shareholder meeting last September, when the company confirmed it planned to cut its sport marketing budget by $100 million.

Mooney said withholding contract payments was part of the company's "across-the-board" cost-control strategy, and she rejected any suggestion the decision could appear to undermine players.

"We've been in a constant dialogue with everyone during this lockout," she said. "The agents' point of view is really secondary to the athletes' point of view for Nike."

Reaction from competitors was mixed.

Robert Erb, sports marketing director at Beaverton-based Adidas America, said Adidas is still paying its NBA endorsement contracts.

But Fila USA, based in Sparks, Md., has the same policy as Nike.

Fila cut off endorsement payments to the five of its 10 NBA athletes with that option in their contracts, company spokesman Howe Burch said.

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