Nike is Betting Big on Johnny Manziel | $NKE

Takeaway: We don't like the stock here. We like this development.

Editor's Note: This is a complimentary research excerpt from Retail Sector Head Brian McGough. For more information on our services, click here.

Nike is Betting Big on Johnny Manziel | $NKE - 1b263215f5c9551a0593fa93de01ad79 crop north

Nike Showcases Johnny Manziel Pro Day Collection

• "Nike, which recently signed Johnny Manziel to an endorsement contract, is wasting no time cashing in. At Texas A&M's pro day on Thursday, Manziel elected to wear Nike full pads and helmet, a move that surprised scouts and the media since most players do not suit up with a helmet during these types of workouts. Nike tweeted out a link to buy all the items from the Manziel 'Pro Day Collection.'”

Nike is Betting Big on Johnny Manziel | $NKE - chart1 3 28

Takeaway from Hedgeye’s Brian McGough:

Let's be clear. We still think that Texas A&M quarterback Johnny Manziel is a colossal, gigantic, enormous, huge blow-up risk. 

But we give Nike a lot of credit on how they're handling this one.


Their old method was:

1)      Endorse big athletes;

2)      Stick them in ads; and

3)      Hope that it trickles down to the mainstream product.

 

In this case, though, Nike has a full array of products associated with Manziel for Pro Day –far from when he even will even see a snap in the NFL.  This marks a fundamental change for how Nike is handling endorsements.

We still don't like the stock here…but we do like this development.

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