✳️Teams in Trail and Nike’s downfall

A Trailmix of news, opinion on the business of trail running

Hey pals 👋 - It’s peak racing season so not much news beyond the results, but we still have WTM’s new team league to chat about and the coverage of Nike’s missteps. As always if you have a comment or want to chat, reply to this email, write a comment, always interested to hear from you lovely lot. Hope you’re all having a great summer! - Matt

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Last week’s ultramarathon magazine story caught the attention of a few of you. The competition and bias concern was one that rung true throughout social media, something Scott echoed in his comment. He also raises a perennial question in trail running where everyone seemingly knows everyone, effecting how they pass judgement on their peers.

When considering how UR should begin to rediscover it’s value, Sarah put it most elegantly by focusing on what UR should not be and leaning into long-form as a way for the magazine to deliver a ‘wise’ perspective on the sport.

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World Trail Majors announces Team League

What? The World Trail Majors has announced a new ‘team’ competition whereby teams of runners who score highly in the series will win the title of highest scoring team.

How does it work? WTM on their announcement explain it as such “Each race will have both an individual and team winner. For the overall league winner, the team with the best combined race results from their best 6 races will be the World Trail Majors Team Champion, 2025.”

Teams have to be made of at least one male and one female competitor with a max 6 team mates. Points will be awarded to the top 100 runners in each race. The team with the highest points across their 6 best races wins.

Consequently, there is no change to the format, just that there will now be a team winner as well as individual winner in each race.

What’s the incentive? There is no reward for the winner, the exposure alone in the league table, PR, social posts on WTM races and visibility on livestreams is the incentive. In conversation with Sergio Fernández at World Trail Majors, he foresees this to be more attractive for small to mid-size brands entering the sport who can’t afford the marketing or contracts of large brands in the sport

Matt’s opinion: With there being no tangible change to the race format, incentives or funding, this was a no-risk test for WTM to grant brands (or teams of individuals) more opportunities for exposure.

It is likely that the headline brands in the sport, the Salomons, Adidas, Hoka’s of the world, will be at the top of this league without even really making a concerted effort due to the calibre and depth of their teams. However it does pose an interesting question - how could teamwork play a role in trail running races?

Support crew are already a form of teamwork in races across short and long distance races. In the Golden Trail Series, brands have been known to have reps along the course handing pre-filled water bottles and nutrition to professional athletes and crews play a significant role in 100 mile races for all racers. In the Marathon des Sables, runners can have ‘Sherpas’ to carry their gear. These are all examples of people outside the race helping competitors perform their best, but not inside the race.

The recent hype over long distance relays points to a tangible recognition that teams can compete together in a race. From the Ragnor Relays to The Speed Project, these are races that show that races can be won when competitors are brought together, but all under the idea that you do it for the team, rather than the individual accomplishment. It doesn’t require a stretch of the imagination to see professional relay teams forming competing across the world, and maybe even a relay league (yes, another series to follow).

Compared to the likes of cycling and Formula One with drafting, and team roles and hierarchy, there aren’t as many physical advantages individuals can give each other in a trail race. Maybe there could be a fireman’s lift and sprint technique to give a colleague a little rest. Or a rugby tackle and grapple part to take out competitors akin to the enforcer role in ice hockey. But realistically, thats not going to happen.

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Nike’s fall from grace

What? After a few strategic missteps and consequent falling revenue growth, Nike has become the media and thought leader’s punchbag, with many foreseeing demise for the sports behemoth.

How did we get here? In a scathing critique of the company, Massimo Giurno, former senior brand manager for Nike, believes this started in 2020 when John Donahue became Nike’s new CEO. Following a short review John proceeded to:

1) Eliminate categories from the organisation (brand, product development and sales)

2) Switch to DTC led

3) Centralise marketing making it ‘data driven and digital led’. This would then inform product development over the traditional brand/category product creation.

4) Product development also became gender led - men, women and kids.

4) ‘restructure’ the company, culling hundreds of employees in a bid to streamline the organisation behind this new initiative

With COVID changing the retail economy overnight, the effects of this were hidden from sight as Nike Direct hoovered up more money than the losses in wholesale. Only once society emerged from the fog of COVID were the effects of the losses of decades of industry experience and ruined wholesaler relationships.

In Q2 of this year, John Donahue announced that the company had pivoted back to the original ‘fields of play’ product development model under each category in an attempt to reverse the effects of his previous actions.

However with Nike at their lowest share price since 2018 and over $70bn in market cap lost so far this year, the media and thought leaders have started to paint this as the beginning of the downfall of Nike.

Matt’s Opinion: When you see monumental drops in value like $70bn in market cap in 9 months, it’s easy to lose context of Nike’s history, size and presence in sport. They are still the biggest company in sports by a large margin, and that isn’t likely to change.

The errors were multiple - an arrogance around the loyalty of customers, the impact of shifting marketing budgets into predominantly ‘performance’ media vehicles, an over-reliance on ‘heritage’ shoes and collaborations, a disregard for wholesalers and the brand’s relationships with them; the list goes on and on. A lot of the derision is warranted. But the tone of a lot of articles verges too far into hyperbole.

With almost double the media spend of Adidas, at $37bn revenue, they have enough firepower and knowledge to be able to recover from this. Maybe not in the next few years, but they will. This is not a company killing moment, but a momentary set-back that they will recover from.

Stepping back, the fascination with the fall of Nike is both emblematic of its deified position in culture and the nature that corporate failures are now poured over.

There are few brands that are icons, but Nike is one of them. For decades they’ve been the centre of sport, forever adored for their punchy ‘just do it’ attitude and pioneering lean on emotive storytelling. Even with a little stumble, the fall from such great heights is enough for people to ponder whether the cultural values and symbols that Nike has long stood for still matter. The media attention has focused on explaining the setback in technical business terms, but maybe there is an underlying feeling that this is representative of a paradigm shift in culture.

Additionally, the fall of corporate Goliath narrative has always gathered fascination, but how the media covers these setbacks has become more detailed. Now each corporate collapse warrants a multi-episode TV and podcast series with interviews and fictionalised replays to detail the entire story, suggesting a demand for richer reporting on the intricate nuances of such stories (e.g. The Dropout, WeCrashed, Dirty Money etc.) Being a household name, the tale of Nike fits nicely in this style.

What’s glossed over is the competitive responses to this. Adidas is the nearest competitor who has profited most from this misstep. Through adopting a lot of marketing strategies that Nike once deployed (‘owning the city’, reallocating budget to ‘storytelling’ initiatives, increase investment in younger audiences to build the brand relationships from an early age), Adidas has begun to encroach in a lot of territories that Nike used to own. We then can look at the likes of On and Hoka who have both led with innovation in the face of Nike’s declining stronghold on the title as the most ‘innovative’ brand, as well as being more adept at managing the DTC/wholesale balance to favour higher margins and lighter inventory levels.

Often the media and thought leaders love to reify the actions of the biggest brands as if everything they do is a master stroke in business strategy (just look at the case study’s people love to roll out in company presentations). Most of the time thats because they’re the most vocal companies and they have a larger customer base and thus the writer will get more eyeballs on their article than if they focused on Janji, for example. But in part due to Nike’s mistakes, we now have a fascinatingly diverse running industry where small brands are starting up every year, taking market share and doing so in more unique and distinctive ways. That’s where our attention should be.