July 27, 2012 at 1:10 PM ET
Updated 2:22 p.m. EDT: The Summer Olympics already have their first winner: Egyptian athletes are getting a gift from sneaker and sports apparel giant Nike, after the cash-strapped Egyptian Olympic Committee admitted its team was outfitted with Chinese-made Nike knockoffs.
Nike said it and ATC, its Egyptian distributor, were donating "training and village wear" to the Egyptian Olympians. "The shipment is due to arrive into London tomorrow where it will be delivered to the Egyptian delegation and then embellished and distributed to the athletes," the company said via email. "Our main priority is to provide athletes with authentic Nike product."
The counterfeit uniforms came to light after Egyptian athletes griped via Twitter that their faux Nike gear was poorly made and sported the logos of Nike as well as official sponsor Adidas. Committee chief Mahmoud Ahmed Ali told The Associated Press that Egypt’s economic situation compelled it to sign with a Chinese distributor, and denied knowing the cut-rate goods were counterfeit when they were purchased, according to Egyptian media outlet Ahram Online.
Controversies over athletic uniforms have been rife at this year's Olympics. In addition to the Egyptian knockoffs, United States outfitter Ralph Lauren came under fire for manufacturing the uniforms in China, and Spanish athletes have Tweeted mocking photos of and critical comments about their bright red and yellow uniforms, which the Spanish government received for free.
Nike was smart to take the high road rather than attempt to pursue legal action against the Committee, experts said. Even if Nike has legal grounds to believe that the EOC knowingly bought fakes, it might have a hard time collecting damages if the agency is claiming its troubled finances are the root of the problem, said Michele Forzley, a public and international law attorney.
What’s more, “Even if there was a settlement, it wouldn’t be material to Nike’s numbers at all,” said Sam Poser, managing director at Sterne Agee. Even after absorbing the cost of the athletes' uniforms, Nike stands to get something much more valuable: brand exposure at rival Adidas’ expense.
“It’s putting Nike in the news in the middle of Adidas’ banner sponsorship,” he said.
In previous years, Nike seemed to make an Olympic sport out of making an end run around the advertising bans meant to preserve the value of sponsors’ significant investment. Among other tactics, it sponsored individual teams, passed out flags to spectators and took out prominent billboard space nearby.
This year, its approach was more tongue-in-cheek. Its new ad campaign obliquely references the Olympics without saying the word; the 60-second commercial features an inspirational tagline and music, action shots of athletes riding, running and playing interspersed with images of signs and billboards reading “London.”
The tweak: the athletes are just anonymous people — some of them kids, and the locations are other towns named London around the globe.
While Nike wages a perennial battle against the rampant ripoff of its logo, this instance came with the unexpected perk of media exposure. “If it gets their name in the news in the middle of the Olympics, it’s good,” Poser said. In turning a counterfeiting scandal into an act of corporate generosity, Nike took the ball and ran with it.