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Keven Moore: The fallout and potential liability to Nike over the Zion Williamson shoe disaster

Imagine being Mark Parker the President, Chairman, and CEO of Nike, Inc. sitting in front of his television in the comfort of his home watching the start of the much anticipated Duke–vs.-University of North Carolina men’s NCAA basketball game last week.

Zion Williamson (Photo from Duke University)

Then within the first 36 seconds of the game 18-year-old Zion Williamson, the consensus overall #1 draft pick in the coming 2019 NBA and future Gazillionaire, zigs right and zags left causing his left shoe to implode and fall apart on national TV. He had planted his left foot down to turn directions. The fall caused him to clutch his right knee as he limped off the court.

Within an instant, your product is now being blamed for the injury and possibly ruining the career of one of the most sought-after future budding NBA stars of the future. To make matters worse the cameraman zooms in on Zion’s foot protruding through the shattered shoe. Former President Barrack Obama is in the stands pointing and staring in amazement.

Immediately your hearts sink as you start to worry about Zion’s health and his future income that may have disappeared within that split second. Will there be a product liability lawsuit to follow? Will the company stock take a nose dive in the morning? Will NBA stars be calling to cancel their product endorsement contract and while future shoe sales plummet in the coming months?

Then after a night of no sleep, countless phone calls to your VP of public relations, corporate attorneys, VP of risk management, …etc., you discover it gets worse; as every news outlet and sports channel continues to replaying the video over and over and over for all the world to see as your company take a hit on the stock market that afternoon.

Nike, Inc. was founded in January 1964 and is an American multinational corporation engaged in the design, development, manufacturing, and worldwide marketing and sales of footwear, apparel, equipment, accessories, and services.

They are the world’s largest manufacturer and supplier of athletic shoes and apparel that employed over 73,100 employees in 2018. Nike made $36.4 billion in revenue last year and according to an article in Esquire.com Nike sells around 25 pairs of shoes per second every day which equates to 788,400,000 shoes sold last year.

The damaged shoe (Duke University video)

So to get in front of this, Nike immediately apologized for the incident and promised to investigate the issue.

“We are obviously concerned and want to wish Zion a speedy recovery,” it said in a statement. “The quality and performance of our products are of utmost importance. While this is an isolated occurrence, we are working to identify the issue.”

My first thought as a safety and risk management consultant was that I was pretty sure that several Nike executives didn’t get any sleep that night and I’m pretty sure that the quality control engineer for that particular shoe won’t be getting any sleep for a while, “if” he/she still has a job.

What are the odds of a basketball shoe blowing out like that, let alone on national TV on the consensual #1 draft pick in this year’s draft? It has to be astronomically high and just too hard to calculate. Did Nike have a contingency plan in place in their corporate disaster plan? Because I would definitely constitute this as a disaster for Nike.

With Nike selling over 788 million shoes a year, a defective rate of 1% would be 7.88M defective shoes out there on the market. I was unable to discover exactly what Nike’s acceptable defective rate is in my research, but back in May of 2012 Nike announced that they had switched to Six Sigma program called lean manufacturing and it showed defect rates 50 percent lower according to an article in www.ame.org.

My next question was what may have caused this injury and what is the liability to Nike and the University? Had Nike’s risk management department even contemplated such a risk, and do they have such coverage on their insurance policy? I’m sure they have a product liability policy, but is there a clause in the policy that would not cover such an incident?

Who serviced the floor? Did the ball boy/floor mopper fail to dry the area after a player went to the ground? Given the fact that the players haven’t had time to generate any sweat in those first 36 seconds, I am willing to bet that it was the ball-boy/floor mopper’s fault.

Therefore I suspect that the cause of the accident has something to do with the shoe material, so is the shoe mass produced and can they pull quality control (QC) records? Did the cement holding the heel and the leather together have time to cure? Is that process tested and records retained in their QC department? That would be where I would first look.

The fall (From Duke University video)

Being a physical beast of a player who stands 6’7 weighing 280 lbs with cat-like reflexes, Zion Williamson isn’t your typical basketball player. Therefore because I’ve stayed at my fair share of Holiday Inns over the years, I would have to say that this is more of a freak accident than an inherent problem with the actual shoe. If it was an inherent problem, I suspect that we would have seen several other such incidents.

Then what about all those bets waged on Duke in Vegas? How many people lost money in Vegas after UNC upset Duke after Zion Williamson didn’t play in the remaining 39:24 minutes of the game? Will one of those big losers try to sue Nike?

I’m sure Adidas, Puma and Under Armor were all sad to see this happen to the best college basketball player in the nation, but you just know that from a competitive and business standpoint they were okay with it. But I bet that they all are revising their Disaster Plan as I write.

The high-profile failure of a Nike Inc. basketball shoe on Wednesday night was more than an embarrassment for the athletic brand and it very well could be a product-liability case. The evidence clearly suggests that the shoe failed in an epic way om very clear 4K high definition way in front of 10’s if not hundreds of millions of television viewers.

If Zion Williamson had suffered this same knee injury during an NBA game, he would have the security of guaranteed employment contract worth millions of dollars, but as a collegiate player, he would not because he is an amateur player.

Nike prides itself that their product supports and help athletes exceeds success, and unless there’s proof that the shoe was misused or damaged after it left the factory, Zion Williamson would have a good case against Nike. I would compare this to my world, where it wouldn’t be any different than a construction worker falling two stories from a broken ladder that collapsed from the worker’s weight.

Assuming the injury damages Williamson’s prospects for an NBA career and for lucrative endorsement deals, Williamson’s potential damages against Nike would be massive and in the tens if not hundreds of millions of dollars. To prove that case Zion Williamson would have to prove in fact that the injury was caused by the sneaker and that nobody inadvertently tampered with the shoe prior to the game.

Shoe closeup

According to an article in Sports Illustrated this week on this subject matter, product liability and personal injury lawsuits involving defective shoes are not completely rare, either. Last March a woman from Connecticut received a $120,000 settlement from a shoe company after a plastic heel twisted, causing her to fall and break her ankle. In 2003, a Florida court presided over a lawsuit brought by the parents of a boy who had suffered an infection to the bone and permanent heel damage. The injury occurred after he wore a Nike sneaker containing a foreign metal object.

In reality, based on injury reports that the injury was mild knee sprain it is unlikely that Williamson’s injury leads to potential litigation with Nike. But if there was I am pretty sure that Nike will settle quickly so that it doesn’t hurt their brand any further.

The question this week has been will Zion Williamson return to his team, or has this near miss scared him out of college basketball for good?

I suspect that the fallout from this incident could take months if not years to measure the effect that it has had on Nike‘s brand. Will other sports stars turn away from Nike now? What if it happens again? Does Nike have coverage for this, and if not can they get an endorsement to their policy?

One thing is certain, that this incident will have a lasting effect on collegiate sports moving forward. Future phenom athletes like Zion Williams may forgo their college career or postseason to preserve and protect their future. It’s already happening in college football as many projected NFL 1st round draft picks have been deciding to forgo postseason bowl games to protect their future from career-ending injuries.

I suspect that many more will opt to purchase insurance to protect them financially from a career-ending injury. Then many will opt out of playing collegiate sports if the NBA changes their age limits so that they can be drafted straight of high school and they will point to the Zion Williams near-miss incident.

I will say that Zion Williams could capitalize on this incident in the form of future creative commercials. I can visualize a Nike commercial where scientists are hovered over a Zion Williams similar to the $6 Million Dollar man 1970’s TV intro video, trying to rebuild and redesign a bionic shoe to match Zion’s athlete talents.

Be Safe My Friend

Keven Moore works in risk management services. He has a bachelor’s degree from University of Kentucky, a master’s from Eastern Kentucky University and 25-plus years of experience in the safety and insurance profession. He is also an expert witness. He lives in Lexington with his family and works out of both Lexington and Northern Kentucky. Keven can be reached at kmoore@roeding.com.

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