Phil Knight, the founder of Nike, controls the company via a personal stake of shares for 7% ownership, plus the shares held via the family’s owned Swoosh, LLC, in addition to the shares in possession of his son’s Trust. Phil Knight directly controls a significant stake in Nike’s Class A and B shares, valued at over $30 billion.
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| Category | Details |
|---|---|
| Full Name | Philip Hampson Knight |
| Date of Birth | February 24, 1938 |
| Place of Birth | Portland, Oregon, USA |
| Nationality | American |
| Education | Bachelor of Arts in Journalism from the University of Oregon, Master of Business Administration from Stanford Graduate School of Business |
| Early Career | Accountant at Price Waterhouse, Assistant Professor at Portland State University |
| Major Companies Founded | Nike, Inc. (originally Blue Ribbon Sports) |
| Positions | Co-founder and former CEO and Chairman of Nike, Inc. |
| Net Worth | Estimated over $30 billion |
| Business Milestones | – 1964: Co-founded Blue Ribbon Sports with Bill Bowerman, initially distributing Onitsuka Tiger shoes from Japan. – 1971: Renamed Blue Ribbon Sports to Nike, Inc., and introduced the iconic Swoosh logo and the brand name Nike. – 1972: Launched the first line of Nike shoes, including the Nike Cortez, at the U.S. Track & Field Trials. – 1978: Expanded into apparel and accessories, establishing Nike as a comprehensive sports brand. – 1980: Took Nike public with an initial public offering (IPO), raising capital for further expansion and innovation. – 1984: Signed Michael Jordan to an endorsement deal, leading to the creation of the Air Jordan line, revolutionizing sports marketing and branding. – 1990: Opened the first Niketown retail store in Portland, Oregon, enhancing the brand’s retail presence. – 2004: Stepped down as CEO but remained Chairman, focusing on strategic vision and company culture. – 2015: Announced plans to step down as Chairman, succeeded by Mark Parker, but remained involved as Chairman Emeritus. – 2020: Nike continued to lead the global sportswear market, with significant advancements in sustainability and digital innovation under his legacy. |
Early career
Phil Knight is an American billionaire best known as the co-founder of Nike where he has also held the roles of chairman and CEO.
Knight retired from Nike in 2016 after 52 years of service and, according to Forbes, is the 17th richest person in the United States with a net worth of $41.5 billion. Below we will discuss the events that precipitated Nike and some of Knight’s other pursuits.
Knight was a keen runner from an early age and was known to jog the seven-mile distance between his home in Oregon and employee Advance Publications. The company owned daily newspaper The Oregonian where Knight worked part-time tabulating sports scores.
At the University of Oregon, he became employed as a sports reporter for the Oregon Daily Emerald. He also ran on the track and field team, and it was there that he would meet coach and eventual business partner Bill Bowerman.
Knight noticed Bowerman’s passion for running and how the performance of athletes increased after he tinkered with their shoes.
Stanford University
Knight then enrolled at the Stanford Graduate School of Business. As part of one of his classes, he authored the paper Can Japanese Sports Shoes Do to German Sports Shoes What Japanese Cameras Did to German Cameras?
Wanting to import high-quality, low-cost Japanese running shoes into the United States, Knight embarked on a round-the-world trip after he graduated in 1962. He made a stop in Kobe, Japan, and discovered the Tiger brand of running shoes manufactured by Onitsuka Co. (later Asics).
After meeting with Mr. Onitsuka himself, a deal was struck that would enable Knight to import Tiger shoes into America. The first pairs of shoes would take more than a year to arrive with Knight working as an accountant in the interim.
When the first shoes did arrive, he mailed a pair to Bowerman to see if he would be interested in buying or endorsing them.
Blue Ribbon Sports and Nike
Bowerman expressed interest in not only buying the shoes but also acting as a consultant and partner who could provide design ideas. The two men subsequently formed Blue Ribbon Sports with a handshake on January 25, 1964.
According to Sports Illustrated writer Donald Katz, Knight initially ran the company (named for a beer label) from ”a storefront hole-in-the-wall next to the Pink Bucket Tavern in a working-class section of Portland.” Knight was also known to sell shoes from the back of his green Plymouth Valiant at track meets.
Blue Ribbon Sports became Nike in May 1971.
The critical early years
While modern companies look to venture capital to grow their businesses, the industry was not sufficiently developed during Nike’s formative years. This meant Knight had to rely on loans and other non-equity-based forms to finance to grow the business.
In an era before high-risk, high-growth companies were the norm, the Nike CEO found it extremely difficult to obtain finance from commercial banks. Indeed, most were reticent to lend him money because of their belief that he did not have enough equity to support Nike’s impressive growth.
Knight has since written about these years extensively, with this excerpt from his 2016 memoir Shoe Dog explaining the predicament well: “Again and again I’d try to explain the shoe business to my banker. If I don’t keep growing, I’d say, I won’t be able to persuade Onitsuka that I’m the best, they’ll find some other Marlboro man to take my place. And that doesn’t even take into account the battle with the biggest monster out there, Adidas. My banker was unmoved.”
With every dollar he made reinvested back into the business, Knight returned to the bank on numerous occasions to ask for cash to fund progressively larger shoe orders: “I’d wheedle, grovel, negotiate, and eventually he’d approve my loan. After I’d sold out the shoes, and repaid the borrowing in full, and I’d do it all over again.”
This high-stakes, debt-heavy state of affairs persisted for around 16 years before the company went public and improved its financial situation.
The swoosh logo
Nike released its famous Swoosh logo soon after the company was founded in 1971, but its origins can be traced back to 1969 at Portland State University (PSU).
In the late 1960s, Nike was still known as Blue Ribbon Sports and Knight was an assistant professor in accounting at PSU. One day in the corridor of the school’s graphic design department, he overheard student Carolyn Davidson lament that she could not afford to take a class on oil painting.
Knight then proposed a solution, telling Davidson he needed a designer to make some charts and graphs for an important meeting with executives from Onitsuka (the maker of shoes Blue Ribbon Sports was selling in the United States).
Knight paid Davidson $2 per hour and this arrangement continued for around two years before he asked her to design a logo. Tensions with Onitsuka had advanced to a point where Knight had decided to strike out alone and carve out his own identity.
The stripe is born
At some point in 1971, Knight asked Davidson to create a “stripe” (industry slang for a shoe logo) that was simple, fluid, conveyed motion and differentiated itself from the logos of Adidas, Puma, and Tiger.
Davidson then presented five or six finalists to Knight and early employees Jeff Johnson and Bob Woodall, with the trio settling on the Swoosh logo. Davidson wanted more time to refine the chosen design, but Knight, citing production deadlines, was in a hurry to finalize the transaction.
Knight paid Davidson $35 for her trouble, and the U.S. Patent Office received the Swoosh on June 18, 1971.
But this is not the end of the story. More than 12 years later, Nike’s cash flow was much more impressive and, after the aforementioned IPO in 1980, had made its founders rich.
Woodall approached Knight in 1983 and suggested Davidson’s reward for designing the logo was inadequate and that they should do something more.
The pair then organized a surprise party for the designer, with archival footage showing Knight handing Davidson a framed certificate acknowledging her as the creator of the Swoosh.
Davidson then received a gold ring in the shape of the Swoosh with a diamond inset near the curve. Knight also awarded Davidson 500 shares in Nike which, due to several stock splits, would now equivalent to 32,000 shares.
Vinton Studios
Knight took a 15% stake in computer animation and claymation company Vinton Studios in 1998. Four years later and with Vinton Studios in dire financial trouble, Knight provided additional capital and guaranteed repayment of the company’s debts.
With enough shares to take control of the company, Knight transitioned from a passive investor to chairman of the board. He then concocted a plan to move away from television and concentrate on animated films where Pixar and Disney had found success.
Vinton Studios was rebranded as Laika and Knight invested a further $180 million. The money was used to fund the company’s first feature film Coraline and Knight used his clout to attract animation veterans from Disney, DreamWorks, and Pixar.
Under his direction, Laika now produces animated feature films in addition to commercial work such as music videos and ads.
Key takeaways
- Phil Knight is an American billionaire best known as the co-founder of Nike where he has also held the roles of chairman and CEO. Knight retired from Nike after 52 years and, according to Forbes, is the 17th richest person in the United States.
- Knight worked for various newspapers in his youth and graduated from the Stanford Graduate School of Business in 1992. Whilst at Stanford, he authored a paper discussing the merits of importing shoes from Japan to sell in the USA.
- Knight traveled to Japan post-university and convinced Onitsuka to let him import their Tiger brand shoes. He sent a pair to Bowerman with the pair starting Blue Ribbon Sports soon after. After Nike, Knight took control of the animation company Vinton Studios.
Key Highlights
- Ownership and Control of Nike:
- Phil Knight, the founder of Nike, controls the company through personal stake of shares, family-owned Swoosh, LLC, and his son’s Trust.
- He directly controls a significant stake in Nike’s Class A and B shares, valued at over $40 billion.
- Early Career and Introduction to Sports Shoes:
- Phil Knight was an avid runner and sports enthusiast from an early age.
- He worked part-time as a sports reporter for the Oregon Daily Emerald at the University of Oregon.
- Knight met coach Bill Bowerman, who tinkered with shoes to improve athlete performance.
- Stanford University and Business Pursuits:
- Knight enrolled at the Stanford Graduate School of Business and authored a paper on importing Japanese sports shoes to the USA.
- During a trip to Japan, he discovered the Tiger brand of running shoes by Onitsuka Co. (later Asics).
- Formation of Blue Ribbon Sports and Nike:
- Knight imported Tiger shoes and partnered with Bowerman, forming Blue Ribbon Sports in 1964.
- The company started small, even selling shoes out of Knight’s car at track meets.
- Blue Ribbon Sports eventually evolved into Nike in May 1971.
- Early Challenges and Financing:
- During Nike’s formative years, venture capital wasn’t as prevalent, and Knight relied on loans and non-equity-based financing.
- Commercial banks were reluctant to lend money due to concerns about equity support for Nike’s growth.
- Knight reinvested earnings back into the business and frequently negotiated loans to fund shoe orders.
- Nike’s Growth and IPO:
- The company’s high-stakes, debt-heavy situation continued for around 16 years before going public.
- Nike’s financial situation improved after the IPO in 1980.
- Creation of the Swoosh Logo:
- The iconic Nike Swoosh logo was designed by Carolyn Davidson, a student at PSU, in the late 1960s.
- Knight paid Davidson $35 for the logo, which was registered in 1971.
- Recognition of Logo Designer:
- In 1983, Phil Knight and Bob Woodall organized a surprise party to recognize Davidson’s contribution.
- Davidson received a gold Swoosh ring with a diamond and 500 shares in Nike (now equivalent to 32,000 shares).
- Involvement with Vinton Studios and Laika:
- Knight took a 15% stake in animation company Vinton Studios, later rebranded as Laika.
- He invested capital and transitioned to chairman of the board, focusing on animated films and commercial work.
- Retirement and Philanthropy:
- Phil Knight retired from Nike in 2016 after 52 years of service.
- He is one of the richest individuals in the United States with a net worth of $41.5 billion.
- Knight’s contributions to Nike and the business world have made a significant impact.
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