Triumph of the Swoosh

With a keen sense of the power of sports and a genius for mythologizing athletes to help sell sneakers, Nike bestrides the world of sport like a marketing colossus

I. An Incident: During the Olympic summer of 1992, just days before the Dream Team was expected to receive its gold medals, the most casual of fans learned that certain members of team might ruin one of sports' most hallowed rituals because of their preference in footwear. Officials of the U.S. Olympic Committee announced that if Michael Jordan, Charles Barkley, David Robinson, Scottie Pippen, John Stockton and Chris Mullin—Nike guys making up half the superstar basketball team—did not wear official warmups bearing the emblem of Reebok, the shoe company against which Nike, Inc. has conducted a holy war for much of a decade, they would not be allowed atop the medal stand. But Jordan and the others refused to budge.

As news of the standoff" spread, phone calls began to stream into Nike headquarters, in Beaverton, Ore., most of them indicating that this time the mighty shoe machine had gone too far. Here was a moment meant to transcend the marketplace, an event indicative of sport's traditional purity of purpose, yet a handful of highly paid athletes seemed willing to deny the nation this experience because of loyalty not to the "glory of sport" or the "honor of our teams," as the Olympic oath has it, but to a company in Oregon that makes their shoes.

Barkley—a veritable Tocqueville when moved to observe a complex social phenomenon and distill its essence—underscored the sense that Mammon was about to triumph over patria in Barcelona by proclaiming that he had "two million reasons not to wear Reebok," the number referring to the dollars Barkley would receive during the year from Nike (though Charles managed to double the actual sum). If Barkley had more than a million reasons to refuse to be a human billboard for Reebok, then Jordan was in the process of accumulating 20 million reasons—$20 million over the course of a year for helping an athletic footwear and apparel company mark the look and the feel and even the popular fantasies of daily life as few organizations before it have done.

In a time when most Americans understand that Michael Jackson and Michael Jordan share more than initials and a first name, an era in which even most school kids realize that he doesn't wear a hat bearing a Nike logo just to keep his head warm, word still reached Beaverton that the Barcelona flap could destabilize the company's carefully nurtured relationship with those who regard Nike as synonymous with athletes and athletics. Seven years earlier, in the spring of 1985, when the first Air Jordan commercial appeared on TV, many Americans had never heard of a slender NBA rookie named Jordan. Then that spring a basketball rolled across an urban court and a handsome kid in baggy shorts standing at the center of the prime-time image caught the ball off the toe of one of his technicolor shoes. He began to move across the I blacktop to the keening sound of jet engines revving before take- off, and by the time the engines had roared at critical scream, Jordan was aloft in a slow-motion tableau so magically drawn out that children who couldn't generate the vertical leap to touch a doorknob could climb right inside the moment.

Jordan stayed in the air, his legs splayed, for 10 seconds, en-j chanting spectators who had never been to a basketball game, The 30 seconds of film moved people all over the country up close to Michael Jordan's genius and his grace, and because of a brilliant alchemy that has since made Nike such a profound force in the culture, the shoes on his feet became as magic carpets. So often since then have Jordan's singular physical gifts been decorated with a superhero's mythos that it is now difficult to locate a three-year-old—or, for that matter, a Trobriand Islander or an Inuit hunter—who can't tell you that Jordan is a Nike man. Schoolchildren recently surveyed in China agreed that the two greatest men in history were Zhou Enlai and Michael Jordan, who plays basketball for a living in Chicago, Illinois.

Inside Nike, Jordan and the dozens of other marquee athletes on its team of "consultants" are living representations of the company's belief in the highest moral tenor of athletic pursuit. "Michael holds us to our values," Nike executives will say. Those values inform the corporate goal of "enhancing people's lives through sports and fitness." Over and over these executives proclaim that Nike's success is predicated upon a commitment to "keeping the magic of sport alive."

Among the human passions that can be successfully draped over consumer products—sex, rock 'n' roll, money, sports—all the nobility and pathos of sport has been embraced by the people of Nike as an animating principle and reason for being. The chairman of Nike, Philip Knight, understands that the secret of Nike's success resides along a delicate and emotionally charged progression that connects the company, the consumers and the abiding fantasies that are tethered to sports. On their way to the feet and the closets of the world, the shoes pass through what Knight calls the "life force" of sport. Knight believes that sport "is the culture of the United States" and that, before long, it will define the culture of the entire world.

Knight and the other leaders of Nike were stunned by the perception that Jordan's loyalty to the corporate cause in Barcelona was bad for America and for sports. The whole idea of Nike had been to build a pedestal for sports such as the world had never seen. Nike employees labor for "an athlete's company," an organization run by and for athletes. Although company officials acknowledge that six of 10 Nike customers will never wear their shoes for their intended use, employees still work with the intensity of athletes on a roll, to serve not the consumer but the serious athlete who at least dwells in the imagination of millions of people living in these muscular and sports-minded times.

With impressive speed Nike has come to signify status, glamour, competitive edge and the myriad intricacies of cool. Especially for the young, Nike shoes conjure up a yearning and fascination that for much of the century has been inspired by cars. Just as generations coming of age during a loftier moment for industrial capitalism dwelled on the automobile, young people all over the world now grow up dreaming at night of Nikes. The company receives dozens of drawings every week from children who understand the technicalities of heel counters, crash pads and functional grooves in the way that many of their fathers understood overhead camshafts and four-barreled carbs. One eight-year-old scrawled "The New Air Jet, just $303!" across the bottom of a drawing of a combination basketball shoe and tactical-assault weapon that now hangs in the office of a Nike designer. A "brand power survey" that Nike commissions each year indicates that in a perfect world, the shoes that 77% of the teenage boys in America want—as opposed to ones they actually have or can afford—are Nikes.

Only weeks before Jordan and his Nike teammates sparked international controversy in Barcelona, a new palace of shoes called Nike Town opened in downtown Chicago. The 68,000 square feet of retail space is replete with a basketball court, giant tanks of tropical fish and vivid Nike imagery from ceiling to floor. Within a few weeks Nike Town had supplanted the Lincoln Park Zoo and the Shedd Aquarium as the most popular tourist attraction in Chicago.

The athletic shoe might seem to be an unlikely seminal artifact of these last years of the 20th century, but that is clearly what it is. The shoes have spawned the same sorts of popular obsessions and high-profile companies inspired not so long ago by the airplane, the automobile and the computer. And the shoes and all of the imagery and emotion surrounding them have made Nike one of the great success stories of the post-World War II era.

In the 10 years following the company's launch under the Nike name at the 1972 Olympic track and field trials, in Eugene, Ore., sales grew at an average rate of 82%, and profits doubled every year. Back in 1964, when the company was a part-time fantasy of Knight's called Blue Ribbon Sports, he sold only 1,300 pairs of running shoes from cars and card tables set up at local track meets. This year Nike will probably sell close to 100 million pairs of shoes—nearly 200 pairs for every minute of every day.

A $2 billion company in 1990, Nike all but breezed through the recent recession, its revenues almost doubling by 1993 to a sum as large as that generated by all the TV deals, tickets and paraphernalia of the NBA, NFL and major league baseball combined. More than one in three pairs of athletic shoes sold in the U.S. are Nikes. Sales of the elite line of eighth-generation Air Jordans alone dwarf all the basketball shoe sales of Converse, the reigning shoe king of court and blacktop not long ago. Nike's newer line of Robinson-and Barkley-connected Force shoes and its Pippen-endorsed Flights account for more business than all the basketball shoes sold by Converse and Adidas.

One of five Nike shoe sales is currently rung up outside the U.S., mostly in Europe, and within a few years company officials expect foreign revenues to surpass those in the U.S. Though the latest Nike Air Max model retails for 299 Dutch guilders in Amsterdam—more than $155—the shoe is as essential to young people along the canals as bell-bottoms were to young people in San Francisco 25 years ago. When Nike recently opened up a small outlet in Shanghai, hundreds of people waited in the dark for hours to be the first among the billion to own all-American icons for the feet.

But Knight has always said that Nike's allure was tenuous, so when enraged phone calls continued to pour into Beaverton in the wake of events in Barcelona, he realized that the delicate balance of forces responsible for Nike's success was out of kilter. There just wasn't much he could do.

Knight hadn't gone to the Olympics, though he could have sat beside princes and prime ministers. He often appears to underscore his power by not showing up at major events. His habitual avoidance of the fray has caused him to be characterized as shy or even eccentric, but his distant style in no way compromises his determination to win every game he plays. Knight manages the Nike empire by nuance—a raised eyebrow here, the jingle of keys in his pocket there, a yawn. When he does talk, he speaks in rapid-fire bursts, often punctuating lines with a little humming noise or a laugh, as if he's already bored by a listener's effort to catch up with his galloping cogitations.

As reports continued to come in from Barcelona, Knight realized that a passing comment he had made five weeks earlier was probably responsible for the situation. After the Dream Team tune-up at the Tournament of the Americas in Portland, Ore., Knight had gone out for dinner with Jordan. Jordan told Knight that Dave Gavitt, the president of USA Basketball, had sprung the special medals awards outfit deal on the players in the locker room after practice that day.

"I told him, 'Dave, I have a big problem with this,' " Jordan said to Knight. "I said, 'We're like hired guns in this thing. Let's not pretend we're anything else. All of us have endorsement deals. How can you have sold these rights and expected us to wear these things?' " Jordan also told Knight that Gavitt had vowed to "fix the problem."

"Good going," said Knight, though as the calls poured in, Knight wished he had said something less rousing to his most famous part-time employee. On the flight to Europe, Jordan noticed that one of the clauses in a legal release Gavitt had asked him to sign required him to wear the Reebok warmups on the medals stand. He crossed out and initialed the offending clause. A few days later, on a flight to Barcelona from the Dream Team's first stop, in Monte Carlo, Jordan and the others were informed that they would indeed have to wear the Reebok sweats on the stand if they wanted to get a medal. Jordan was still furious when he arrived in Barcelona. "No way I'm wearing Reebok," he told reporters.

"Me neither," Barkley chimed in.

That residents of the Nike-consuming public assumed Knight to be in control of the situation was not difficult to understand. Orchestration, after all, is something Nike does as well as any company in the world. While other sports-apparel companies offered hospitality suites in Barcelona, Nike had converted a nightclub into an elegant ring of quiet, enclosed "pods" in which athletes and other VIPs could relax and chat. The place was full of fax machines and phones and food and, as always, mountains of athletic apparel and shoes to give away. But there was no joy in Barcelona when Jordan and the others decided to take their anti-Reebok stance. Knight complained that the USOC was acting as if he had "a magic wand."

Nike's director of sports marketing, Steve Miller, an ex-Detroit Lion and former athletic director at Kansas State, huddled in Barcelona with the company's chief pro basketball executive, Howard White, who had been a point guard at Maryland in the early '70s and later coached there. Howard talks to Jordan often and says he believes that "Nike and Michael have become inseparable—like one thing, like one family." White knew the public would not understand that Jordan's refusal to budge had roots in a fight Jordan and Nike had been waging against the NBA ever since Jordan turned pro.

Even before that first Air Jordan commercial aired, the league had banned the shoe, and at the All-Star Game seven years later Jordan and Nike were still battling the NBA. The league's caricature T-shirt for the '92 game showed only nine of the 10 All-Star starters because Jordan had legally "taken back his face" and transferred the rights to his likeness and name to the company that was so instrumental in making him universal.

Nike's association with elite U.S. athletes dwarfs that of any other company. Of the 320 or so NBA players, 265 wear Nike shoes, 82 of them by contract. Half the teams that have won the NCAA basketball championship in the past 10 years have worn Nikes, and more than 60 big-time colleges are "Nike schools" because their coaches are Nike coaches. Two hundred seventy-five NFL players wear Nikes, as do 290 major league baseball players. If the medals won by the Nike track and field athletes at Barcelona were added up, Team Nike would have beat out the Unified Team.

The latest annual report from Nike all but drips with corporate attitude, mocking "conventional wisdom" in light of the recent triumphs of various Nike athletes: "No one will ever break [Bob] Beamon's long jump record at sea level, Andre Agassi can't win on grass. Nolan Ryan is too old. Communist athletes won't understand capitalist financial incentives. A black man can never be a good company spokesman in white America."

So while Nike piously proclaims that its mission is to protect the lofty ideals of sport, the company also values iconoclasts with big-time attitudes more than it does any national governing body or league. Nike executives love Barkley, Agassi, John McEnroe, Ilie Nastase and even Deion Sanders—the kinds of athletes that embarrass grown-ups. In the eyes of Nike, the McEnroe many observers consider to be spoiled and immature is, in fact, an anti-elitist thorn in the side of a hidebound tennis establishment. Asked about Sanders's dumping a bucket of water on sportscaster Tim McCarver during last year's baseball playoffs, Nike president Dick Donahue asked, "What's wrong with that?"

When Knight started his business the dominant athletic shoe company was Adidas, an elitist German concern that Nike's founding fathers thought was deeply hooked into corrupt and aristocratic international sports authorities. The Nike guys, on the other hand, were athletes—most of them former competitive runners—and through their athletic pursuits they had acquired "authenticity." The company is powered to this day by a cultlike belief in authenticity. The word is repeated like a mantra in Beaverton. Authentic shoes for authentic athletes.

But for all its reverence of its upstart past, Nike has grown up to be a large and prominent institution. The company's anti-bureaucratic and antiauthoritarian streaks—and even its dedication to gifted athletes who swim against the tide—have lately become obscured at times by the sort of faceless and morally questionable imagery more often associated with corporate Goliaths like Exxon and General Motors. This was never part of the plan.

Only eight weeks after the events in Barcelona, press reports emanating from Charlotte, N.C., revealed another example of Nike's apparently doing business in ways that were typical of other big, profit-minded businesses. Shortly after the Charlotte Hornets had drafted Georgetown's star center, Alonzo Mourning, a reporter aware of Mourning's unusual shoe contract asked Mourning who he would be working for during the coming season. "I work for Nike," said Mourning.

The sports-business grapevine spread the word that Nike was at it again. Before the draft Mourning had signed a revolutionary agreement calling for Nike to pay him a large guaranteed sum to play pro basketball and endorse various products. Mourning says he was more than willing to "let Nike experiment with me," as he later put it, because Nike was the means by which an American athlete becomes what Mourning calls a "household name."

Like Jordan and Barkley and Agassi before him, Mourning was after something not deliverable by performance alone. When it came time to negotiate with the Hornets, Mourning held out, and fans and reporters were quick to blame Nike. After a series of reports in the Charlotte Observer indicating that Mourning might never play for Charlotte because of the financial security Nike had already assured him, one angry letter to the editor asserted that Nike's $16 million deal with Mourning had "taken the spirit out of the game."

He finally came to terms with the Hornets in November 1992. Just a week earlier a million-dollar ad campaign against Nike was announced by an association of labor unions and manufacturers called Made in the USA. The association had stated that consumers would be asked in magazine and newspaper ads to send their "dirty, smelly worn-out" sneakers to Phil Knight. The idea was to call attention to the loss of domestic shoe-manufacturing jobs to low-cost foreign producers—which make almost every branded athletic shoe sold in the U.S.—and to repeated accusations that third world factory workers making Nikes earn as little as 14 cents per hour.

More than 200 U.S. corporations are, in fact, larger than Nike in terms of revenue, but it's hard these days to think of another company that generates so much popular passion. National TV news programs picked up on the mention of low wages and poor working conditions endured by Nike workers abroad, and the Made in the USA campaign generated so much publicity from the mere announcement of its intentions that the association never bothered to run more than one ad.

"We've become a discrete set of values for our consumers," says Nike p.r. director Liz Dolan, looking back on almost a year of incidents that had in some ways marred the perception of the company. "Because we're connected to sports, our success is perceived as something bad. If a computer company in the Silicon Valley grew so quickly that profits had doubled by the year, created thousands of new high-wage jobs and delivered buckets of money to its shareholders, the public would be thrilled."

Seven years ago Knight proclaimed that "some company will become the IBM of the sports-apparel industry within the next five years." But now that Nike logos mark the landscape far more prominently than those of IBM, now that Nike has risen above most of the other organizations connected to sports, the corporate quest is to not become the floundering IBM of the sports business. Nike is clearly the most efficient and powerful organization in sports, yet it exists in a hypercompetitive sphere that has been dominated by four shoe dynasties over the past 25 years. Knight believes that these empires, unlike auto or computer dynasties—but just like sports dynasties and batters on streaks—tend to ascend to brief, Icarian moments. Make the mistake of talking to a Nike exec about the company's "ownership" of half the basketball-shoe market or 75% of the cleatedshoe market or 40% of the running-shoe market, and he or she will break in with, "It's borrowed. No market in this business ever is owned."

"The brand cycles in this industry last only around seven years," says Knight. "You've got to reawaken the customer every season, yet there are these larger cycles. First Converse had its day, then Adidas, then Nike. The cycle took us from zero to a billion dollars in a short time, and suddenly Reebok had its years in the sun. Then Nike was reinvented during the late '80s, and now we're back on top."

"There is no doubt that this industry is looking for something new," says Gary Jacobson, a Wall Street analyst who specializes in the athletic-shoe industry. One of every three athletic shoes sold in the U.S. may be a Nike, but the American market has become saturated. The American closet is so full of colorful shoes that consumers tend to replace only those that have worn out. Nike talks of the urgency of deploying the "global power brand," of figuring out how to dominate the imagery of sports abroad as in the U.S.

So much of Nike's public presence is hitched to the abbreviated careers of its athletes that staying on top means establishing a presence at every draft, in every sport or tournament and on every team. "If we're a giant, then we're a pretty fragile giant," says Knight. "Every six months is like a new life. We can't take our eye off the ball, because if we lose it, we'll have a bitch of a time getting it back."

But as the company strives to maintain its lead, corporate imperatives seem to collide with the perceived values that Nike claims it is protecting. Nike has therefore become a lightning rod for all the popular ambivalence about the convergence of American business and American sports, and for an increasing uneasiness over the way sports preoccupy the public consciousness. Lately it has occurred to Knight that the sheer force of Nike's image-making has perhaps created expectations capable of blindsiding the company—and Knight, as all who know him confirm, is a man who likes to see what's coming.

It was a Japanese reporter who rose at the Nike-organized press event in a Barcelona movie theater before the medals-stand showdown. "Mr. Jordan," he said, "how does it feel to be God?" Jordan grinned his famous grin and deflected the question, but over the next several months, Nike's leaders began to wonder if, as Knight had said, "the hype had finally gone too far."

"Do I think Nike creates images for athletes that exceed their capacity to perform as athletes or even as people?" Knight says. "My short answer is yes, but it's not just us. It's TV that defines the athletes. They perform on television, and we just expand on the image. Maybe these two things do come together and create something that nobody can live up to."

In 1988 Jordan was on the verge of leaving Nike to form his own marketing company. Before Nike raised his guaranteed fee and increased the equity portion of his deal, Jordan was at a meeting where, he recalls, Knight said in a moment of pique, "Michael Jordan without Nike won't mean anything."

But by 1992 Jordan was being asked how it felt to be God and was long over his anger at Knight's words (which, Knight contends, were misinterpreted in the first place). And after nine years with Nike, Jordan says he has begun to weary under the weight of his image. "Nike has done such a job of promoting me that I've turned into a dream," he says. "In some ways it's taken me away from the game and turned me into an entertainer. To a lot of people I'm just a person who stars in commercials."

Knight sent Jordan a written confirmation that he didn't consider the medals-stand uniform a violation of Jordan's Nike contract. "But Phil didn't realize how loyal I really am," says Jordan. "I think I surprised him."

Before the medals ceremony Jordan said to his attorney, David Falk, "I have to believe what I believe in." Jordan told Falk he was going to put tape over the Reebok emblem in defiance of Olympic officials. "I've got a better idea," Falk said.

So after a week in which Reebok had garnered more publicity from a few cents' worth of contested thread than from all their millions of dollars' worth of prime-time advertising, Jordan and his five fellow Nike endorsers, as well as the six players under contract to other shoe companies, all mounted the medals stand with their collars rolled back to obscure the Reebok name. Jordan stood in the middle with Old Glory draped over the emblem.

Gavitt was philosophical as the "incident" in Barcelona finally passed into sports-hype history. "Michael was nothing but a superstar through the whole thing," he said. "And Phil Knight did everything he could to help. But you've got to say one thing about those guys at Nike: Like 'em or not, they march to the beat of a very separate drummer."

Except that at Nike they don't really march. They all run like people afraid of being caught from behind.

II. On Campus

At 8:30 a.m., Knight's black Acura NSX, sporting a NIKEMN license plate, growled through a gap in an earthen wall surrounding the 74 acres of the Nike World Campus, 10 miles west of Portland. Knight readily admits to having a "thing" about cars. He's not into collecting them—though he does have a Lamborghini Diablo and a Ferrari Testarossa, and he did have a Porsche 911 Turbo until he racked it up last year. "I get sleepy going slow," said Knight. "Fast is safer for me. I've collected 85 speeding tickets over years of staying wide awake."

Then Knight flashed a huge grin, his ever-present Oakley sunglasses reflecting in silver hues a panorama of the corporate Xanadu before him. At times he has worn hair arrangements reminiscent of Little Lord Fauntleroy, the early Beatles and a 15th-century monk, but these days Knight—with his longish red-blond curls, close-cropped beard and wraparound shades—looks for all the world, at age 55, like a prosperous, if mellowed, rock star. "I hear that people around here say, 'Phil Knight is our Walt Disney, except he's not dead yet,' " he said. "Kind of a compliment and an insult at the same time, I guess."

A few days earlier Knight's personal net worth had increased by nearly $115 million in a single day due to a $4.50 appreciation in Nike's share price on the New York Stock Exchange. Four weeks before that, when Wall Street analysts figured Nike's quarterly earnings would come in lower than their original estimates, the stock price had shed $15 over four days, and the roughly 25 million shares owned by Knight lost close to $390 million in value—a sum surpassing that spent on Nike's legendary TV advertising over the past two years. "The first time the stock lost $12 in a day it shook me up a little," Knight says, "but now I've unlinked that stuff from personal feelings. Those numbers are just...surreal."

Beyond a fountain leading from 48 flagpoles flying the colors of the nations in which Nike conducts business, younger employees could be seen walking to work beneath covered walkways that connect the John McEnroe Building to the Alberto Salazar Building and the Dan Fouts Building and the Bo Jackson Fitness Center beyond it. None of the young soldiers of Nike wore a suit and tie like the boss, and many seemed to be wearing shoes cooked up in the Nike labs—exotic sports sandals or prototype footwear that in one or two cases wound around the lower part of their legs, in the style of Roman centurions.

With its man-made lakes, stands of trees, ribbons of jogging trails and buildings commemorating the life's work of individuals in some cases no older than 35, the Nike campus is like a shrine to quality-of-life and athletic pursuits contrived as a company town. Nike people refer to the world outside as "the biosphere" or "the real world." "Beyond the berm"—a reference to the close-cropped grass knoll surrounding the campus—lies the America Nike serves and "enriches" through sports and fitness. Inside the berm is Nikeworld, where almost everyone is fit and healthy, where the company pays you extra to ride your bike to work instead of driving, where nobody can smoke and where it's quite all right to work out at the Bo Jackson Fitness Center for two hours at lunchtime, because your entire department will probably be at work until nine at night, nose to the grindstone.

The average age of a Nike employee is 31. The Joan Benoit Samuelson Center is occasionally referred to as the student union building, and when Nolan Ryan recently came to the World Campus for the dedication of the building that bears his name, only a small crowd was present for a ceremony featuring the pitcher because only employees older than 40 were invited.

On campus, employees can get a haircut, do their laundry, get a massage or a complete fitness evaluation, buy Nike products and even shop in a store stocked with the kinds of items appreciated by spouses or children who haven't seen a long-laboring loved one in a while. Carloads of Nike children can be seen being hauled around the Mike Schmidt Building on their way to the Joe Paterno Day Care Center.

Despite the company's startling youthfulness, innumerable employees talk of having opted for a new or second life in Beaverton. "I taught English...." "I'm a reformed accountant...." "I was drafted by the Chargers, but then I blew out my knee...." There are former lawyers who once wrote Nike's briefs, former editors of trade magazines who once covered the company, former politicos and a lot of former vagabonds and ski bums. One executive, David Rikert, is a former Harvard Business School professor who once wrote a case study about Nike.

Former pro and college athletes, former Olympians and near-Olympians, work on every floor of every building. Former distance runner Alberto Salazar works down the hall from Rudy Chapa, another world-class runner who occasionally beat Salazar during their college days. Company road races and bike races are often won in near-world-class times. The sheer athleticism of the corporate culture makes nonjock employees feel the need to follow teams and scores as a matter of protective coloration.

After several rounds of grueling interviews, a recent candidate for an important job managing Nike's environmental programs, a former government official with both a Ph.D. and a law degree, was told by a member of the selection committee that he had just one more question: "Who's Deion Sanders?"

"Well, I don't really know," the candidate replied.

And that was the end of that.

Pro athletes still in their prime are dazzled by the World Campus. Deion was recently supposed to be in Beaverton for a day, but he stayed for three, working out for hours in the beautiful gym at "the Bo" and hanging out with shoe designers to talk about sports gloves that would protect his fingers when he slides and about shoes that could provide the same support as the yards of tape that Sanders used to wrap around his ankles and feet, outside his shoes and socks. (The practice, known as "spatting," is anathema to Nike, which wants its shoes and logo to show on TV.) For his part, Bo loves the campus scene so much that he says he wants to retire to Beaverton and take a job at Nike. ("Yeh, well Bo's crazy then," said Jordan when he heard this. "No way I'm retiring to Beaverton, Oregon.")

On the walls of the arcades connecting the three-and four-story buildings are bronze plaques bearing bas-relief images of athletes whose greatness has been less than fully recognized but who epitomize Knight's vision of the nobility of sport. Along the Nike Walk of Fame, Charley Lau, the highly respected batting coach, shares a place with triathletes and wheelchair road racers. Lots of high-profile tough-guy athletes like Franco Harris and the former lineman Lee Roy Selmon are on the wall too.

Michael Doherty, who makes elaborate films and videos for Nike conclaves and marketing events, booked talent for The Merv Griffin Show before joining the company 11 years ago. Doherty has created hundreds of films in the company's state-of-the-art production facility in the Mike Schmidt Building. Most of them are evocative works that mix the music and imagery of rock videos with slow-motion sports highlights culled from miles of footage. "I can build a whole show around a shoe," says Doherty. "It's not like you're ever short on emotional material. You've got sports."

At Oregon in the late '50s, Knight answered to the name Buck. Buck Knight was a pretty good middle-distance runner on a track team possessed of some of the fastest U.S. milers. He once ran a 4:09 mile, but he was still a "squad" runner, a team guy who was always ready for the dozens of 6 a.m. uphill 400s required by his mentor, Bill Bowerman, Oregon's famed coach.

Knight says that Bowerman was "part genius, part madman, the best coach I ever had," and as every MBA student of the last 10 years knows, it was Bowerman's fascination with customizing what he considered to be the inferior shoes his runners wore that sparked Knight's Stanford business school term paper about a running-shoe start-up. After graduating from Stanford, Knight became a certified public accountant, and it wasn't until JFK was shot—Knight recalls that many young child-of-the-'50s accountants from upper-middle-class homes were asking, "What's the point?"—that he began haunting high school track meets on weekends, the trunk of his green Plymouth Valiant full of Tiger brand footwear manufactured by the Onitsuka Company of Kobe, Japan.

Knight ran Blue Ribbon Sports out of a storefront hole-in-the-wall next to the Pink Bucket Tavern in working-class Portland. Still a part-time employee himself, he hired a full-time salesman, a California kid named Jeff Johnson, who had been a middle-distance runner at Stanford. Johnson had majored in anthropology, but like many other collegiate-level runners, he didn't see how he could hold a job and still do what really mattered in life—which was to run.

From the beginning Knight's animating idea was to promote high-quality, low-cost Japanese shoes, at a time when high quality was rarely associated with Japanese products, and to eventually displace Adidas, the triple-striped German shoes worn by all serious track and field athletes at the time. Johnson and the other runners who joined Knight's team say the Adidas representatives at track meets used to come by the Blue Ribbon card tables stacked with shoes to laugh at them. "It was true geekdom," says Nelson Farris, one of the few original employees who still work for the company. "All kinds of people work here now—assuming, of course, that you love sports—but back then we were all running geeks who didn't fit in."

"It was a way to continue a life-style and still make a living," says Knight.

Four years after Onitsuka began incorporating Bowerman's design ideas into its novel nylon Tiger shoes, Johnson came upon the idea of calling the company Nike. Johnson says the image of the Greek goddess of victory came to him in a dream in 1971. Retired now and living alone in rural New Hampshire—one of a dozen millionaires from the original gang—Johnson says he regarded Knight as a second father.

Bowerman, 82, is a millionaire several times over from his Nike stock and is now vice-chairman of the board. The public road in front of the gateway gap in the berm in Beaverton is called Bowerman Drive. Knight quotes his tough-minded coach every so often, but the Nike figure whose memory and myth evoke the most palpable emotions among company veterans is the charismatic and free-spirited distance runner Steve Prefontaine, who died in a car accident in 1975. Inside the museum room of the Steve Prefontaine Center, visitors can see display cases holding the yellowed shoe molds upon which Prefontaine's customized track shoes were made, There is a letter from the AAU warning Prefontaine to take the word NIKE off his shirt because it violated rules, which he violated all the time.

Prefontaine held seven American records when he died at the age of 24. "To many he was the greatest U.S. middle-distance runner ever, but to me he was more than that," Knight intoned in a somber voice-over for an in-house film produced last year. "Pre was a rebel from a working-class background, a guy full of cockiness and pride and guts. Pre's spirit is the cornerstone of this company's soul." If Knight is Nike's Walt Disney, then Pretaine—forever running fast with Sergeant Pepper sideburns and long hair flowing behind him—lives on as its very own James Dean.

Not long after Pre died, less serious runners began to hit the roads alongside the distance geeks, and the Nike variation on the American Dream soared into the public consciousness. Knight refers to the eight years after Prefontaine's death as "the halcyon days."

By the mid-'70s Bowerman—apocryphal though the details of the legend may be—had poured some liquid latex into his wife's waffle iron one morning before breakfast, thereby inventing the famous sole that made the earliest Nikes feel like bedroom slippers. People who would have had trouble running out of the path of an oncoming vehicle suddenly wanted to jog in a pair of shoes with this new impact-absorbing sole. In 1980 the wild and crazy guys of Nike pulled in $269 million and replaced Adidas as the No. 1 sneaker company in the U.S.

In those years Nike nourished a rogue culture that was predicated on Pre's antiauthoritarian impulses, a determination to work day and night and an equally impressive determination to pursue a good time after hours. In a corporate history entitled Swoosh, authors J.B. Strasser and Laurie Becklund mention beer bashes, a lot of passing out and throwing up and even a case of executive bed-wetting in pursuit of separating the company from staid corporate traditions. "Managers drank and danced and closed the bar every night," Strasser and Becklund wrote. "Even the heads of the company wore jeans and played Frisbee on the big green lawns." Swoosh carries a photo of Knight during the halcyon days arriving at a Nike event in drag.

Nike became a publicly traded company in December 1980. Several families that had pitched in $5,000 each when Knight was scrambling for capital early on ended up with Nike shares worth $3 million. Those shares are worth $30 million today.

Not long after the company went public, Nike pioneers sensed a change setting in. "I felt useless," recalls Johnson. "I'd been elevated about 40 levels above my proper place—designing and selling shoes. I was being wheeled out for corporate dog and pony shows like a museum piece: 'Here's our first employee!' "

So in 1983 Johnson, then 41, left Nike, and he was followed by several other original employees a few years later. "They were all millionaires, so they didn't have to put up with the frustrations of transition to a managed company," says Knight.

Not long afterward Nike went into a deep slump. Knight says the company "lost its way." Serious athletes wanted Nikes on their feet, and company leaders believed that meant their shoes were the best. "Nike athletes won 65 medals at the 1984 Olympics," says Farris. "We were growing by tens and then hundreds of millions of dollars at a leap, but with no internal changes to back up the growth."

Nike's ace marketing man at the time, Rob Strasser (the husband of the Swoosh coauthor), was heard to proclaim back then that a serious sports company like Nike would never "make shoes for those fags who like aerobics." But Nike employees sitting in airports and looking at feet on urban streets saw nothing but aerobic shoes—flimsy white ones made by another upstart company, called Reebok.

In 1986, after Nike had fallen to No. 2, behind Reebok, and the stock price had gone from a high of $28 to less than $7 a share, Knight told a meeting of his employees in a Portland warehouse: "We just crossed a billion dollars in sales, but I'd rather be the president of a great $500 million sports and fitness company than the head of a badly run billion-dollar sneaker company."

Four hundred employees were laid off, and by the end of the year, 275 more were cast out. The second layoff in particular seemed to knock some of the child out of the company. Bowerman's Lombardiesque observation that "nobody ever remembers Number 2" was repeated often, and the raucousness was replaced by a determination never to get blindsided again.

By the time of "the transition," between 1985 and '87, Jordan had signed on, and Knight had decided to put the shoe show on national TV. Nike's grass-roots basketball man at the time, Sonny Vaccaro, says that at first, Knight and his wheeler-dealer adviser on athlete promotions, Howard Slusher, didn't even want Jordan on their team. However, the running boom was fading fast, the NBA was becoming increasingly marketable, and consumers tended to wear their court shoes on the street.

The idea of Air Jordan was to create a "segment," a marketable package linking the shoes, colors, clothes, athlete, logo and, most important, inspired television advertising that would set the other elements of the marketing machine into motion. Air-cushioning technology developed for runners was built into the Jordan shoes, and though the famous first model wasn't much technically, the segment idea worked. Eventually Air Jordan was joined by the Air Force segment, designed for players like Barkley and Robinson, who hit the court hard. The Air Flight segment was designed for players who imagine themselves as deer-like leapers and dream of flying across the lane like Pippen.

The new marketing machinery pulled technology across divisional lines again in 1987 to invent cross-trainers, shoes designed for people who participate in a variety of sports. That same year Nike appropriated what many observers still believe to be a sacred item from another cultural realm, the Beatles song Revolution, to promote running shoes. Bo, according to Nike, could "do anything" in '88, and in '89 Bo quite simply knew. Whatever a consumer wanted Bo to know, he knew. "Just Do It" had been inserted in the popular brain pan in '88, and for any "it" an American wanted to pursue, Nike had the right pair of shoes.

The never-quit credo of Bowerman, the athlete-against-the-establishment ethic of Prefontaine and the lessons of Reebok's rise are discernible everywhere in a Nike corporate world dominated, nine to one, by employees who weren't on the payroll during the layoffs and who, for the most part, were children when Prefontaine was killed. Only Knight utters the officially proscribed word fashion, because fashion is a Reebok term. "We say design instead," says Knight. Nike employees who leave for other shoe companies often become nonpersons. A majority of the current employees claim never to have read Swoosh. After all, one of the authors is married to Strasser, who left Nike a few years back and now runs Adidas USA.

A recent survey showed Nike to have the highest levels of understanding and acceptance of company policy ever recorded by the national firm that conducted the study. Members of the Nike corps of EKINs—shoe experts in their mid-20's who travel from store to store to talk to retailers about the technicalities of new Nike shoes—are known to tattoo a Nike swoosh on some part of their bodies, usually a foot, but not always.

A Nike old-timer of 37, a serious sub-200-minute marathoner named Tom Hartge, stood in front of a blackboard one morning, trying to explain the company's latest version of "the matrix," a free-ranging system of corporate governance designed to mediate the romance of an entrepreneurial past and the mundane requirements of a big company. Hartge, the company's divisional marketing manager for running, is pure Nike, so much so that colleagues often say he embodies "the heart and soul of Nike." He reads track magazines, trains on the Jeff Johnson track and refuses to drink a beer made in one of the local microbreweries, because it is partially owned by the apostate Strasser. And he knows as much about running shoes as anyone in the business.

Nike still dominates the running category in the U.S., but it is now only the fourth-largest category at Nike. (Basketball is first, cross-training became No. 2 in 1990, and, surprisingly perhaps, the mini-Air Jordans and little Agassi shoes have made the kids division No. 3.) Along the top of the blackboard Hartge listed Footwear, Apparel, Advertising, Sports Marketing and Retail. A "silo" descended below each category indicating all the work and workers in each area. "My job is to influence everything that goes on across the matrix," said Hartge, drawing a line into and through each silo. "I'm an influence broker."

Those who "bounce around the matrix," as they say at Nike, soon realize that the capacity to influence others is the key to intracorporate success. Hartge talks about "lobbying" various internal constituencies to get things done. People who don't "like to get in other people's faces," as one executive puts it, don't do well at Nike.

Over in the Jordan building a 32-year-old designer named Bill Worthington held up his latest invention and stared at the object as he spoke. "It took nearly seven months to happen," he said. "It took a lot of screaming and team-building and refusing to give up. There was skepticism over whether the consumer could appreciate its technology or understand its...personality."

The startling shoe in Worthington's right hand looked like the hoof of some great purple, silver, black and green beast. Deep grooves subdivided the sole of the shoe into separate pods—a word that comes up often at Nike. The pod idea cooked up by the techies down in advanced product engineering is intended to replicate the natural design characteristics of the 26 bones, three arches and innumerable ligaments and muscles inside the foot. A zebra-skin pattern ringed the cross-training shoe below several arrangements of designer synthetics that were glued or sewn to the "oxidized-green"-colored shoe.

Worthington pointed out a huge Velcro strap designed to replace the laces, and another strap that led up to yet another silver, black and purple Velcro strapping device at ankle height, this one an "anti-inversion" apparatus designed to keep athletes from turning their feet inward while airborne and breaking bones or straining ligaments when they land. A former industrial design student, Worthington decided to call his new baby Air Carnivore. "I'd played around with shoes inspired by dinosaurs before," he said. "I imagined calling one the Air-Odactyl. But the idea of the Carnivore was to make something that looked more like an animal than a man-made consumer product."

Nike's chief shoe designer, Tinker Hatfield, a former world-class pole vaulter, likes to say that one's mission within the matrix includes a "license to dream," to shock and dazzle the company's developers, who field the design concepts and shepherd them along a sampling process. That process extends from Beaverton to China, Argentina, Indonesia and South Korea. As press and labor-group criticism of Nike's business practices abroad has increased, the company's public-affairs officials have emphasized that from the beginning Knight envisioned designing shoes for athletes in Oregon and having them made in Japan. Moreover, only a handful of the departed 65,000 U.S. shoe-manufacturing jobs that the Made in the USA campaign's anti-Nike rhetoric referred to in 1992 were ever connected to Nike.

"We're not gouging anybody," Knight says. "Our gross profits are around 39 percent, right on the industry standard. We make our profit on the volume. A country like Indonesia is converting from farm labor to semiskilled—an industrial transition that has occurred throughout history. There's no question in my mind that we're giving these people hope."

But when Nike points out that its 2,800 rupiah ($1.35) entry-level daily wage in Indonesia is five times that of local farmers, it is comparing factory wages to farm incomes, only a very small portion of which are cash. Explaining the cost of molds, packing, freight and hefty duty fees—or pointing out that the U.S. never had an infrastructure of high-tech athletic-shoe manufacturing, and that all athletic-shoe companies are in the same boat—is not always satisfying to a public that's reminded daily of the fat endorsement contracts Nike has with scores of athletes.

Nike presents its foreign factories with a set of standards that include antidiscrimination clauses and demands for health-care programs, but enforcement is difficult to monitor. For Nike, wages in the third world remain subordinate to the creation of high-quality shoes that can be sold for reasonable prices. As long as that is the case, the foreign-labor controversy—for Nike and any other U.S. company that manufactures products abroad—will not go away.

The designers in the Jordan building know that the average pro soccer player runs 10 kilometers during a match. They know that Jordan runs about 2½ miles per game and that after an average leap he lands with a force that's three times his body weight. (Barkley comes down with a force that's seven times greater than his weight.) Because tennis players often drag their toes when they serve, Nike technicians helped develop a material that can be placed against an abrasion wheel for 3,000 cycles without wearing down. When wearers of the first generation of all-purpose cross-trainers complained that the soles of the shoes wrapped around the pedals of their mountain bikes, Nike technicians came right back with the Air Revaderchi, a shoe with a thermoplastic shank that permits the sole to bend only one way.

"You can't create an emotional tic to a bad product," Knight has said, "because it's not honest, and people will find that out eventually." But Knight adds that one of the lessons of "the hard times" during the 1980s is that "what the shoe looks like is important. We didn't put any emphasis on what those outside Nike call fashion then. We thought that looks didn't matter."

"I designed the Carnivore for serious athletes," says Worthington. "When it comes out, there won't be any advertising, and there won't be an athlete to help promote it. The shoe"—he turns his invention pod-side up—"will have to sell on its merits. People will tell each other about the Carnivore. They'll say, 'Here's a new shoe that represents the aggression of sports.' "

III. The Show

Deion Sanders slouched in a wooden chair set in the middle of Aloha Stadium in Honolulu, yawning so long and loud into his lavaliere microphone that the sound technician had to adjust the volume. Neon Deion was heavily accessorized on this day before the Pro Bowl, sporting dark sunglasses, gold bracelets, rings, earrings and a cap trimmed with a Nike swoosh. On the ground below Sanders were a pair of high-tech shoes from the new Deion-endorsed Air Diamond Turf line—gold-mesh, jet-black-and-white cross-trainers the guys in the Jordan building came up with after considering Sanders's 18-carat jewelry and his affection for black Lamborghinis.

In the stadium Sanders said the earpiece he was wearing reminded him of his days working in a fast-food outlet. "But minimum wage didn't cut it," he said. "I wanted"—yawn—"the finer things in life."

"I'm Tom Phillips," a voice suddenly reported in Sanders's earpiece, "category marketing manager for cross-training."

Phillips was speaking from the Nike booth at the sporting-goods industry's annual Super Show in Atlanta, where it was five hours later than it was in Hawaii. As Phillips went on about Nike's desire to "satisfy all the needs of its athletes," to render them as "something more than figureheads...part of a big family effort," Sanders began to wake up and assemble a presence suitable to the moment. By the time Phillips had introduced Sanders to a handful of elite conventioneers among the 96,000 who had come to the mammoth Atlanta show at the Omni Center, Sanders's boyish grin was duly affixed. It was showtime in Nikeworld, and when the red light went on in Hawaii, Sanders was laughing and smiling "via satellite" and more than ready to explain that "playing two sports makes me feel like a kid, like kids who play their sports all year round," and to announce that he believed in his heart "you got to look good to play good."

Outside the multimillion-dollar environment that 65 Nike employees had unpacked from four railroad cars and numerous semis, the sporting-goods bazaar seemed to go on forever. The show covered 25 acres, and everywhere you looked—more than any other single sporting thing—there were shoes. Nike ads dominated displays on walls at the Atlanta airport baggage area. Nike images lined billboards along Interstate 85 on the way into town. The Nike team had turned the ballroom at the Omni Center into a shrine to "The #1 Sports and Fitness Company in the World." This reference to Nike's dominance vaulted in huge letters across the entrance to an escalator leading to the mazelike sound-and-light show that was the Nike outpost in Atlanta.

Exhibitors at the four-day Super Show are not allowed into the enclosed booths of other manufacturers. Indeed, most members of the Nike army in Atlanta tended to avoid anything beyond the most casual contact with competitors. This was sometimes difficult for veterans because—as with General Motors, Sears and IBM in their heyday—former Nike employees have seeded the entire athletic-shoe and apparel industry with talent.

Jim Moodhe was Nike's first sales manager and one of those who became rich when the company went public. Moodhe retired from Nike a year later, at the age of 34, to drive race cars and, he says, to pursue other "Walter Mitty dreams." Now he is the president of Guess Athletic, one of a dozen or so brands that reside on the tier below Nike and Reebok.

Instead of offering Bo in person or Deion by satellite, Guess featured Anna Nicole Smith, the model from the Guess apparel ads and current Playmate of the Year. "From the crumbs that fall off Nike's plate you can catch $300 million to $400 million worth of yearly sales, which isn't half bad," Moodhe said. "The trick is to find a niche where they don't dominate."

It was during the Super Show that Adidas USA announced that Strasser was taking over. He would be joined in his effort to revive Adidas by Peter Moore, the designer of Nike's original Air Jordan line and of many other Nike shoes. "Adidas people were the Huns," Johnson noted from his retreat in New Hampshire when he heard of Strasser's move. "I would starve to death before I'd work for Adidas."

Over at the Reebok booth the vice-president of research and development, the vice-president of sports marketing, and the vice-president of advanced product research were only a few of the onetime Nike people working for "the R company." Said John Morgan, who is now Reebok's vice-president of product marketing for sports and who worked for Nike for 14 years, "As soon as you leave, you get a lesson on friendship. People I worked with turn their heads when I see them in the hallways. Some of my closest friends in the company don't return my phone calls anymore. It's crazy, because when you boil it all down, what we do is about sneakers."

As Nike is in so many ways an organizational and philosophical reflection of Knight, Reebok is the brainchild of Paul Fireman, a former salesman who decided to acquire the right to sell Reeboks in the U.S. at a trade show in 1979. Within a decade he had run sales from $1.5 million to $1.8 billion, a rate that in percentage terms surpassed Nike's growth. Knight clearly considers Fireman a late entry and something of a faker, a pretender. Most Nike employees believe that Reebok people don't really care about sports and that Knight loathes Fireman for being less than authentic and for what Reebok did, however briefly, to cause Nike's layoffs.

Knight also believes that Reebok and Fireman were behind a 1990 call to boycott Nike by Jesse Jackson's Operation PUSH. Nike's Oregon officials were unfamiliar with Chicago-based Operation PUSH when the group first demanded that Nike award contracts to minority businesses and hire blacks in proportion to the business it did in black communities. The episode became public after Nike held a private meeting with PUSH officials, at which PUSH maintained that Nike had no black vice-presidents or board members, which was true, and that it sold 40% to 45% of its products to black consumers. Nike countered with sales records indicating that 13% of its sales were to minority customers. In the end polls revealed that the public supported Nike three to one. The boycott fizzled, and Georgetown basketball coach John Thompson, who is black and was already under contract to Nike, was soon thereafter named to the Nike board.

Nike's feud with Reebok is so intense that Jordan says he zeros in with a special intensity upon Reebok players like Dominique Wilkins and Shaquille O'Neal. "But this thing is between these guys," says Jordan, referring to Knight's visceral feelings toward Fireman and Strasser. "It involves things that we can't even know about."

When it was recently suggested to Knight that the demonization of a competitor might be a serviceable management and morale-building tool within the company, he grinned. "Especially when it's real," he said.

IV. The Hero Factory

The day Bo's dire medical prognosis led the Kansas City Royals to cut him two years ago, Jackson telephoned Knight. "I just want you to know I'm going to play baseball again," Bo said.

After the pain caused Jackson to quit a comeback attempt with the White Sox the following season, he phoned again. "I'm going in for a hip replacement," he said. "I promise I'll be back." A few years earlier Knight had been infuriated when some Nike executives had taken it upon themselves to pay $100,000 for an endorsement deal with a kid from Alabama who could have played pro football but opted for minor league baseball. Two years later, in 1988, after Jackson had distinguished himself as an NFL running back while playing only half a season with the L.A. Raiders, Nike began promoting Bo as nothing less than "the world's greatest athlete." Shortly before Jackson phoned Knight with his pledge to play again, a Nike executive advised Knight that the hip injury meant "Bo won't be able to tie his shoes," let alone play pro sports in them. But to Knight, Jackson had proved himself the very essence of a Nike guy.

The "Bo Knows" campaign begun in 1989 remains Knight's favorite. Jackson helped Nike sell historic numbers of shoes. That Bo was a tough kid who was headed for trouble before turning to sports, and that he was now determined to come back from an awful injury in defiance of conventional analysis, made him even more of a Nike guy. What's more, if the pathos of a successful comeback could be harnessed for marketing purposes, Bo might be even more promotable. "We're with you, Bo," Knight said on the phone.

Shortly thereafter Nike marketing executives helped coordinate a new ad campaign that spoke directly to the hip injury. Jackson's stats in spring training this season were updated daily along the grapevine in Beaverton, and when Bo hit a home run in his first at bat on Opening Day at Comiskey Park, Nike took out a full page in USA Today that said only BO KNEW.

In 1992 Nike spent some $250 million to create consumer desire through the association of products and sports, but this combined ad and "promo" (the in-house term for endorsement deals) budget does not include the huge royalties paid to some athletes when their signature products take off. Two decades ago the meager contracts offered Nastase and Portland Trail Blazer Sidney Wicks for wearing Nikes stretched the corporate budget. A decade ago the $100,000 a year paid to McEnroe was considered scandalous. And when Falk negotiated a $3 million, multiyear Nike contract for Jordan two years after that, it looked like the endorsement coup of the century.

These days Jordan rakes in more than $20 million a year from Nike and at least another $20 million annually from other endorsement deals. Jim Courier's interlocking guarantees from Nike might make him $26 million over four years. Agassi, who has been under contract to Nike since he was 16 and gets a $2 million-per-annum guarantee plus a royalty on certain items, is said to have been infuriated by Courier's numbers.

"The size of the payments to coaches is what's gotten all the attention lately," says Knight. "The first coach we ever paid was [former Oregon basketball coach] Dick Harter, in the '70s. After two or three years of trying to get shoes on the school, we heard that he had a deal with Converse for $2,500. So we said, 'If that's how it works, we'll pay him the $2,500.' The whole March Madness phenomenon took off on TV, and the numbers went up."

"The whole thing happens on TV now. A few years back we were extremely proud of a novel, three-quarter-high shoe we'd developed. But we only sold 10,000 of them the first year. Then John McEnroe had ankle trouble and switched to the shoe. We sold 1½ million pairs the following year. The final game of the NCAA basketball tournament is better than any runway in Paris for launching a shoe. Kids climb up next to the screen to see what the players are wearing."

Strasser used to say that "each sport has a separate dream, and we must design shoes that address each dream." But since 1987, as Nike has changed from a shoe company into what Knight and the others have called "a marketing organization," the strategy has been to ascribe to each dream a Nike association that often entwines premier athletes with a pair of shoes.

The work of drafting, balancing and maintaining the Nike endorsement team—and the trick of matching athletes with new products and new imagery—requires a particular, almost metaphysical vision of the sports landscape. If Nike is going to spend millions "presenting its athletes as whole people," as Knight has put it, taking the time to hang out with them and build them flashy shoes that conform to their personal tastes and obsessions (as Sanders's cross-trainers reflect his jewelry and Courier's fascination with baseball is the basis of his clothing line), the company says it can't afford some bland Mark Spitz.

"When I scout and draft a Nike basketball team," Howard White recently told a gathering of sports marketers in Beaverton, "I'm looking for attitude and style. If I were pulling together a competitive basketball team instead of a Nike team, I might need a great center, a player like a Brad Daugherty. He'll get everybody involved and help you win. But a player we draft has to represent something. We consider elements of style. Does he excite anyone? If he can't move people and offer a certain attitude, then he just won't do much for us as an endorser."

Nike guys don't have to be nice. "Every time McEnroe throws a racket," Strasser used to say, "we sell more shoes."

For every baby boomer who believes he or she has grown up with the straight-shooting Nolan Ryan or one of the serious track stars projected by Nike, and thus is offended by the behavior of Barkley or Agassi, there is a younger Nike consumer who is inspired by displays of attitude. But when Nike realized that the anti-country-club, rock 'n' roll tennis imagery projected by Agassi was turning off older players, it created the toned-down Supreme Court line, grabbed Courier with an estimated $3 million-plus signing bonus and designed a solid but warm campaign that would play up Courier's newfound maturity while projecting the energy and spirit he is often thought to lack.

Late this spring the consensus in Beaverton was that this year's NBA draft class would be thin on future superstars of Nike aptitude or attitude. Bobby Hurley, the feisty guard from Duke, certainly interested the company, as did Kentucky forward Jamal Mashburn and Michigan forward Chris Webber. But the Nike basketball stable was already full of talent, and with only a few exceptions the players were high-profile veterans. Perhaps the only missing piece was a heavily hyped rookie known as Shaq, who wasn't a Nike guy anyway.

Only six or seven college basketball players are invited to formally tour the World Campus each year and witness a Nike presentation, and only Shaquille O'Neal, who was a star at LSU when he look his tour last year, ever showed up in Reebok gear and yawned during the sports marketing team's elaborate spiel. O'Neal had told various agents and marketing types long before leaving college that he had his own ideas about his image and endorsement future. He had no intention of competing with Jordan, Barkley and the others already at Nike for money and air-time. So he signed a $15 million, five-year deal with the R company and went on to sell the Shaq umbrella marketing concept to other corporations for millions more.

Everyone at Nike seems to hope O'Neal fails miserably. Shaq—as any Nike secretary or sales rep from Beaverton to Pusan can tell you—is no Nike guy. "He's not a Nike guy because they don't have him," says Sonny Vaccaro. "What's a Nike guy? They got Nike guys in prison, too, you know. This stuff is——."

Although Nike executives consider the 1993 NBA draft crop uninspiring, their competitors do need new stars. So the marketing team gathered in the McEnroe building before the draft knew that Fila, Puma, Pony and some of the smaller companies were probably out to bag a signature star. One passing consideration was for Nike simply to corner the draft by signing up all the top players. But what would the public think of such a power play? No recent Nike tactic has raised more eyebrows among the sports business cognoscenti than the creation of its nascent sports management program, which reflects an effort to exert control over the images Nike casts into the marketplace. Nobody in Beaverton was pleased to observe the dilution of Jordan's Nike-clad image by the addition to his portfolio of Gatorade, McDonald's, Wheaties, Chevy, Hanes and other products.

But for Knight the decision to take action came when he first saw Agassi hawking Canon cameras on TV. When Agassi looked into the camera and said, "Image is everything," Knight flipped. "It was 180 degrees from our imagery," says Knight. "We work hard to convey that performance, not image, is everything."

The sports management program was born shortly thereafter. "This whole sports marketing thing's just gotten bigger and bigger," says Knight, "and the sports agent business is changing. Sports agents came out of an era when a guy making $100,000 was a well-paid athlete, and the agent was a fringe lawyer or a guy with a huge passion for a sport. On a $100,000 NBA contract the agent got $4,000. Now you get $120,000 agent fees for a single contract and another million for an endorsement—of which the agent gets up to 20 percent. The incentive to fragment an image is huge, and when you split it up too often, nobody wins."

Nike's first sports management client was Bo. As with Jerry Rice, Pippen, Sanders, Ken Griffey Jr. and Tim Hardaway, Jackson is a "marketing only" client. Nike pays him a yearly guarantee for the right to okay all his endorsements and nonteam marketing-related activities. Nike negotiated contracts with Pepsi for Bo and with Coke and Montgomery Ward for Pippen, for whom the company even did a "Scottie" candy-bar deal. Jordan was approached to join the new management program. "I told them that while I understood their feelings about control, they'd have to compensate me for what I could lose," says Jordan. "That ended the discussion."

The controversial "career management program" now includes only three athletes: rookie quarterback Rick Mirer of the Seattle Seahawks; the Miami Heat's high-bounding young guard, Harold Miner; and Mourning, whose NBA debut this season was overshadowed only by the presence of Shaq. "Five years from now maybe I will say we should have gotten Shaq," Knight says. "You rolls the dice and you takes your chances. After all, I am the guy who said a college player named Magic Johnson's professional future was in doubt because he was a player without a position. Remember that we didn't have Magic, and we didn't have Bird, and we still did pretty well."

For Mourning—who was drafted No. 2, after Shaq—the decision to allow Nike to select an agent to handle his contract with the Hornets, direct his financial affairs, forge his public image, manage his charitable activities and negotiate and control all his ancillary marketing agreements was something like the son of a military man joining the Army. At 23, Mourning is a Nike man young enough to have grown up as a Nike kid. He attended Nike summer camps and played in Nike high school tournaments.

As a high school sophomore Mourning was befriended by Vaccaro, whom Mourning considers to be one of the most important figures in his life. Not only did Mourning attend a Nike college, but to this day he is mentored by Thompson, the Georgetown coach and Nike board member. Vaccaro and Nike were widely criticized when Mourning decided to enroll at Georgetown, because it was assumed that Nike's close relationship with the Hoyas and Thompson had informed the decision.

In 1978 Knight had hired Vaccaro to establish a grass-roots basketball presence for the company. Nike quickly struck deals with a network of high-profile coaches. Some of them, like Thompson and Jerry Tarkanian, who was at UNLV at the time, were soon being paid six-figure yearly sums.

In 1991 USA Today noted that Vaccaro was being called "the most powerful man in college basketball"—and it was around that time, says Vaccaro, that "Nike got rid of me. I never dreamt in my wildest dreams that I wouldn't be with Nike all my life. But as I told Phil recently, I was like the gunslinger brought into Dodge City to clean up the bad people. In this case the bad people are the other shoe companies. Once I got rid of them, the good people realized they didn't need a gunslinger anymore."

However, with the advent of the sports management program, Nike gunfighters were back on the street. Mourning was shocked by negative reaction to his business arrangements during his holdout with the Hornets. "People actually got mad at me because of who I worked for," says Mourning.

"Control is sensible, but overall management isn't smart for Nike," says Mark McCormack, whose packaging of Arnold Palmer as founder of the International Management Group is considered the first endorsement coup of the modern sports-business era. "Phil's killing an ant with a machine gun here. I endorse his desire to be more involved in marketing Nike superstars and in controlling what they're doing, but taking it to the extent he has will be complicated down the line. Agents and managers are going to be less inclined to sign athletes with Nike just to keep them away from the web."

Mourning talks regularly to White, Nike's pro basketball guy, and he's in daily contact with a Nike sports marketing executive. When Mourning recently said that he was thinking of buying some new television sets for his house in Charlotte, Nike arranged to have them brought in. "All I have to do is work hard on the court, and Nike will take care of the rest," Mourning says.

With only a few weeks left before the end of the regular NBA season, Mourning was nervously awaiting news about his first Nike commercial, which was tentatively scheduled to run during the playoffs. Charlotte teammate Larry Johnson was already on TV all the time, slam-dunking as a grandma in a dress for Converse. Mourning was indeed working hard on the court, and members of the Nike rank and file were tracking his rebounds and points and comparing them with Shaq's.

Still, there was the not insignificant matter of the commercial. "Clearly Alonzo's dream is yet to be realized," says David Falk. "But he's with the company that can do it—Nike really can make him a household name. The fact is, though, Michael is one of the reasons Alonzo might have to wait."

So Mourning waited anxiously for his script to arrive, for his chance to take the court in prime time during the playoffs, and for those magical 30 seconds when the Nike hero machine would take him up and away.

V. The Store

In Newark, 3,000 miles—and a world away—from Beaverton, the broad thoroughfare called Market Street crosses Halsey and is suddenly abloom with startling colors and noise and urgent circles of shoppers. Along the sidewalk across from the empty shell of an old Macy's, the huge crowd mills on Sneaker Row, staring at the overstuffed picture windows of Bros. Sneakers, the Sneaker Room, the Sneaker Joint, Dr. Jay's Sneakers and a veritable metropolitan museum of athletic shoes, the Essex House of Fashion. On Market, news of the back-room unpacking of a new model from one of the big shoe companies can cause a stampede. Most of the regulars on Sneaker Row are young, and in a city in which truancy rates reach 49%, the athletic-shoe stores arc often full of kids in the early afternoon.

A beleaguered-looking 38-year-old named Steven Roth has, for 18 years, served the citizens of Newark from the 10,000 square feet inside the Essex House of Fashion. Roth rings up sale after sale from behind a long counter set in the middle of a quarter acre of shoes and athletic apparel. Beside Roth, working the next register, stands a much larger man wearing gold chains and a bright green sweatshirt that is heavily "strapped," as they say on urban streets, his black nine-millimeter pistol lodged in a shoulder holster attached to his broad chest.

Roth converses easily with his young customers in a patois of street argot and shoe slang. Some 1,000 connoisseurs of athletic shoes come into the store every day, but he still seems to know most of the kids, if not by name, then at least according to aesthetic preference. "Very nice," Roth says, holding up a pair of top-of-the-line basketball shoes. Rockean Sanders, the 16-year-old who plans to buy the black shoes, leans over toward Roth to admire their lines and contours. Rockean has spent more than an hour analyzing "the wall" before choosing his new shoes, and the wall is monopolized by Nikes.

The racks near the front of the store display dozens of examples of Nike apparel, and a large display case offers posters of Barkley, Bo, Deion and the other gigantic Nike images that make so many shoe stores look like miniature halls of fame. Nike's visual and economic dominance of the Essex House of Fashion is largely a testament to the company's marketing prowess but also to the fact that Roth is yet another Nike guy. In many ways his loyalty is as important to the company as is that of all but a few of the athletes on the payroll.

"I get insomnia at night, so I get up and call Nike, just to talk about a shoe I need or to ask a question," Roth says, ringing up yet another sale. "Somebody who knows what's what is on call for me 24 hours a day. Nike sales reps have these computers that can show me a whole line of shoes on the screen. A rep can spin a computer image of the shoes around, change them into all the colors they'll come in. He can even show me the commercials that will support the shoes on TV. I can call Nike up on a Wednesday and tell them I need fill-ins of a hot model, and by the weekend they'll come in. No other company can do that. Nike's been good to me, so I push their shoes. It's as simple as that."

Though many of Nike's 12,000 retail accounts fear the spread of the opulent Nike Towns that the company says are meant to be brand-promoting, 3-D commercials—if Nike makes $12 on a $100 shoe sold to stores for $50, then it's not lost on retailers that in a wholly owned Nike Town the company makes $62 on the same shoe—a Spoiling Goods Dealer survey of 500 retailers shows that Nike remains their favorite brand. But none of the high-tech, high-speed corporate support would mean a thing unless kids spent more time in front of Nike's section of the collective wall than any other. Americans under the age of 25 account for more than half of Nike's sales and for more than 75% of the basketball-shoe market. Research indicates that six of 10 sales are made because of something that happens between the eye, the will and a shoe—right there at the wall.

"I go to Chicago, New York, Paris, Tokyo and Minneapolis," says Nike's chief protector of corporate look and visual images, Gordon Thompson. "I go to gyms and playgrounds and see how the kids customize the strapping with our Velcro fasteners. We made a lot of the shoelaces longer because of lacing styles favored by the kids. All the kids leave the tags on certain shoes, like the Air Raid, so we've made the tags look nicer."

When dozens of newspaper articles set the stage for a 1990 report in SI about urban youths killing one another to get at Air Jordans and other coveted shoes, public outrage focused on a shoe industry that had spawned such a surfeit of unrequited desire that people were willing to commit murder over something as meaningless as a pair of sneakers. An acquisitive culture that had bypassed the larger moral implications of stealing and killing over objects as apparently essential as cars was evidently enraged because of the absurdity of the motives involved.

These reports of violence, as well as the abortive Operation PUSH boycott, have left Nike defensive about accusations that it targets poor, urban black kids for marketing initiatives. "We don't target a market to a demographic," says p.r. director Dolan. "But we do sell to psychographic segments—such as people who love only basketball. We sell to passions and states of mind, not by age, address or ethnicity."

Recent target-marketing campaigns launched by some of Nike's competitors (notably British Knights' campaign for its Predator basketball shoe: "Wear the Predator, or be the prey") are far more aggressive than anything Nike has done. But as long as the possibility of standing in Barkley's or Jordan's shoes captivates the imagination of Americans for whom $130 is a significant sum, questions of social responsibility will be part of Nike's weekly agenda. "I don't get it," says Mourning. "I grew up seeing kids steal all sorts of things. Is Nike supposed to make unimpressive shoes because some people can't afford the best products?"

That the shoes are magical items to one segment of the economy in the way Apple PowerBooks are to another may offer an insight into the social and economic order of the moment. But those closest to the urban scene rarely contend that the problem is the shoes. "What people who live in other places don't understand is that there's a part of America where a Big Mac is a celebration," says Roth as he sends one kid after another away from his counter wearing a giddy grin.

All afternoon kids have streamed through his store, surrounding certain new shoes and commenting on them with curatorial care and insight. "Most of the people in this store, their lives are s——, their homes in the projects are s——, and it's not like they don't know it," says Roth. "There's no drop-in center around here anymore, and no place to go that they can think of as their own. So they come to my store. They buy these shoes just like other kinds of Americans buy fancy cars and new suits. It's all about trying to find some status in the world."

VI. The Dream

Brian Clare, a 25-year-old Nike EKIN—EKIN, as senior executives often seem embarrassed to point out, is Nike spelled backward—says the honor of being invited to the Final Four in New Orleans was right up there beside the day he met Jordan. Clare was one of only four EKINs rewarded this year for their loyalty to the cause with a ticket to the Final Four. Clare sold insurance after college, and he worked in an athletic-shoe store for a while. But then he landed what he calls his "glamorous and completely cool" job, driving hundreds of miles each week from store to store, talking all day about Nikes.

In New Orleans, Clare met Dean Smith, the legendary coach of North Carolina; he saw Jordan's face projected onto a huge building near the Superdome; and he noted the requisite airport and highway billboards that propelled Nike into every vista. Clare says he felt as if he were part of "some amazing force."

From another vantage point the Nike profile at this year's Final Four was comparatively subdued. Converse, a relative fossil among competitors from the Nike perspective, had taken a full-page ad in USA Today, boasting that three of the four teams would be clad in Cons. Only Michigan would be sporting Nikes. "That was our game," Vaccaro said of his own Nike years. "We had all four teams one year, and we laughed at the world."

Vaccaro held forth in New Orleans alongside Strasser from an Adidas suite one floor above the Nike suite in the same hotel. The Vaccaro and Strasser reunion at Adidas was the talk of New Orleans—at least among shoe guys and sports marketing insiders—until word went around that Knight and Nike had also made a move. Mike Krzyzewski, the respected coach of Duke and a longtime Adidas endorser, had struck a deal with Nike. The piece of the rumor that lit up the Final Four cocktail circuit was that Krzyzewski would get a million-dollar signing bonus, a $375,000-to $400,000-per-annum multiyear contract and lots of Nike stock options. The deal would rank among the most lucrative ever struck between a shoe company and a coach, and the general reading of the story was that Knight had decided to send a message to Strasser as he and Vaccaro set out to revive Adidas. "Hell," said Vaccaro, "I'm not going to have a million dollars to spend on promotional deals all year. Adidas is like a pimple on Nike's rear end. Only Reebok can go head-to-head with Nike."

Sports marketing director Steve Miller admitted that the timing of the Krzyzewski announcement reflected a Nike proclivity for public orchestration, but he endeavored to point out that what was being called the "the Krzyzewski deal" was really a deal between Nike and Duke. The new trend for us, Miller explained, is to hook up "near exclusive sponsorship deals with whole universities"—as Nike is in the midst of doing with Southern Cal. As contracts with competing manufacturers run out, USC's foot-ball. basketball, tennis, volleyball and track teams will all be clad in Nike gear. "This is our new thrust," said Miller. "The money goes to the universities, and they can distribute it to coaches themselves. If the institution keeps some money for itself, we think that's the way it should be."

The Nike juggernaut raced through the first half of the year, striking deals, trying to make everything go faster. Record annual earnings were announced in July, with domestic sales up 10%—about what was expected, and essential because the overseas theaters were bogging down due to poor currency exchange rates and the European recession. If the goal of $6 billion in sales by 1996 is to be reached, then international sales must increase steadily. Meanwhile, women in America will be the focus of a heavy national advertising campaign. The outdoor fitness market—hiking and trail-running shoes and the like—is another growth area in which Nike sales have doubled over the past year (to $123 million), and they are expected to surge.

In February, Nike heralded its recent purchase of the cash-strapped Ben Hogan golf tour, one of the less prominent PGA circuits but one that has nurtured many top players. Golf-related sales account for only $32 million of Nike's $4 billion income, and its golf business has been relatively weak, but Knight believes the sport is "well run" and worthy of Nike association. During a mass conference with golf writers gathered to ask about the Hogan venture (now known as the Nike Tour), Knight bristled at the implication that Nike was after the upmarket types who play the sport. "That's like asking if we go directly at inner-city kids with our basketball line," he said. "We just do it to be in the sport. That's what we do."

In mid-April, in the wake of an agreement to outfit the entire Kenyan track team, a Kenyan runner sporting the new Nike colors (but still wearing his old Asics shoes) won the Boston Marathon. But the end of the month brought new indications of the tenuousness—the "fragility," as Knight always puts it—of an enterprise based on the fortunes and even the moods of athletes. First Bo Jackson stunned executives by refusing to participate in a new ad campaign designed around his hip. Then Sanders, distraught over scant playing time with the Braves, a dragged-out salary negotiation with the team, and the death of his father, suddenly decided to slop playing baseball. Trouble was, more than half a million pairs of the nifty gold-mesh cross-trainers—each shoe bearing Sanders's number with the Braves and the Falcons—were due to arrive in the stores in mid-June. "This," Knight observed, "is turning into an interesting May."

In early June, after Deion had returned to the Braves, the matchup in the NBA Finals more than compensated for the company's failure to monopolize the Final Four. Four starters for the Chicago Bulls and four for the Phoenix Suns were Nike endorsers. Jordan, Barkley and even Dan Majerle commercials were on the air before the Finals began, including a Barkley "role model" ad in which Charles says, "Just because I can dunk a basketball doesn't mean I should raise your kids."

That stark message was joined by a more self-involved-sounding soliloquy from Jordan: "What if my name wasn't in lights?" Michael said in the ad as he stood alone in a gym, shooting one free throw after another. "Can you imagine it?...I can."

Jordan doesn't like to do commercials right before the playoffs, but when he saw the copy, he thought the message conformed with his growing ambivalence toward celebrity. Jordan says that what he really wanted to say in the spot was, "Aside from all the commercialism, the game's still fun." The ad also conveyed a get-off-my-back attitude, and the ingratitude some perceived in the spot was complicated by Jordan's furious reaction to reports that he had lost huge sums gambling on golf.

Just before one postseason game Jordan laced up a pair of the 1994 Air Jordan prototypes during a morning practice, and from a lone, murky photograph of the new shoes in one local newspaper, 300 people called the Chicago Nike Town to ask when the shoes would be in stock. However, in stores like the Essex House of Fashion, Air Jordan was taking a hit. "It's not just the gambling stuff," said Roth. "The kids talk about Michael's problems, but for two months it's been all Barkley. The Air Force Max is hot, and from this level it looks like Air Jordan is finished."

Mourning had finished the regular season ranked 15th in the NBA in scoring, 14th in rebounds and fourth in blocked shots, and he had waited patiently to star in his own Nike commercial. But when the company executives saw the creative package offered by Wieden & Kennedy, the Portland agency that has done most of Nike's advertising, they told the copywriters to try again. So Mourning entered the playoffs without a signature commercial. Despite his brilliant efforts, in particular against the New York Knicks in prime time during the second round, he would have to wait to be elevated to a household name.

In late July, Steve Miller and the other Nike sports marketers were still jockeying to sign Chris Webber and Anfernee Hardaway to shoe contracts. Jamal Mashburn had taken a $6 million dollar contract plus a red Ferrari to go with the Italian shoe company Fila. Bobby Hurley had signed up with the Foot Locker retail chain, which had promised him a signature shoe as part of its new ITZ (In the Zone) line.

The University of Miami joined the Nike "total university relationship" camp, and as part of a deal that would mean several hundred thousand dollars to the school—during the same week the Air Carnivore arrived at the Essex House of Fashion—the University of North Carolina joined the new-look Nike fold. Longtime Converse coach Dean Smith reported that he had put the matter to a vote among his senior players.

Meanwhile, projections of single-digit growth in 1994, instead of the double-digit increases Wall Street has come to expect, sent the value of Nike shares down to $56 from a high of $90 only a few quarters earlier. Knight said Nike's response would be to continue its "relentless strategy" to invest abroad and "strengthen the brand."

"We'll keep pushing wherever we can," says Knight, "because an essential part of this culture says that we're a growth company. The idea of Nike as some sort of stable, slow-growing, high-dividend-paying company doesn't compute around here."

Senior executives talk of Nike's becoming "an experience company" and an entertainment corporation of the future. They talk of a Nike theme park loaded with digitized virtual reality booths in which participants can virtually experience the best golf holes in the world or go one-on-one with Jordan or those who come after him. An alliance with director George Lucas's Lucasfilm is in the works to develop futuristic sports entertainments. "Retailing and entertainment are moving together," Knight says. "If you look at Nike Town, at the talent we have and at the sports agency business, you can sec new directions."

Knight says he also wouldn't rule out buying a team or other sports-related companies, if promoting, protecting and controlling the brand and Nike's carefully wrought image is the result. During the first week in August, Phoenix Sun owner Jerry Colangelo announced that he was trying to draft Knight as a co-owner of a franchise that would bring major league baseball to Phoenix. Meetings have also been held to discuss a Nike-backed pro basketball league in Asia, and the company has even floated the idea of sponsoring a college football national championship playoff. "But I do want to stop fighting so much with governing bodies and leagues," Knight says. "It's easier to fight when you're the little guy. Even though we still think the old way, being Number One means that you simply can't fight all the time. We have to start waiting for the really big fights."

In the spirit of the company's more raucous days, Michael Doherty, the in-house filmmaker, began to clown around one morning while hosting a broadcast on the World Campus radio station in Beaverton. "And next," Doherty said, "maybe we can get Phil Knight to come down here and tell us just what he does with all his money." Knight's vast wealth (despite the companywide knowledge of his penchant for sponging dollars and quarters off people at lunchtime) has turned him into a corporate totem in sunglasses, still crazy after all these years at the helm.

At the time Doherty was joking about Knight, the chairman was sitting up in his posh corner office, where he prefers visitors to remove their shoes. Knight's suite in the McEnroe building has rice-paper-style walls and cases full of Oriental objects that his contacts in the Far East have given him over the years. Displays of sporting images observable on every other wall in Nikeworld stop at the entrance to Knight's office, where blond wood, black-lacquer trim and elegant sconces take over. In a conference room next to his office, the sole indication of commercialism is a tiny piece of rock shaped like a swoosh.

Knight says he rarely thinks about the power implicit in his control of the Nike machine. But sometimes it's unavoidable. "I went to the Australian Open last year," he says, "and I decided to walk to the grounds. I turned a corner, and there, stretched across one of the biggest buildings in Melbourne, across the whole skyline it seemed, was a huge JUST DO IT banner. I thought, God, coming from Portland to Melbourne and seeing that. It was an enormous thrill."

During a June sales meeting in Beaverton, Knight appeared in a skit doing an imitation of Marlon Brando in The Godfather. "The most powerful man in sport" sat in his study like Brando in the famous wedding scene, supplicants approaching one after another to kiss his ring and ask for favors. Agassi, McEnroe and Courier appeared on film from the French Open, bowing to the Godfather's demand that they play Davis Cup. Krzyzewski appeared, and Penn State football coach Joe Paterno pranced onto the stage to complain to the Godfather that he'd been a Nike coach from the beginning. Later, during part of a skit spoofing the Village People's song YMCA (N-I-K-E), Knight appeared on stage again—in leather and chains.

In other companies such jests might serve to demythologize the leader for the good of morale, but at Nike a certain ritual irreverence is promoted as an inoculation against an encroaching bureaucratic style that would make Nike too much like the soulless monoliths beyond the berm. The reversions to a bygone corporate style seem designed to obscure the fact that Nike is entering middle age. The vast majority of U.S. companies are younger than Nike, and these contrived rituals of the corporate tribe cover up the laugh lines, like a pair of high-tech wraparound shades.

Knight misses the halcyon days. "Those entrepreneurial days were more fun," he says. "It's still fun, but only a few old-timers are left who are friends of mine."

One senior executive tells of a recent day when dozens of employees sat at the tables on a patio overlooking Nike's seven-acre man-made lake. Knight came up with his lunch tray, and though the executive said he had finished eating, Knight said, "Just stay awhile. I don't know anybody here."

A few weeks later Knight was strolling along the Walk of Fame beside Howard White. "So, Howard," Knight said, "what's a building that says John McEnroe on it going to mean to people in 10 years, when Mac's been retired for a decade? What will the Michael Jordan Building mean in 10 years, when Michael's been retired for—what?—a year or two?"

White's eyes bulged at the implication that Jordan would still be in the NBA for another eight years or so.

"Well, here's what I think," Knight continued without waiting for an answer. "I think that in 10 years it will mean a lot that today Michael Jordan is the greatest basketball player in the world. And I think John McEnroe has put an imprint on tennis that nobody will ever take away. You might not like it, but it's there. I believe that some things people do never really fade away."

And all around Knight, striding along quickly with gym bags and PowerBooks, the young turks of Nikeworld went back to work, to race toward a finish line that simply—as the Nike axiom so famously has it—isn't there.

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RICHARK MACKSON

Before Jordan resolved the Barcelona flap with a flag, many observers blamed Knight (opposite).

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JEFF JOHNSON

Knight's love of track sparked the evolution from Nike's first shoe to the Carnivore.

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[See caption above]

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The buildings on the 74-acre World Campus are named after Nike heroes.

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Nike likes freethinkers like Hartge (top) and boys-shoes designer David Hoeft.

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White oversees the NBA stars for whom Pam Greene helps design fitting shoes.

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Cycling to work and lunchtime hoops at "the Bo" are part of the corporate culture.

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Innovative ads have spread Nike's name from Portland to Paris—and beyond.

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SIMON BRUTY/ALLSPORT

[See caption above.]

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NIKE INC.

Foreign plants, like the one in Indonesia, draw criticism, but not at the Essex House.

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[See caption above.]

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JOHN W. MCDONOUGH

A veritable museum of athletic icons, Nike Town is Chicago's top tourist spot.

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Salazar is one of many former Olympians who enjoy life "inside the berm."

NINE ILLUSTRATIONS