THE 4TH QUARTER X YAHOO PARTNERSHIP!
Fresh off the press, we’re incredibly honored and excited to announce that The 4th Quarter has partnered with Yahoo to launch Yahoo’s Sports Business Hub.
Through the Yahoo Sports & Yahoo Finance websites, users will be able to access our next-gen sports business content - that you receive here. The hub is powered in partnership with leading publishers in the space, including Front Office Sports, and Sports Business Journal, as well as Awful Announcing, Barrett Media, JohnWallStreet, Sports Business Radio, and The 4th Quarter.
All coverage in the hub is where we’ll be able to share our in-depth sports business analysis for the more than 100M fans and investors in the U.S.
We are by far the youngest media company amongst this all-star line-up of players in the industry.
If it weren’t for you tuning in week in and week out, this wouldn’t be possible. From the bottom of our hearts, we’re grateful.
Let’s go build the Future of Sports Business.
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FEATURED STORY
Nike's Stock Price Is Collapsing…And How To Save It
We used Endex to analyze why Nike’s stock has been suffering.
Before getting into this week’s deep dive, we first would like to shout out our financial AI partner Endex. It’s a product that we use every day to power all of our research and modeling.
Today, we’re putting Endex to work to break down the real reason why Nike’s stock has been in a downward spiral.
We used Endex throughout this entire piece – and built a full financial analysis in minutes.
Endex is an AI financial modeling tool built directly inside Excel, backed by OpenAI. It allows you to generate clean financial models, charts, and analyses simply by prompting it, without ever having to leave your spreadsheet.
If you want the easiest day-one upgrade without adopting a whole new tech stack, start by adding Endex to your workflows.
For the investor, operator, team executive – or those who spend more than 5 minutes in spreadsheets a week, this was made for you & your team.
But instead of just telling you what it does, we figured we’d show you.
Last Thursday morning with Blank Street coffees in our hands, we encountered what seemed like an investment banking VP’s worst nightmare on our walk through Soho’s Mulberry Street.
A closer look at the iconic Swoosh logo and we immediately realized it was a bit safer – and a lot more special – than that.
To hype up the release of its Nigel Sylvester x Air Jordan 4 collab “BRICK AFTER BRICK”, Nike decided to literally drop a 500lb Nike-branded brick on a brand new BMW, an art installation dubbed “The Weight of Progress”.
“BRICK AFTER BRICK” art installation in Soho’s Mulberry Street.
Here’s what it was supposed to mean: “the path isn’t always easy – it demands consistency and discipline, but when you push through, the payoff is real.”
An unintentionally honest message, given the year Nike’s actually having.
Just looking at the hits they took recently:
Share price is down ~30.4% year-to-date and ~66.8% over the last five years, erasing nearly $200B in market cap from its 2021 peak
Cut more than 1,400 tech jobs in their global operations division as they enter the “final stretch” of CEO Elliott Hill’s turnaround plan
Adidas-backed marathoners Sebastian Sawe and Yomif Kejelcha broke sub 2-hours at the London Marathon, even though it was Nike that originally chased sub-2 hours with their bold Breaking2 initiative back in 2017
Don’t get us wrong: consistency and discipline are necessary traits for what many would consider a faltering brand to make a resurgence.
But pushing through is not enough. For a $50B business whose core mission has relatively remained unchanged for the last twenty years, it might be time for management to take a big swing to achieve a comeback.
Unorthodox partnerships. Pivoting from apparel. New product expansion through M&A.
Something fittingly – akin dropping a 500lb brick on a luxury car in one of the busiest streets in New York.
Nike’s Operations Has Been An Issue, But That Was Never the Root Cause
We had Endex summarize the three biggest issues Nike is facing based on the latest earnings call Q&As, management presentations, and financial reporting. To be fair to Wall Street, the operational case against Nike is real – with two of the three key reasons attributed to former CEO John Donahoe’s strategic missteps:
DTC-to-Wholesale: Donahoe shifted their go-to-market strategy from wholesale to direct-to-consumer. Not only did Nike voluntarily give up shelf space from rising competitors (e.g., On Cloud, Hoka), but they also failed to make Nike Digital a premier shopping destination – digital is still down 26% YoY in Q4 2025.
Losing in China: Nike's China business went from a $7-8B powerhouse in FY24 to a ~$5.8B drag – declining revenues, compressing margins, and Anta eating share at every price tier. Underinvesting in monobrand doors while heavily discounting product on Tmall/JD led to what Hill himself called "becom[ing] a lifestyle brand competing on price in China" – while Anta has been quietly building a multi-brand portfolio (Anta, Fila, Descente) that now competes with Nike at every consumer segment.
Tariffs: This time not at the fault of Donahoe – Trump's tariffs added a $1.5B annualized headwind, forcing Nike into 14-18% price increases across footwear, apparel, and equipment to protect margins
And although it’s not specifically mentioned as one of the five key pillars of his “Win Now” turnaround strategy, Hill has stressed “Global Operations” as a critical focus: aggressive price increases to counter tariffs, inventory redistribution away from legacy products (e.g, Air Force 1’s), a new COO, mass tech and distribution center layoffs to build a leaner, faster org, and restructuring into sport-specific divisions (vs. gender-based) to drive category innovation.
But is that enough? Because the heart of the problem might not be operational.
Here’s what else we think should be considered:
Maybe Nike just isn’t that cool anymore
Maybe the greater opportunity in apparel isn’t as big as previously thought
Brand. Total Addressable Market (TAM).
Let us explain.
Why Nike’s Brand Doesn’t Command a Premium
Nike’s brand decline can be explained in three reasons: a few numbers, a quick anecdote, and settling an X debate.
A few numbers.
Projected growth rate. Margin decline.
We asked Endex to build a set of comparables benchmarking Nike’s projected sales growth and historical gross margins. The numbers are quite telling:
Built In Seconds by Just Prompting Endex
Out of all their competitors who are also dealing with similar cost pressures from tariffs, Nike and Puma are the only two public footwear / sports apparel brands suffering from declining growth and compressing margins.
In other words: the modern day consumer isn’t as interested in buying Nike as they once were – and the brand has lost its ability to command a price premium that it once held.
On, Hoka, ANTA, and other fast-growing footwear and apparel companies – their brands are getting stronger as Nike wanes. Nike's current 42.2% gross margin sits 1,430 bps below the peer median (ex-Nike) of 56.5%. Three years ago, that gap was ~670 bps (46.1% vs. ~52.8%).
The gap has more than doubled.
Until Nike can demonstrate at least two consecutive quarters of gross margin expansion at the consolidated level, their brand premium may have taken a permanent hit.
An anecdote.
On a packed F-train ride from Chelsea to the Lower East Side, we looked down to see what shoes everyday people were wearing.
It’s a fun exercise to keep ourselves up-to-date with the latest fashion trends.
A couple of ASICS. Decent amount of casual New Balances. HOKA. Veja. A few Adidas.
One pair of Nike Airmaxes.
Genuinely, it always surprises us to see just how many brands of lifestyle / performance footwear are represented.
It feels so much more different from running this exercise a decade ago: a lot of Nike Dunks and Air Force Ones, increasingly more New Balance – and never saw an ASIC (now Suraj’s ASIC SKYHAND OG are his favorite pair of sneakers).
While clearly not a controlled experiment, the anecdote shows that Nike has naturally ceded ground to many shoe competitors in lifestyle wear – a space that the shoe giant previously dominated. And it’s not even really their fault. The shoe monoculture died as the stylish taste expanded. StockX apparel brands grew from 117 in 2020 to 249 today; in 2024, Saucony cracked the top fastest-growing brands on the marketplace. There’s too many viable fashion options, preventing Nike from maintaining its premier position that it held for decades.
We would have to battle test the defense of our shoe games if we wore Saucony’s shoes in middle school!
(Now Sid owns a pair…)
An X debate.
There was a big debate sparked on X after ESPN analyst Brian Windhorst agreed with a UBS equity research report saying “Nike shoe sales are tanking because NBA players aren’t as popular as they used to be.”
Nike has always owned shoe culture in basketball, with major athletes like Jordan, Kobe, and Lebron as distribution. But because the new era of basketball players aren’t as popular, Nike’s basketball shoe sales have sequentially suffered.
Mike Sykes, writer for the Business of Fashion, made a really good point on this debate: “Nike doesn’t have an athlete comparable to Michael Jordan to carry the category these days, but those athletes don’t exist anymore. Consumers are too fragmented.” Just as the shoe monoculture died, the athlete monoculture has died with the proliferation of new sports and athletes having the ability to build audiences like they’ve never had before.
On the other hand, basketball YouTuber Kris London tweeted this response: “No… players are more popular than ever, Nike just aint adopting fast enough and are also cheap while still selling kicks high. You wonder why new athletes with motion are starting to sign elsewhere.”
We think it’s a combination of product specialization and creative ownership as to why certain athletes aren’t signing / leaving:
Kyrie became chief creative officer of ANTA basketball – Kyrie’s were one of Nike’s best-selling basketball shoes
Jaylen Brown reportedly turned down a $50M Nike deal to start his own shoe brand 741 Performance
Anthony Edwards deciding to sign with Adidas instead
It’s a different era now. Basketball players already make so much money on the court, they would rather give up lucrative shoe deals to pursue creative ownership.
Apparel Is Just Not Enough Anymore
One thing that we do want to get straight: in a vacuum, Nike is still a footwear / sports apparel juggernaut. They’re a $46B yearly revenue business – Adidas is $28B, ANTA only ~$12B.
They’re still the biggest, but unfortunately, there’s not much room left to grow. We asked Endex to compare the sportswear market with the new health & wellness economy:
Built by Endex
Nike already owns 12% of a ~$400B global sportswear market – even recapturing 2% of share only equates to +$8B in value (consensus sees only +$2-3B in the next 3 years).
That’s a drop in the bucket.
But if they could position themselves as an overall health & wellness brand – not just apparel, they could tell a completely different growth story to the Street.
Still very new, fragmented, and something Nike could vertically integrate into…
Drop a Brick, Make a Big Swing
Hill is asking the right operational questions. But when is Nike going to ask the transformational ones?
Wholesale rebound, China cleanup, sport-specific divisions, leaner tech org — all of it is necessary. But a new COO isn't going to fix the premium problem. Another round of layoffs isn't going to expand the TAM. And Nike certainly isn't going to out-grassroots Bandit, On, or Hoka by replacing Adidas as the next Champions League sponsor.
So what would a real big swing look like?
What happens if Nike spends the next $10B on a Whoop instead of stock buybacks — buying its way into the longevity economy rather than waiting for the longevity economy to come to apparel?
What if the next major partnership isn't with an athlete, but with a cult-like, community platform that already owns the cultural distribution that Nike can't manufacture? A Strava, maybe? Or something more niche, like SweatPals?
What if "Win Now" isn't the comeback – but the cleanup before someone else gets to design it?
The brick on Mulberry Street felt like a genuine statement. A powerful stunt.
Now we're just waiting for the 1,000lb brick to drop.
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LATEST NEWS
Our featured story ran a bit long this week, but we’re still determined to share all of the latest sports & entertainment business that was curated for this week!
League & Team, Startups & Venture Capital, M&A, Strategic Ventures – this week was huge.
Thrive invested in the SF Giants, PIF pulled funding from LIV Golf, NFL built an in-house content studio with Skydance Sports, L Catterton x Patricof Co. launched a $500M athlete-led fund…
Click out if you want to see the recap!
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JOB BOARD
If you find our weekly job board helpful, join the T4Q Talent Network.
Now - here are some cool roles we found and personally curated this week. Enjoy!