SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 3, 2000
NIKE, INC.
(Exact name of registrant as specified in its charter)
Oregon 1-10635 93-0584541
(State of incorporation) (Commission File (IRS Employer
Number) Identification No.)
One Bowerman Drive, Beaverton, Oregon 97005-6453
(Address of principal executive offices) (Zip Code)
(503) 671-6453
(Registrant's telephone number, including area code)
Item 5. OTHER EVENTS
Today Manchester United PLC made the following notification to the London
Stock Exchange:
Date: 3 November 2000 5.00 p.m. Release
Enquiries:
Peter Kenyon, Chief Executive 0161 868 8106
David Gill, Deputy Chief Executive 0161 868 8333
Manchester United PLC
John Bick/David Bick
Holborn 020 7929 5599
MANCHESTER UNITED PLC
MANCHESTER UNITED ANNOUNCES A
STRATEGIC ALLIANCE WITH NIKE EFFECTIVE AUGUST 2002
Grant of Exclusive Sponsorship, Licensing, and Merchandising Rights
Manchester United Plc ("Manchester United"), one of the world's leading
football clubs, has granted to athletic footwear and apparel leader NIKE,
exclusive worldwide rights as (1) the official sponsor of Manchester United
footwear, apparel and equipment, (2) the official kit (uniform) supplier to
Manchester United, (3) the manufacturer, marketer and seller of licensed
apparel, footwear, equipment, and other merchandise bearing the Manchester
United trademarks, including replica kit, and (4) the operator of Manchester
United's global retail operations.
Term
The agreement, between Manchester United and NIKE Inc.'s wholly-owned
subsidiary, NIKE European Operations Netherlands BV ("NIKE"), forms a
strategic alliance between two global sports brands and commences 1 August
2002 for a term of 13 years. NIKE will have the option to terminate the
arrangements at 31 July 2008.
Financial Consideration
Commencing 1 August 2002, NIKE will pay to Manchester United sponsorship and
licensing fees of 133.4 million Pound Sterling (US$193.1 million at current
exchange rates) over the first six years of the agreement, and 302.9 million
Pound Sterling (US$438.5 million at current exchange rates) over the entire 13
year period. Net profits (over and above sponsorship and licensing fees)
generated by NIKE from the licensing, merchandising, and retail operations
will be shared 50/50 by Manchester United and NIKE. The amounts payable are
reduced if the football team does not finish in the top half of the Premier
League or does not compete in European competitions.
Manchester United intends to use the proceeds for general corporate purposes.
Non-replica Merchandising, and Retail Operations
NIKE will form a wholly-owned subsidiary to control the global licensing,
merchandising, and retailing operations. Manchester United and NIKE will each
appoint half of the directors, with NIKE appointing the chairman, who will
have the casting vote. On 1 August 2002, NIKE will then purchase certain
working capital and fixed assets, and will assume certain liabilities, of the
Manchester United worldwide non-replica merchandising and retail operations.
The purchase price will reflect the value of those assets and liabilities at
that time and will not exceed 15 million Pound Sterling (US$21.7 million at
current exchange rates) which currently represents less than 25% of Manchester
United's net assets. As of 31 July 2000, the net assets of Manchester
United's existing non-replica merchandising and retail operations had a book
value of 3.6 million Pound Sterling (US$5.2 million at current exchange
rates). During the year ended 31 July 2000, these operations generated
revenues of 20.1 million Pound Sterling (US$29.1 million at current exchange
rates) and produced a profit of 2.1 million Pound Sterling (US $3.0 million at
current exchange rates) before non-recurring costs, and 1 million Pound
Sterling (US $1.4 million at current exchange rates) after deduction of such
non-recurring costs. Upon completion of the agreement term or earlier
termination, Manchester United will purchase from NIKE the assets and
liabilities related to the non-replica merchandising and retail business. The
price will reflect the value of those assets and liabilities at that time.
Grass Roots Football Programme
As part of their contractual arrangements, Manchester United and NIKE will
jointly launch a grass roots football programme that will focus on youth
participation and skills development. The 1 million Pound Sterling (US$ 1.4
million at current exchange rates) annual cost of the programme will be fully
funded by NIKE out of its existing grass roots football commitment.
Manchester United
Manchester United are the current champions of the English League, a title
they have won on eleven other occasions. The club was formed in 1878 as
Newton Heath before changing its name to Manchester United in 1902. Whilst
the club has a long and distinguished history it first received global
recognition in 1958 when 23 people, including 8 players, were killed in the
Munich air disaster. Ten years later a rebuilt team won the European Cup.
Today the club has around 6 million fans in the UK alone and an estimated 30-
40 million worldwide. Whilst success on the field is at the core of
Manchester United's recognition globally, the club has also made its mark off
the field. As a business enterprise it sits in the FTSE top 250 companies,
markets its products in over 40 countries, has diverse business interests from
media to licensing and has successful operations in South East Asia, Ireland
and South Africa through the development of retail and merchandising outlets.
Manchester United Summary notes
- - Formed in 1878 as Newton Heath, renaming to Manchester United in 1902.
- - League Champions on 12 occasions, European Champions twice and FA Cup
winners 10 times.
- - End of Year results for 99/00 season, reached record levels of 116M
Pound Sterling turnover.
- - Firmly established as a FTSE 250 having been listed on London Stock
Exchange since 1991, with currently over 32,000 shareholders.
- - Currently have business interests in UK, Ireland, Scandinavia, South
Africa, and South East Asia.
- - International appeal reflected in 200 official supporter clubs in more than
25 countries, with registered members in over 119 countries.
- - Manchester United regularly features in television fixtures that are
broadcast to over 133 countries.
- - Multi faceted company with media interests in TV, Radio, Internet and
Publishing.
- - 30-40 million fans world-wide.
- - Old Trafford, Theatre of Dreams is one of the worlds finest football
stadiums with a capacity effective season 2000/01 of 67,500.
- - Aggregate attendance for 99/00 season reached 1,497,000 with average match
day attendance of 57,600.
- - Old Trafford experience includes a museum and exhibition; themed restaurant
called Red Cafe, Megastore, hospitality and banqueting suites.
- - ManUtd.com - the official website of Manchester United is one of the most
successful UK sporting sites, averaging 8.5 million page impressions per
month.
- - ISP - Virtual ISP - ManUFree.net - launched July 1999.
- - Other major commercial partners include Vodafone, Pepsi, Western Union, Sun
Microsystems, Lotus Software, Century Radio, McVities, Eurobet, Woolmark,
All:sports and Bass Brewers.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NIKE, Inc.
(Registrant)
Date: November 3, 2000
By /s/ Donald W. Blair
Chief Financial Officer