Should USA Gymnastics Have Signed with Nike?

00;00;00;00 - 00;00;49;16
Mark Conrad
Hello and welcome to the Sports Business Podcast. The show that explores the cutting edge issues in the world of professional, collegiate, amateur and Olympic sports. I'm Mark Conrad or Prof. C and I teach at Fordham University's Gabelli School of Business, or I serve as professor of Law and Ethics and the director of the Sports Business Initiative. Remember USA Gymnastics, the governing body for the sport whose executives were implicated for their inaction in the Larry Nassar sex abuse scandal?

00;00;49;18 - 00;01;22;03
Mark Conrad
The organization sued for hundreds of millions of dollars by those victimized by the sex abuse. Many, including myself, thought that the national governing body for women's and men's gymnastics should be decertified and a new body be created. However, I have to admit that this view may have been premature, but it does not mean that things are smooth sailing. On the positive, through serendipity or just plain good luck,

00;01;22;05 - 00;01;57;18
Mark Conrad
Simone Biles returned in superb form to capture the all around title, her eighth at the recent USA Gymnastics Championships. It comes two years after she had to withdraw from several events at the Tokyo Olympics due to a mental block known in gymnastics parlance as the twisties. Suffice it to say this is an astounding triumph for her. And it also seemed to be kumbayah time for USA Gymnastics and its CEO, Li Li Leung.

00;01;57;20 - 00;02;33;11
Mark Conrad
In 2019, Leung was appointed the CEO of USA Gymnastics. A former elite gymnast who served as an NBA vice president specializing in sponsorship and marketing, Leung was tasked to reestablish the organization's credibility. She took the helm of an organization facing huge challenges. One was the departure of all of the organization's sponsors due to the media and public backlash from the USA Gymnastics, failure to report the sexual abuse by coaches and the women's team

00;02;33;11 - 00;03;07;19
Mark Conrad
Doctor, Larry Nassar, to authorities. In addition, she had to clear an organization that found itself in bankruptcy court due to the liabilities it faced. More importantly, Leung had to gain the trust of the gymnastics community of 200,000 members. She had to ensure that gymnastics is a safe space for young women. She had to find new sponsors. In sum, she had to make USA Gymnastics more transparent and far more respected.

00;03;07;21 - 00;03;40;13
Mark Conrad
Four years later, Ms. Leung can claim some success. The organization settled lawsuits by Nassar victims for a total of about $380 million. It crafted a plan for reorganization to emerge after bankruptcy. Under her watch, athletes were given a greater say in the organization. On one level, Leung did what many thought could not be done, made USA Gymnastics respectable and no longer a poster child for toxicity.

00;03;40;16 - 00;04;10;17
Mark Conrad
She capped off the success by securing an expanded partnership deal. But there are still trouble spots: some questionable hires; too many coaches under investigation for abusive conduct; even a seemingly petty matter denying press credentials to the championships to Scott Reed of the Orange County Register, who has tenaciously covered the sport for 20 years, often critically, but honestly.

00;04;10;19 - 00;04;40;26
Mark Conrad
But there's one stain on Leung's tenure that makes me particularly uncomfortable. It is the expanded partnership deal with Nike. Nike will be exclusive apparel and footwear provider for the men's and women's national teams through the 2028 Los Angeles Olympics. Although figures were not reported, the organization says it is the biggest sponsorship in terms of both annual value and total value for the national governing body.

00;04;40;28 - 00;05;11;12
Mark Conrad
Here is why I am uncomfortable. Given the history of this governing body, I wonder if Nike is the best choice to be the organization's sponsor. The company has been justifiably criticized for its treatment of female runners at its former elite track club called the Nike Oregon Project. Former athletes have accused its Nike backed coach, Alberto Salazar, of body shaming, doping and even sexual misconduct.

00;05;11;15 - 00;05;40;17
Mark Conrad
Salazar has since been banned from coaching by both the U.S. Anti-Doping Agency and USA Safe Sport. In the fall of 2022, I interviewed one of those elite women's runners who wrote a bestselling book that details that atmosphere. For those interested, the interview is on our Gabelli Sports Initiative YouTube channel. Given what so many female gymnasts endured, is a partnership with Nike,

00;05;40;20 - 00;06;14;19
Mark Conrad
yes, that Nike, who permitted abuse under its watch, in the best interest of USA Gymnastics? It is ironic that USA Gymnastics, an organization with a history of looking the other way regarding abuse of its elite female gymnasts, would partner with a company with its own controversial history of treatment of female athletes. A sad irony indeed. Despite some successes in bringing USA Gymnastics from the brink, Li Li Leung has some explaining to do.

00;06;14;21 - 00;06;36;22
Mark Conrad
Thank you for listening. Until next time, this is Prof. C for the Sports Business Initiative.