Nike Sport - Sportswear

In 1963, Bill Bowerman and Philip Knight founded Nike with the idea of importing high-performance, affordable sports shoes from Japan, challenging the dominance of German brands like Adidas and Puma. By 1981, Nike had become the leading sports shoe brand in the United States before going public and launching iconic products such as the Air Force One and the Air Jordan basketball sneakers. However, in 1997, the company faced a major controversy following accusations of child labor in its subcontracting factories. In 2021, Nike was impacted by the Covid-19 crisis, leading to the cancellation of some athlete sponsorships and the non-renewal of global contracts. Additionally, allegations emerged regarding deceptive business practices and complicity in concealing forced labor, particularly in connection with the treatment of Uyghurs in Xinjiang, China. Nike’s involvement in lobbying efforts to weaken legislation banning imports from Xinjiang further exacerbated its controversies and damaged its efforts to maintain its reputation and market position. Tax optimization The *Paradise Papers*, published in November 2017, reveal that the sports equipment manufacturer engages in tax optimization through a series of financial arrangements between the Netherlands and the Bahamas, allowing it, according to *Le Monde*, to “reduce its effective tax rate to 2% in Europe” compared to an average of 25% for European companies. More specifically, since 2014, Nike has been routing all its European revenue to a Dutch subsidiary, which then transfers the brand usage rights to another entity, Nike Innovate, artificially depleting its profits. Nike Innovate exploits a loophole in Dutch legislation known as the “CV-BV” structure: Dutch tax authorities consider this subsidiary should be taxed in the United States, and vice versa. As a result, Nike Innovate pays no taxes at all.