014. How to Kill Nike

On open source, sports' era of abundance, and the crisis facing the world's most iconic brand

When LeBron James entered the NBA in 2003 at 18 years old, social media barely existed, sports content lived on cable TV, sports betting was mostly illegal outside Nevada, and the most valuable sports franchise, Manchester United, was worth $970 million.

Two decades later, LeBron is somehow still dominating the NBA at 40, and sports has transcended its traditional boundaries. That same Manchester United is now valued at $6.55 billion, while the Dallas Cowboys top the charts at $9 billion. The NFL secured $110 billion for broadcast rights, sports betting generates over $10 billion annually, and sports media spans countless platforms and networks. What we're witnessing isn't merely growth – it's a fundamental reimagining of sports' role in our world. Sports is undeniably in its era of abundance.

ATHLETES, LEAGUES, MEDIA, MONEY - MORE, MORE, MORE

Today’s professional athletes are multi-hyphenates – they’re NBA players AND runway models, technologists, podcast hosts, rappers, actors / actresses, restaurateurs, and more. Elite college athletes become millionaires before playing their first game, and even team managers earn NIL contracts. Amateur adult athletics is growing exponentially too - good luck getting a bib for the New York City Marathon, where its 3% acceptance rate this year rivals Stanford’s.

The most popular leagues are only getting bigger. The NFL hit $20 billion in revenue in its 2023-2024 season, the NBA is projecting $15 billion for next season on the back of its $76B media deal, and English Premier League clubs collectively earned £6.5 billion in 23-24. Sports betting, now legal in 34 US states is already a $14 billion industry, and live sports streaming hours grew 30% around the world from 2022 to 2024.

Sports have gone truly global, with international viewership surging (40% of IPL viewers are outside India) and the NFL, NBA, and MLB hosting games in Abu Dhabi, Paris, Tokyo, and Berlin. Not to mention, the last 6 NBA MVPs have been foreign-born players from Greece, Serbia, and Cameroon (and 2025’s front-runner is Canadian).

Not only are the stalwarts of sports now billion-dollar behemoths, but series like Netflix’s Drive to Survive and SPRINT have propelled smaller sports like Formula One and Track & Field into the mainstream (whether you love or hate Noah Lyles, you still watched). There’s even a brand new track & field league, Grand Slam Track, that’s attracting some of the brightest stars in the sport away from the more traditional, low-paying Diamond League competitions. Younger, newer entrants are also popping up and growing the pie. Even newcomers like pickleball and padel are attracting serious investment.

Somehow, while most of the major players at this massive, global party are drunk and dancing to the music, one of the biggest names in sports has been in the corner holding its drink…

IS NIKE COOKED??

If you’ve been holding Nike bags the last 5 years, keep your head up champ

There are lots of takes out there about how Nike has lost its step, but I’ll propose an additional cause for the downfall of the Swoosh, and a vision for how I think sports brands evolve from here.

But first, a quick sidebar:

If you work in tech (or have a pulse?), you’ll surely know or have heard about the age old open source vs. closed source debate, that’s been reinvigorated by the multi-trillion dollar clash between the leading AI players, OpenAI, Anthropic, Meta, Microsoft, Google, DeepSeek, and xAI.

For the unaware, the premise is simple:

• Closed Source: proprietary code or IP. it’s built and operated by a centralized team that maintains full control of the products created with said code or IP. Innovation is driven by employees of a single entity, and the centralized control typically enables companies to easily monetize, license, and build customer lock-in around the IP.

• Open Source: code or IP is freely available. Anyone in the world can inspect, modify, or improve it, enabling community driven innovation. Given its free availability, products built with open source IP are often harder to monetize.

The battle lines in AI, and software more broadly, are clear: closed systems that strictly guard their intellectual property against open approaches that invite collaboration, transparency, and network effects. While the tech world grapples with this tension, the biggest, baddest sports brands made their choice years ago – and it's been firmly on the side of closed ecosystems.

IS NIKE COOKED?? (CONT.)

Nike, Adidas, Puma, and their ilk have operated like walled gardens for decades. They've built moats around their businesses through more exclusive athlete deals, proprietary technologies (e.g. NIke Air, Adidas Boost), and ironclad IP protection, all while innovating less on the products they deliver to consumers. This “closed-source” strategy served them well in an era when sports was a smaller and concentrated industry, distribution channels were limited, manufacturing know-how was scarce, and global reach required massive infrastructure. Now, this strategy may very well become what leads them to their grave: The same centralized control that enables brands to maximize quarterly profits also suffocates creativity and limits their ability to create new products that resonate with athletes and consumers today. While the sports industry has embraced abundance, major apparel brands are still operating from a place of scarcity.

While Nike is focused on signing eight-figure endorsement deals, its growing base of competitors are eating away its market share, financially and culturally (my friend DYM covered this trend in Business of Fashion). The fastest growing sports brands today are cults. Arc’teryx, On, Gymshark, Bandit, Rapha, Vuori, Tracksmith, and others have far more on the ground events, training clubs, and collabs with other local and sport-specific brands than they have focus groups and YouTube ads. They are often sport-specific, deeply understand what their consumers want, speak their community’s language fluently, and are participating in the sport alongside their consumers (Bandit Running started selling socks initially and their most popular pair reads “By Runners, For Runners”). These differences not only build loyalty and goodwill, but empower them to ship better, more innovative products. As much as I hate the phrase “community building,” I believe the best brands today empower and grow with their consumers and contributors, kind of like what Nike USED to do (remember NikeID??) and I predict this trend will only get more extreme in the future.

Upstart brands with cult followings have successfully tapped into community participation, but they're just scratching the surface. The next frontier? Something even more radical: fully open source brands.

THE FUTURE OF SPORTS BRANDS IS OPEN SOURCE

I believe newer, younger sports brands should and will invert the winning playbook of the previous decades:

• Heavy licensing and copyrights → no rights reserved

• Centralized design teams → distributed creation

• Proprietary technologies → shared innovations and open standards

• Global mass marketing → micro-communities and targeted distribution

• Passive consumption → active participation in brand evolution

Building an open source brand accelerates innovation at a pace that closed systems simply can’t match; open source harnesses the collective intelligence and creativity of a brand’s entire audience and erases the fundamental producer-consumer divide. These brands enable individuals or entities that create with or extend the brand to distribute products on the brand’s behalf, just as Linux powers most of the internet despite having no marketing budget and Wikipedia demolished Encyclopedia Britannica without a single paid editor.

Bandit Running x Berlin Braves Capsule (2024)

The maximally innovative and incentive-aligned version of open source brands will look a lot like decentralized protocols - where those that contribute to or extend the brand are also OWNERS of the brand itself, and not just distributors or composers of it. (This is also the thesis behind programmable media and a few popular cc0 NFT projects like Nouns, but I digress). When the lines between consumers, creators, and owners blur, brands build and endure a loyalty that million-dollar marketing budgets could never achieve.

Open source is not only an offensive strategy, it’s a successful defensive tactic as well (“commoditize your complement”) and could actually be deployed by Nike if they wanted to make a radical move. Imagine if Nike opened up its design processes for running shoes to the public, while maintaining control of its manufacturing and distribution system – they'd effectively turn design innovation into a commodity while retaining their biggest competitive advantages.

The resistance to this approach isn't technical but cultural. Legacy brands have spent decades building their empires top-down around secrecy, control, and ownership. Their incentive is profit, not building the best product. Their legal departments are built to protect IP, not share it. Their design teams are structured to work in isolation, not collaboration. Even if open-sourcing their IP presented a clear path forward (and I believe it could), the institutional inertia is likely too great to overcome without existential threat.

BUT if you’re just getting a sports brand off the ground, or starting it tomorrow, building it open source might be the best way to future proof it in an era of sports abundance.

For what the full implementation of an open source sports brand might look like, stay tuned…

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Thanks for reading the Blueprint! If you’re working on an open source brand or this post resonated with you, send me a DM on Twitter or Warpcast!