Shoe Dog

by

Phil Knight

Shoe Dog: 14. 1974 Summary & Analysis

Summary
Analysis
On April 14, 1974, Knight finds himself in a federal courtroom facing down Onitsuka and their head lawyer, Wayne Hilliard. Knight listens as Hilliard gives his opening statement. Hilliard claims Knight and his friends “conned” Onitsuka into partnering with them because they claimed they had a shoe company, when one did not yet exist. While listening to Hilliard, Knight finds himself siding with Onitsuka. However, when Houser stands up immediately afterward and makes the case for Blue Ribbon, Knight feels reassured. He is proud of the work he has done and Houser for defending him.
Knight’s feelings in the courtroom reflect his feelings in general about his relationship to Onitsuka. He knows he has not acted 100% ethically; he lied multiple times to Kitami and other members of Onitsuka and snooped through Kitami’s files. However, Knight also believes his hard work has given Onitsuka a name in America and does not think his lousy behavior outweighs the good.
Themes
Entrepreneurship, Experience, and Perseverance Theme Icon
Global Economies Theme Icon
Blue Ribbon acts as the plaintiff in the case, so they present their side of the story first. Knight is the first witness Houser calls to the stand, and he gives a terrible performance. He is incredibly nervous the entire time and barely gives coherent answers. He feels his performance likely read as lying, even though he was always truthful. Even when Houser questions Knight, he has a hard time coming up with answers. Then, when Hilliard takes his turn, Knight gets decimated and leaves the stand feeling he has lost the case.
This is one of the few moments in the memoir where Knight fails his team. Generally, Knight is well-prepared and manages to get rid of his nerves in important situations. Here, he can barely get a sentence out, which looks bad considering his testimony is arguably the most important of the entire case. Knight’s poor performance does not mean Blue Ribbon will lose the case, but it is not a good start.
Themes
Entrepreneurship, Experience, and Perseverance Theme Icon
Leadership Theme Icon
Global Economies Theme Icon
Luckily, there is a lot more of the trial still to go. Furthermore, Houser and Strasser think James the Just—the judge in the proceeding—is on Blue Ribbon’s side. A few days into the trial, James the Just orders everyone to stop talking about the case in public because it is causing a media circus he wants to avoid. Everyone promises they will refrain from speaking on the case again until it is over.
James the Just’s order is a common instruction for this type of trial, and he expects both sides of the case to uphold it. If one side fails to do what James asks, it will reflect poorly on them and could sway the outcome of the trial.
Themes
Entrepreneurship, Experience, and Perseverance Theme Icon
Unfortunately, the same day, Johnson leaves the courtroom and discusses the case with an old friend of his. When he enters the courtroom the next day, Johnson sees his friend speaking with the Onitsuka lawyers. Evidently, Johnson’s friend betrayed him, which makes Blue Ribbon’s side look bad because they talked about the case in public just hours after they were told not to. Knight worries this incident will bias James the Just against them.
Johnson’s discussion with his old friend is the first time he’s ever let Blue Ribbon down. More than likely, Johnson did not even consider James the Just’s order because he did not consider discussing the case with his friend as any sort of public statement. However unfair the situation may be, it still reflects poorly on Blue Ribbon.
Themes
Entrepreneurship, Experience, and Perseverance Theme Icon
Get the entire Shoe Dog LitChart as a printable PDF.
Shoe Dog PDF
However, Johnson makes up for his error when he takes the stand. His testimony is one of the highlights of the trial, and he paints Blue Ribbon in the best light possible. Less impressive is Bowerman’s testimony. Despite Bowerman’s usual calm demeanor under pressure, he does not do well on the stand. Knight can tell Bowerman did not prepare for the trial because he did not feel he needed to. Knight does not get angry with Bowerman, but he is disappointed because his legal team thought Bowerman’s testimony would be a slam dunk for their case.
Blue Ribbon’s side of the case is a bit of a mixed bag. Certain key witnesses perform well, while others flop on their face. Bowerman’s testimony comes as a surprise because he is usually so reliable. However, it seems his arrogance did him in because he refused to take the case seriously. Knight is disappointed with Bowerman because his error could cost Blue Ribbon the case.
Themes
Entrepreneurship, Experience, and Perseverance Theme Icon
Leadership Theme Icon
Global Economies Theme Icon
However, Blue Ribbon gets a win when Iwano, Kitami’s assistant, takes the stand. Iwano’s testimony is entirely honest and helps Blue Ribbon more than it does Onitsuka. Unfortunately, every time Blue Ribbon seems to get a win, they follow it up with a loss shortly afterward. Woodell is the final person to go on the stand, and he is even more nervous than Knight was. He barely manages to spell his name and breaks down into a nervous laughing fit when questioned, which enrages James the Just.
Iwano’s testimony is huge because it is an instance of someone from Onitsuka’s side of the case confirming most of Blue Ribbon’s side of the story. Meanwhile, even if some of their testimony left a lot to be desired, no one on Blue Ribbon’s side of the case has come close to defending Onitsuka.
Themes
Entrepreneurship, Experience, and Perseverance Theme Icon
Global Economies Theme Icon
After Blue Ribbon rests its case, it is Onitsuka’s turn. They start by calling Mr. Onitsuka to the stand; Mr. Onitsuka pleads ignorance regarding the entire matter. After Onitsuka, Kitami takes the stand and requests a translator despite speaking fluent English. Knight is outraged that Kitami would lie about his fluency, and his testimony is even worse. Everything he says on the stand is a lie; he even claims he never intended to break the Blue Ribbon contract.
Mr. Onitsuka’s plea of ignorance could come from a place of honesty. As far as Knight knows, Mr. Onitsuka is completely detached from Kitami and his plans; he placed his trust in Kitami, but otherwise he has nothing to do with the recent developments between the two companies. Meanwhile, Kitami’s testimony is a shock precisely because of how dishonest it is.
Themes
Entrepreneurship, Experience, and Perseverance Theme Icon
Global Economies Theme Icon
After Onitsuka rests its case, everyone is dismissed while James the Just contemplates the case. A few weeks later, everyone returns to the courtroom to hear the verdict. James the Just rules in Blue Ribbon’s favor because, although he thinks everyone is in the wrong, the Blue Ribbon team was honest while the Onitsuka team was not. Among other things, James the Just apparently caught on to the fact that Kitami did not need a translator.
Again, Blue Ribbon gets rewarded for its honesty. This scene in the courtroom recalls the earlier scene in Chicago where the salesman bought shoes from Nike simply because they trusted Blue Ribbon. It also bears similarities to the scene where the Woodells lend Knight money because they trust him and his vision for the company.
Themes
Entrepreneurship, Experience, and Perseverance Theme Icon
Leadership Theme Icon
Global Economies Theme Icon
One week after the trial, Blue Ribbon gets a settlement offer from Onitsuka for $400,000, half of which goes to Houser’s firm for their work on the case. The sudden influx of cash gives Knight leverage with his bank, which is especially helpful now that he can go back to focusing on business as usual. Kitami meets with the Blue Ribbon team in person to the sign papers, which will end their feud once and for all. To Knight’s surprise, Kitami shakes his hand. Knight and his team do their best to be gracious winners Following Blue Ribbon’s victory in court, Knight hires Strasser to work for the company full-time. Strasser happily accepts the position, as he feels like he is already part of the team.
Following the trial, Knight and Blue Ribbon are in the best shape they have been in for a long time. Although their financial problems still exist, Onitsuka's huge amount of cash is a major help and will give Knight the time he desperately needs. Additionally, now that Blue Ribbon is no longer a part of Onitsuka, they can continue to develop their Nike brand independently without worrying about interference from another company.
Themes
Entrepreneurship, Experience, and Perseverance Theme Icon
Leadership Theme Icon
Global Economies Theme Icon
Blue Ribbon gets about two weeks to celebrate its legal victory before trouble starts brewing again. In 1974, the yen begins fluctuating rapidly, and Knight begins to think that Japan is no longer a good place to manufacture Nikes because the market is so volatile. Knight begins eyeing new manufacturing spots including Taiwan, Puerto Rico, and America.
Although Knight needs to find a new place to produce his shoes, he is in a better position than he was before because he will be in charge of everything and will not have to answer to anyone. Nonetheless, the financial situation in Japan is a problem, especially since Blue Ribbon still has an equity problem.
Themes
Entrepreneurship, Experience, and Perseverance Theme Icon
Global Economies Theme Icon
Ultimately, Knight decides to use a factory in New England, which he feels makes the most sense economically and practically. Unfortunately, Knight needs someone to run the factory, and he knows he only has one good option: Johnson. Johnson is not happy when he hears the news. He just moved back west only a year ago, and now Knight wants to send him back east. However, as always, Johnson eventually accepts Knight’s deal.
Again, it is fair to question whether Knight's treatment of Johnson is fair, even if he does think it is necessary. Johnson is the ultimate team player, which Knight knows and constantly takes advantage of that fact. Luckily, Blue Ribbon is turning into a significant company, and if it keeps growing, Johnson is third in line after Knight and Bowerman to reap the rewards.
Themes
Entrepreneurship, Experience, and Perseverance Theme Icon
Leadership Theme Icon
Global Economies Theme Icon
By the end of the year, Blue Ribbon is set to hit $8 million in sales, and they show no sign of slowing down. Knight continues to spend money that he does not have, much to the chagrin of his bank. He also signs new celebrity endorsements, including Jimmy Connors, a talented young tennis player. In addition, Prefontaine is still smashing records and being an amazing spokesperson for Blue Ribbon. Knight is overjoyed to have Prefontaine on the team and thinks he will be there forever.
Despite Blue Ribbon's many pitfalls, Knight has his company in a great place at the end of 1974. Eight million dollars in sales is over $50 million today. Knight still does not see much of that money because he puts it back into the company. However, if he can fix Blue Ribbon's cash flow problem, he and the other founding members of Blue Ribbon will become wealthy men.
Themes
Entrepreneurship, Experience, and Perseverance Theme Icon
Leadership Theme Icon
Quotes