In case you haven't heard, Nike is absolutely killing it lately. Last month, its 2016 first quarter earnings of $8.4 billion managed to surpass even the expert's predictions. Next, it was reported that it's one of the only major brands that's experiencing growth in China. Finally, earlier this week we learned that the company's shares had reached an all-time high value. Everything's all good, right? Not so fast.
Just when it sounded like things couldn't go wrong, we're learning that the brand has been hit with a massive fine in French courts for its role in a European soccer scandal between 2000 and 2005. According toNDTV, Nike engaged in illegal tax practices with soccer club Paris Saint-Germain when it failed to report player's salary increases. Now, the brand is being fined €5.5 million, which converts to $6.2 million USD.
Named in the suit are players like France's Nicolas Anelka and Brazil's Ronaldinho, although it is not specified exactly how much of their pay raises were withheld. Per the article, Paris Saint-Germain has also been forced to pay $6.2 million to the French Urssaf, an organization tasked with collecting social security payments from employers and employees.
At the end of the day, this shouldn't be much of a hurdle for Nike to overcome, but it's proven to be an extremely costly misstep nonetheless.
