Republican Gov. Doug Ducey of Arizona and Colin Kaepernick's Nike ad. Photos: Ralph Freso/Robert Alexander/Getty Images

Republican Gov. Doug Ducey of Arizona said he will yank state funding for a Nike plant following the shoe maker's "terrible decision" to cancel a sneaker line with the colonial version of the American flag.

The big picture: On Monday, the Wall Street Journal reported that former NFL quarterback and Nike spokesperson Colin Kaepernick told Nike the "Air Max 1 Quick Strike Fourth of July" featuring the Betsy Ross flag is considered offensive with racist symbolism and asked for it not to be released.

“Words cannot express my disappointment at this terrible decision. I am embarrassed for Nike. ... Instead of celebrating American history the week of our nation’s independence, Nike has apparently decided that Betsy Ross is unworthy, and has bowed to the current onslaught of political correctness and historical revisionism."
— Gov. Doug Ducey said in a Twitter thread

The backdrop: Nike had plans to invest $185 million in Goodyear, Arizona to open a plant with 500 new jobs. The Goodyear City Council approved on Monday about $1 million in incentives to reimburse Nike for the hires and planning fees.

The original American flag was designed by Betsy Ross in the 18th century with 13 stars representing the original colonies. Reports have shown the flag's present day use has been largely in support of white supremacy and nationalism, per The American Nazi party once adopted the Betsy Ross flag as a symbol, the BBC reports.

  • In 2016, the superintendent of a Michigan school district apologized after students waved the Betsy Ross flag at a high school football game, reports.
  • The local chapter of the NAACP put out a statement following the incident saying the flag has been appropriated by some extremist groups who disapprove of diversity in the U.S.

The bottom line: Kaepernick has had considerable influence on Nike's brand since 2018 when he signed as a spokesperson with a provocative ad campaign. Since then, Nike's sales have been higher in both the U.S. and China. According to Reuters, the company’s fourth quarter earnings saw sales rise 4% to $10.18 billion with an increased share price of more than 15% in 2019.

Go deeper: By the numbers: The rise of "belief-driven" buyers

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