The power of sponsor love
Apr 17
Staying with a problem athlete is not an easy decision for businesses and many times it proves to be a very costly one. For example, in 2009, when the Tiger Woods cheating on his wife scandal broke out, in just a couple of months, major sponsor companies such as Nike experienced a decline on the stock market in the order of billions, attributable to the scandal, according to the Wall Street Journal. Time has passed and Nike stuck with him, and even helped Tiger create the famous “apology” commercial. Nike didn’t stay beside Oscar Pistorius after he was arrested or with Marion Jones after the steroid scandal. The brand is still alongside tennis superstar Maria Sharapova, despite the 2-year ban from competition for using meldonium.
Speedo also supported their star athlete Michael Phelps through his marijuana and DUI adventures, only for him to ditch them in 2016 for a new company. What Speedo would have loved to know beforehand is probably Ryan Lochte’s storytelling skills, for the whole robbery saga that was created at the Rio Olympics. The company did drop him, together with his other sponsors, before any official legal charges were made. So where is the difference? What are the criteria used for making the decision whether to continue supporting an athlete?
First, you can easily add the word “star” before the name of every athlete sponsors continued to support even in a moment of crisis. Woods, Sharapova and Phelps are all superstars and champions in their sports and overall.
Second, it is usually about the nature of the offense, how consumers perceive it and the degree of negative attitude it receives. The Jones and Pistorius scandals were unforgivable and unforgettable, something not good for a brand. The Lochte scandal appears to easily go away (he is on Dancing with the stars); however, Speedo wanted to be able to fully take advantage of the positive aspects of the Olympics and not have consumers distracted.
Third, it is also about the length of the relationship, the sentimental connection. Athletes like Tiger Woods and Sharapova have worked since their debut with Nike, making the company a lot of money and also establishing rapport with the organization. It is not easy to let a lifetime of happy and profitable relationship go away, even in business. Unless consumers signal that time has come.
Image source: WVUsports.com, 2017
Maria Petrescu, Ph.D., is an Assistant Professor of Marketing in the H. Wayne Huizenga College of Business and Entrepreneurship, Nova Southeastern University. She can be reached at mpetresc@nova.edu
#1 by Phoenix Pop Productions on 4/27/17 - 3:18 PM
#2 by Mike Olivier on 5/17/17 - 11:09 AM
#3 by Natalia Carvajal on 5/17/17 - 10:53 PM
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#17 by Kridtiya Thammajaro on 5/20/17 - 12:11 AM
#18 by Rose Muselaire on 5/20/17 - 11:09 AM
#19 by Sarah cole on 5/20/17 - 11:37 AM
While I do not agree that the length of the professional relationship can save any athlete from being dropped if the offence is so massive that time or public relations work can save it, I do agree that the nature of the offence and how the consumer perceives it also can be a driving factor in that decision. Maria Sharapova can be easily forgiven because the general public may not recognize the drug meldonium, whereas steroids is extremely distasteful because the public clearly realizes that this a performance enhancing drug.
Basically, the decision to keep or cut a sponsor lies in the public perception of the indiscretion. Can it be forgiven or forgotten, then it is work the continued investment as there will be a return on that investment.
#20 by Innocent Laurent on 5/20/17 - 2:49 PM
#21 by Brandon Conte on 5/21/17 - 9:50 AM
#22 by Susan Duarte on 5/21/17 - 6:12 PM
#23 by Lubabah A. Chwdhury on 5/21/17 - 7:13 PM
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#39 by Vicky Saget on 5/23/17 - 2:38 PM
#40 by Abraao Pinheiro on 5/23/17 - 4:35 PM
I believe that, besides the scandals involving criminal offenses, the Lochte scandal in Rio was one of the worst and the brand had no other choice but to pull sponsorship because, unlike the doping and the Tiger Woods affairs this one offended an entire nation. It evoked discrimination. Should Speedo have kept its sponsorship, it might have compromised it's entire operation in Brazil during and after the olympic games and potentially in other places too.
#41 by Maria Esquerre on 5/23/17 - 4:50 PM
#42 by Hussein Rakine on 5/23/17 - 4:57 PM
#43 by Pamela Danberg on 5/23/17 - 10:13 PM
#44 by Amanda Gomes on 5/24/17 - 12:33 AM
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#49 by Vijay Knight on 5/24/17 - 8:43 PM
#50 by Daniela De Nicolo on 5/24/17 - 10:08 PM
I also think it is affected by what is socially accepted overall. For example, aside from the fact that Michael Phelps was pretty much at the peak of his career, and this played a huge role as to Speedo’s decision, we also have to take into consideration some of the social norms and the changes that are taking place in society. Marihuana does not have such a negative stigma on younger generations as it did before, and still does to older generations. Didn’t Miley Cyrus’ award acceptance include a statement indicating that she was smoking it? As a matter of fact, countries and states were and are working towards legalizing this drug. Therefore, Michael Phelp’s incident does not appear to be major compared to others. I understand kids look up to these stars for guidance and such, but it wasn’t something that a good PR approach couldn’t have contained the damage and easily forgotten. On the other hand, homicide, is not acceptable by anyone, therefore, it would make complete sense to drop Pistorius.
Anyhow, I agree with this blog that the amount of revenue that each star contributed in generating has a lot to do with their decision. Furthermore, there are certain errors that can be considered as minor and easily forgotten. There are some that simply cannot be ignored. If any star of the caliber of Phelps, Woods or Sharapova, committed such a crime, I would expect all of the sponsors to part ways as it also becomes an ethical issue.
#51 by Latavia Madison on 5/25/17 - 6:36 AM
#52 by Karen Tigse Viteri on 5/25/17 - 1:49 PM
#53 by Hillary J. Taylor on 5/25/17 - 3:00 PM
#54 by Mehedi Hasan on 5/25/17 - 5:25 PM
#55 by Derek Bisson on 5/25/17 - 5:54 PM
#56 by Sheandra Newton on 5/25/17 - 6:02 PM
This isn’t necessarily true. Consumer are emotional and in the heat of the moment can overreact. In cases where the wrongdoing is a moral issue such as the Tiger Woods cheating scandal, I do not think ties need to be severed. Tiger Wood’s inability to stay faithful to his wife had nothing to do with the values of the brands he endorses. Nike did a good thing by sticking with him and helping him through it. In fact, I respect Nike more as a brand for it.
#57 by Marco Gutierrez on 5/26/17 - 10:39 AM
#58 by Jo A. Altamirano on 6/2/17 - 2:04 PM
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