Editor’s note: Kristopher Hull is digital director, Americas at TNS.
Is this the era of zero-tolerance in sports sponsorship? After the announcement that five-time Grand Slam champion Maria Sharapova was dropped by all major sponsors following a failed drug test, marketers are under more pressure than ever to scrutinize how their brands are represented by individuals and the potential impact of their own sponsorship deals.
There is no doubt that sponsorships and endorsements are still big business in the sporting world, as Sharapova reported to have earned a staggering $23 million from endorsements, dwarfing her $6.7 million earnings from tennis.
Yet we are also seeing a new era in sports sponsorship, with brands adopting a zero-tolerance attitude toward scandals. Perhaps understandably in this age of instant news, brands are responding to crises straightaway to avoid the risk of association with the sportsperson under fire. We are seeing bold statements issued within just hours of the news breaking about the brand’s disappointment and the need to cut ties. In the past, brands have taken a more considered attitude in waiting to see how the story would play out or have waited for the news to pass.
Nike was the first to cut ties with Sharapova, demonstrating the importance of striking a balance between an instant, knee-jerk. reaction and responding quickly with a clear point-of-view about sport and fair play. Tag Heuer was another major sponsor who, following the announcement, decided to not renew their sponsorship contract, along with Porsche who suspended their three year contract with the athlete. Evian claimed to still be investigating the situation.
In a world of 24 hour media, brands feel pressured to immediately distance themselves – often before they have all the facts.
These brands have been criticized for being too quick to drop Sharapova as they are less hasty with their male athletes. It can be argued that it’s a hasty decision from Nike as they have previously stood by Armstrong, Tiger Woods, Michael Vick and even Oscar Pistorius during troubled times.
Nike was criticized for not taking the events with Woods more seriously, with the chairman and co-founder Phil Knight telling SportsBusiness Journal, “When his career is over, you’ll look back on these indiscretions as a minor blip but the media is making a big deal out of it right now.”
Analysis from TNS around the Woods’ scandal in 2009 found that Accenture took the biggest hit in terms of its brand equity – the first major sponsor to cut ties with golf superstar – while Nike continued to back the sportsman.
According to TNS Media Intelligence data, Woods appeared in 83 percent of Accenture’s advertising, or about $41.5 million worth of the firm’s overall media outlay, and only 4 percent of Nike’s ad efforts, which TNS pegs at $75.2 million through the first 10 months of this year.
Consistency is the key for any brand’s positioning. Nike continues to sponsor American sprinter Justin Gatlin who has failed drug testing twice, leaving some question as to why Sharapova has been dropped so quickly. This might be explained by the increased pressure for brands to disassociate themselves from certain allegations, as well as the changing landscape, where social media can make controversies catch fire much faster, forcing brands to (over)react quickly to avoid getting caught up in the storm.
This forces us to ask the question: Had Woods’ controversy happened in today’s climate, would it have led to a similar outcome? What we do know is that Nike has only immediately suspended its relationship with Sharapova and not terminated it outright.
The popular growth of companies such as athletic footwear brand, New Balance and sports clothing company, Under Armour, has bridged the gap when it comes to brand competition in the sports market. This means that big brands such as Nike and Adidas are forced to be more careful when managing their relationships with personalities to ensure their reputation is upheld.
It’s standard practice for sponsors to put out an initial holding statement when any sort of crisis develops involving athletes, teams or competitions. However, with the added impetus on brands to react, the cut-throat industry of sports sponsorship continues. Marketers need to consider even more carefully the delicate balance of risk and reward when it comes to future sponsorships.