Hanover

30 Mar 2016

Brands are paying more than ever before to the athletes and celebrities that they choose to endorse their businesses and products. Tennis supremo, Roger Federer topped the yearly sponsorship earnings of sport stars once again in 2015, estimated to be making in the region of $58m a year from his deals with Nike, Rolex and Credit Suisse, amongst others.

This significant investment can provide unparalleled reach and awareness through media coverage, advertising campaigns or by product placement of merchandise with logos. Arguably though, these fantastic assets can become an organisation’s biggest threat on the publication of one negative headline. Why then, is there historically such a small focus on crisis and reputation management when engaging and positioning these external ambassadors as the ‘face of the brand’?

In 2009, the Wall Street Journal reported that Tiger Woods’ off-course issues cost his corporate sponsors such as PepsiCo, Nike, Tag Heuer and Accenture over £8 billion in stock value. Since then, Oscar Pistorious has been found guilty of murder and high-profile doping scandals involving Lance Armstrong, and more recently, Maria Sharapova remind us that these news stories not only implicate the celebrity but also affect the reputation of the companies that affiliate with them.

At times of controversy, the businesses that keep these individuals on the payroll quickly find themselves thrust into the spotlight, their association significantly damaging public brand perception if not dealt with adequately. On March 7th 2016, a media frenzy greeted Sharapova’s ‘meldonium’ press conference, with coverage stretching far beyond the back pages. In a venue that she herself described as a ‘Downtown Los Angeles hotel with a fairly ugly carpet’, the WTA world number 9 took to the microphone to declare to the world that she had failed a routine drug test during the Australian Open in January.

In an attempt to control the story, the most marketable female athlete in the world made the first move and initially appeared to secure some level of public support. The limited availability of content of a negative nature resulted in less harsh judgements than might have been expected, with tennis great Martina Navaratilova summing up a surprisingly generous initial public reaction on social media, Tweeting: hope this gets cleared up as it seems 2 me to be an honest mistake”.

By the time features were written and board-level decisions had been made by her stable of sponsors, the mood had changed and support dwindled from the people that would continue to feed the story. Fellow professionals spoke out against Sharapova, including Andy Murray’s perspective that: If you’re taking performance enhancing drugs and you fail a drugs test, you have to get suspended”. Sponsors Nike and Porsche put their agreements on hold and Tag Heuer decided not to renew their association with the tennis star within 24 hours of the announcement.

Culpable by their association, the expectation from media and the public is that brands should quickly make a formal response, stating either their support or their disapproval.

After all, they reap the benefits of on-field success and push athlete-related content through every earned, owned and paid channel they can, right? Understandably there’s a flip side to that when the biggest story of the day is a negative one.

Having a crisis plan in place is the first step towards ‘getting on the front foot’ and speaking with a consistent voice once a formal comment is made. A brand will never be able to control all of the elements in these stories, but rigour involved in being prepared for the worst positions a business to make an informed decision and reduces risk.