How a sponsor reacts to scandal within the sport they are associated with defines their role and how they are perceived by the fans. Over the last couple of months, it has been interesting to view the reactions of brands to the various controversies that have been hitting the headlines. In this blog we assess whether their reactions have been justified and effective.
This issue has never been in sharper focus given the recent scandals surrounding FIFA and the IAAF. Most of the sponsors of these organisations have handled this well by exerting internal pressure to bring about positive change. However, Adidas have taken a very inconsistent approach to these two particular rights holders; dropping the IAAF on ethical ground whilst maintaining their FIFA relationship when, arguably, the corruption with the global football rights holder has dwarfed the issues within athletics. The cynics amongst us will conclude that Adidas’ ‘ethical’ position and subsequent withdrawal decision was more about providing an opportunity for an internal strategic shift rather than upholding their corporate principles. This is a very dangerous approach to take, fans will see this as a disingenuous strategy and react accordingly.
Additionally, it has been astonishing the speed at which Maria Sharapova’s sponsors have dropped her last week since her drug admission. Whilst she has admitted wrong-doing there has yet been any comment or sanction by the ITF or WADA. It feels unjustified and unnecessary for her sponsors to have dropped her so quickly especially as the case has yet to be fully played out, especially in light of her claimed extenuating circumstances. The reactions of Nike, TAG Heuer and Porsche seems knee jerk and certainly do not enhance their credibility with her or the sport. They have the ability to say they are reviewing the situation and allow the relevant authorities to publish their findings prior to acting. Like Adidas, these sponsor reactions feel as though they are based on an unrelated internal agenda rather than a moral judgement.
The key to countering any potential negativity is a sound strategy and proactive crisis planning. By understanding all of the possible issues from the outset will allow brands to evaluate the property accurately, assess risk and plan for any particular issues. As consumers look to their brands to take a more ethical standpoint, it is no longer feasible for sponsors to abstain from commenting or acting on the major issues; fans expect, within reason, for their brands to act in their interest. If managed correctly, it will only strengthen their position and benefit their association. If, during their initial planning, brands identify ‘red lines’ then they will be able to act accurately without losing any integrity. However, if brands use scandals as an excuse to change direction it will damage them. Sound strategic planning should ensure that changes in direction are not required mid-term and allow the correct decision making if genuinely a red line has been crossed.
We believe that the brands highlighted in this blog have not acted correctly in the face of their respective scandals. There may be a variety of reasons for this however once a sponsor loses integrity it will take a long time to restore. Sport will always be liable to scandal and brands looking to enter into sponsorship need to assess their risk threshold prior to commencing the relationship. This will flush out any business anxieties and define their crisis management strategy. Sponsorship is a warts and all communication platform. The benefits can be significant; it is not always an easy ride however consistent and credible long term planning and support will counter any potential downside.