Companies walk a tricky line with endorsements
By The Associated Press
Published: Thursday, Oct. 18, 2012, 10:14 p.m.
NEW YORK — Nike forgave Tiger Woods after he apologized for cheating on his wife. It welcomed back Michael Vick once he served time for illegal dog-fighting. But the company dropped Lance Armstrong faster than the famed cycler could do a lap around the block.
What's the difference? A marketer's prerogative. The world's largest clothing and footwear maker has stood by athletes through a number of scandals over the years, but this week it became the first company to sever ties with Armstrong in the wake of allegations that he used illegal drugs to boost his performance during his 20-plus year racing career.
At least five other companies followed Nike's lead, highlighting the tricky relationship that evolves when marketers sign multimillion-dollar deals for celebrity and athletes to endorse their products.
“The tighter the association and the more intimate the relationship, it can sort of be like breaking up a marriage,” said Allen Adamson, managing director of branding firm Landor Associates.
Endorsement deals have been around for decades. The value of such deals are a closely held secret, but companies often are willing to shell out millions of dollars for celebrities to wear their shoes, use their equipment or appear in their commercials.
When a company does decide to end the relationship with a celebrity endorser, the stars often bow out without a fight. But sometimes letting go of a celeb can cause even more problems.
For example, Hanes underwear company dropped Steelers running back Rashard Mendenhall from its lineup in 2011 after he made controversial remarks about the death of Osama bin Laden and the Sept. 11 terrorist attacks over social media web sites. Mendenhall is now suing the company for breach of contract, claiming Hanesbrands wrongly terminated him and seeking $1 million in damages. The case is still being heard in the U.S. District Court in North Carolina.
Nike spends millions on endorsements. Of the $7.4 billion it spent on advertising, promotions and endorsement deals in the fiscal year that ended in May, 11 percent or $800 million, was for endorsements.
In the latest incident, Nike on Wednesday said that it would end its relationship with Armstrong, 41, a week after the U.S. Anti-Doping Agency released a massive report last week detailing allegations of widespread doping by the seven-time Tour de France winner.
Anheuser-Busch beer company, 24 Hour Fitness health club operator, Trek Bicycle bike manufacturer and Honey Stinger athletic products maker all followed the move, while Oakley sunglass maker said it would withhold judgment.
Steve Rosner, partner at sports marketing firm 16W Marketing in East Rutherford, N.J., estimates that Armstrong could have lost as much as $30 million in earning potential.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Pirates trade for Mets first baseman Davis
- Penguins’ Bylsma wants Cup version of Letang
- Latrobe woman texts searchers in Linn Run State Park to tell them she’s OK
- Orpik: Penguins must keep their cool
- Alvarez struggles as Pirates fall short against Brewers
- RiverQuest short of money, looks for a partner
- Survivors in critical condition a day after fifth Armstrong County car crash victim dies
- Rossi: Pens sticking to power-play plan
- Former Mystic Inn burns in Republic, Fayette County
- Engineer made most of opportunities in U.S.
- Police say Latrobe woman bought gun for boyfriend, who shot neighbor