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Maria Sharapova And The Brand Dilemma

How do marketers make the decision to carry on, suspend, or end an athlete sponsorship?

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It took less than 25 hours for brands like Nike, Tag Heuer, and Porsche to react and issue statements regarding tennis star Maria Sharapova's admission of failing a drug test at the Australian Open. The swoosh was "saddened and surprised" at the revelation and has suspended its relationship with Sharapova, who sits at seventh in WTA world rankings. Watch brand Tag Heuer has cut ties completely, though the brand was in negotiations with Sharapova to renew a contract that ended late last year. And Porsche, which signed a three-year deal with her in 2014, has said it has chosen to "postpone planned activities" involving Sharapova.

It's now one of the first questions after a pro athlete is involved in any sort of controversy—how will their brands react? The sheer amount of money and marketing thrown at these pros means that with the slick, stylish ads in good times, comes scrutiny and potentially disastrous financial consequences when things go bad.

Matt Delzell, managing director of the talent practice at Omnicom's The Marketing Arm firm, says there is no definitive playbook for these scenarios but because brands are now forced to react almost immediately, they should have a checklist of appropriate actions. And the first thing on that list is to go back over the contract.

Photo: Flickr user Mike McCune

"Most of the contracts we do have a two-pronged image conduct clause," says Delzell. "The first is anything that has legality attached to it, like being charged with a crime, there will be an action triggered by that in the contract. The other is from a moral standpoint. Tiger Woods cheating on his wife isn't illegal but that type of thing may trigger any specific morality clauses in the contract. We'd lay out every possible option for the client, ranging from do nothing to terminate the agreement, and everything in between. I'd then balance out the spirit of what's in the contract to the letter of the contract. Is what she did understandable, did her explanation make sense, her apology genuine, and all the factors you could look at through a subjective lens."

The impact of social media outrage is a relatively new consideration in a situation like this. Before Sharapova's news conference was over, there were calls on Twitter for reactions from Nike and other sponsors. Imagine if the Tiger Woods scandal broke today? Would weeks and months of indecision be tolerated? Or how about if Twitter was around when Kobe Bryant was facing sexual assault charges? Brands need to balance the public venting online with their own stance.

"The best brands will take it into consideration, but I'd say 10% to 15% of your decision-making criteria should be from social media and overall public opinion," says Delzell. "Obviously if your consumers are angry about it, it's something to consider, but there are millions of people who all have an opinion. It's your brand, your reputation, you have equity in this person and relationship, so how much does this incident affect that? Consumers obviously have a voice but they can't overwhelm the internal barometer within the brand."

Nike has been called out for its swift suspension of Sharapova, considering its reputation for remaining loyal or delaying its reaction under similar or more questionable circumstances, such as sprinter Justin Gatlin's doping bans for medication, or the situations involving Michael Vick, Lance Armstrong, and Oscar Pistorius.

Photo: Flickr user Yann Caradec

There's also a difference when it comes to the types of brands. In Sharapova's case, a doping charge and potential playing suspension would most affect her on-court and athletic performance endorsements, while lifestyle sponsorships like Tag, Porsche, Evian and others are more based on image and beauty, so may be less impacted. Just look at Woods, while he would never score a cereal ad, he still represents the swoosh based on his playing reputation.

As for how athletes should respond to incidents of wrongdoing, Delzell says Sharapova is on the right track. There's a three-part basic road map to weather a scandal's storm as a pro athlete. "Maria has taken the right first step which is immediate public apology with a genuine delivery," says Delzell. "Tiger Woods didn't come out until months after all the allegations and everything else, and when he did do it, he read off a teleprompter. But Maria was pretty honest about it, and did a nice job. Step two is to shut your mouth. After the apology you go and don't say anything, lay low, and let it fade a bit. That's what Kobe Bryant did. And third, you win. People forget pretty easily once you start winning again. In Maria's case, she won't have a chance to win if she's suspended. But if I was her I'd stay out of the public light as much as possible, you know there will be another celebrity scandal that will take the spotlight off of you."

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