Player Power – Athlete Success Impacts on Brand Fortunes 4th September, 2015

Player power is well documented across sports business with demands on endorsement deals, publicity requests and the ability to influence the many across the globe. However rarely has a player’s performance vindicated the price of company stock.

As Serena Williams appears in New York this week with sights set firmly on the US Open & ‘Serena Slam’ (winning all four majors in the calendar year) there will likely be comparisons drawn with Jordan Spieth’s attempts to achieve the same feat in the world of golf this year.

Following an examination of Spieth’s miss on the final hole at the British Open, ultimately ending hopes of the calendar Grand Slam the finance department of Serena’s sponsor Nike might be a little more focused on her success this week than the previous wins.

Recently Under Armour became the principal sponsor of the young athlete, signing a multi-million 10 year deal (read more on a previous Slingshot blog here). Following this Spieth promptly returned faith securing the Masters and US Open titles with Under Armour equipment pride of place.

Next the British Open loomed with hype surrounding Spieth’s opportunity to complete the impossible and collect a third major of the year. Jordan Spieth was in contention until the final hole where a birdie was required to keep the challenge alive for a play-off.

This is where the parallels with Serena might interest Nike’s finance department and shareholders.

As following the missed putt by their star ambassador, Under Armour’s share price dropped falling from a price of $89.46 before the putt to $88.79 minutes afterwards – decreasing the company’s value by almost £90 million.

Whilst the exact nature of this depreciation is unknown, this occurred within the 6 minutes between the putt and missing of the play-off. Sport marketing professionals have cast views on the occurrence with Nigel Currie believing the “share price to have grown due to the accumulation of previous successes and the expectation on further success”, with the drop merely showing a return to a normal level.

Whatever the explanation, Nike shareholders will be wishing Serena success at Flushing Meadows just a few percent more.

 


“Enter At Your Own Peril” : Sponsor Association With Controversial Brand Ambassadors 23rd September, 2013

 

“The role of a brand ambassador – the brand ambassador is a marketing model that employs trusted, credible personalities to promote and give greater visibility to its brand products

It seems, historically, that sport and scandal have gone hand-in-hand. Over the past five years there have been multiple athletes in the upper echelons of their respected fields that have been subject to a public fall from grace. For the sponsor, the usual protocol will be to run for the hills, and withdraw any association with the respected star. However, there are some exceptions, and brands do, in some cases, stick by or re-invest in their asset – but under what circumstance and why?

Level Of Association

If the player is either an integral part of the sponsors make up, or headline star, then it makes the job of getting rid of them, and keeping to your marketing strategy a lot harder. Woods, of course, has been embezzled with the swoosh his entire career, this can also be said of Wayne Rooney. However Ryan Giggs has not been so fortunate, despite being held up as headline moral ambassador for his maturity, the star ended up being shunned by a number of his sponsors for a comparable offense to that of Rooney or Woods.

Bankability

The commercial revenue generated by any ambassador is integral to their credentials, and can play a significant role in the decision making process. In Woods and Rooney’s case, both EA games and Nike had complete product ranges centered on them, and commercially had too much to lose.

Sponsor’s market place

Accenture was Woods’s big loss in the aftermath of the scandal around his affair. The firm could not justify sporting a star whilst marketing themselves as a trusted Business Consultancy. Brands have ambassadors for a multitude of reasons, but they must be able to link their common values and business goals. In contrast, Alex Rodriguez, was still used by Guitar Hero in their adverts even after he admitted to taking banned substances. The business case for this was that Guitar Hero’s product was not affiliated with his sporting attributes, but his public personality.

The Offense

The line with which most brands have consistently taken when suspending contracts, has been when the ambassador’s actions directly affect the relationship they have with the respected brand’s promotional attributes. In the case of Drugs there has been a 100% termination rate in sport. However, in the case of Kate Moss and the fashion industry, the offence was taken very differently. Although she did lose substantial contracts, Moss managed to retain seven, and go on to re-build her career, something which has never been seen on such a scale in sport.

There is no doubt that trust in ambassadors has publically waned, as such, there has been a shift in how brands market their ambassadors. Recent campaigns by brands such as Nike illustrate that the focus is now upon empowering the consumer, rather than showboating the skills of an untouchable star. Even in fashion, couture designers are collaborating with high street fashion chains to bring their products to a consumer level. This shift undoubtedly showcases ambassadors but does much to bring the star or garment to the consumers level, retaining brand loyalty, which is essential in a very fickle market place.

It’s the end product that matters

As the quote above states, ambassadors uphold the values of the product they promote, and being the lucrative tool which they are, brands will do anything to protect them. However no one is bigger than the brand and on a case-by-case basis, the outcome of each offense is dictated by the relationship between the star and the value of the product they endorse.