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Cos. walk a tricky line with endorsements

Cos. walk a tricky line with endorsements

NEW YORK (AP) 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 cyclist 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 with celebrities and athletes to endorse their products. Everything a celebrity endorser says and does could negatively impact the company he or she represents. And when something goes wrong, companies act as the judge and jury when deciding whether to continue those deals. They consider everything from the offense itself to the fallout.

``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 shell out millions of dollars for celebrities to wear their shoes, use their equipment or appear in their commercials.

The practice is even more common in the world of sports, where companies are willing to do almost anything to have their brand associated with the high performance of a top athlete. Think: The endorsement deal between sneaker maker Adidas and soccer player David Beckham or General Mills deal to have Olympic Gold medalist Gabby Douglas appear on a box of Wheaties cereal.

Companies typically add a ``morals clause'' to the deals. The specific language can vary, but the clause basically allows a company to cancel the contract if a celebrity does something that reflects poorly on the brand - or the celebs themselves.

History is dotted with companies dropping celebs after public mishaps. In 1986 the American Beef Industry Council dropped actress Cybil Shepherd as its spokeswoman after she told an interviewer that she tried to avoid red meat in her diet. And in 2007 Verizon severed ties with singer Akon after he drew widespread criticism for a sexually charged dance onstage with a 14-year-old girl during a spring concert in Trinidad.

``It's really hard to know today when an issue will spin out of control or just go away,'' said Adamson, the branding expert. ``The cost of a celebrity endorsement is huge, so pulling the plug is a really big decision.''

Sometimes letting go of a celeb can cause a company more problems. For example, apparel and underwear company Hanesbrands dropped Pittsburgh 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 now is suing the company and seeking $1 million for breach of contract, claiming Hanesbrands wrongly terminated him. The case is still being heard in the U.S. District Court in North Carolina.

Perhaps no other company is better known than Nike for its history of having to decide the marketing fate of its celebrity endorsers. The company with the popular ``Just Do It'' slogan has been endorsing athletes for most of its 48-year history.

When Nike was founded in 1964, it first got attention by providing shoes to runners. Its first official endorsement was the late-runner Steve Prefontaine in the early 1970s. Nike's most high profile endorsement came in the 1980s when it inked a deal with former professional basketball player Michael Jordan. The deal is widely seen as one of the most successful endorsements of all time.

Nike, which is based in Beaverton, Ore., now spends millions each year on endorsements. Of the $7.4 billion it spent on advertising, promotions and endorsements in the fiscal year that ended in May, 11 percent or $800 million, was for endorsements. That included its sponsorship of activities such as college and professional sports teams.

As a result of its large investment in endorsements, Nike has had to make some tough decisions over the years. It stood by Woods after the golfer admitted to a string of infidelities and had a brief stint in a rehab treatment facility for sex addiction. Nike even made a TV commercial that alluded to his problems, with Wood's deceased father's voice saying: ``Did you learn anything?''

Similarly it stuck by the Los Angeles Lakers player Bryant in 2003 after he was arrested on sexual assault charges that were later dropped. Nike, however, didn't use the basketball player in advertising again until 2005.

In the case of Vick, Nike signed the NFL quarterback to a contract during his rookie year in 2001, but ended that pact in August 2007 after he filed a plea agreement admitting his involvement in a dogfighting ring. Then the company re-signed Vick, who now plays with the Philadelphia Eagles, in July 2011. Nike said at that time that it didn't condone Vick's actions, but was supportive of the positive changes he had made to better himself off the field.

In the latest incident, Nike on Wednesday said that it would end its relationship with Armstrong, a week after the U.S. Anti-Doping Agency released a massive report that detailed allegations of widespread doping by Armstrong and his teams when he won the Tour de France seven consecutive times from 1999 to 2005.

The move by Nike followed Armstrong's decision earlier on Wednesday to step down as chairman of the Livestrong cancer-fighting organization he founded. Armstrong, a 41-year-old who earlier in his career had overcome life-threatening testicular cancer, retired from cycling a year ago and announced in August that he would no longer fight the doping allegations that have dogged him for years.

Other companies quickly followed Nike. The beer company Anheuser-Busch, health-club operator 24 Hour Fitness, bike manufacturer Trek Bicycle and athletic products maker Honey Stinger all dropped Armstrong. Meanwhile, Oakley, a sunglass maker, said it would withhold judgment until the International Cycling Union decides whether to challenge the USADA's findings.

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 present and future endorsement deals, goodwill ambassador relationships and corporate speaking gigs.

Nike declined to comment on its endorsement deal with Armstrong or why it ended the relationship other than to say in a statement it released on Wednesday that it made its decision based on ``seemingly insurmountable evidence that Lance Armstrong participated in doping and misled Nike for more than a decade.''

Marketing experts said the likely reason Nike dropped Armstrong boils down to the fact that the cyclist's alleged actions directly related to his sport.

``Nike is about `just doing it' and that doesn't mean drugs,'' said Atlanta-based marketing consultant Laura Ries. ``It means hard work and ethics. And this flew in the face of it.''

Old Dominion at Syracuse Basketball: Date, Time, TV Channel, Live Stream, How to Watch

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USA Today Sports

Old Dominion at Syracuse Basketball: Date, Time, TV Channel, Live Stream, How to Watch

Following a thrilling 72-71 win over rival Georgetown, Syracuse (7-2) returns to the floor on Dec. 15 and welcomes Old Dominion (7-3) to town. The Orange will play four more non-conference games before starting ACC play on Jan. 5 at Notre Dame.

Old Dominion has won five-straight games entering their game against Syracuse. In the Monarchs' last game, B.J. Stith led the way with 28 points and a career-high 14 rebounds. 

Tip-off is scheduled for noon ET and will be broadcast on NBC Sports Washington.

Old Dominion at Syracuse How to Watch

What: Old Dominion Monarchs at Syracuse Orange
Where: Carrier Dome, Syracuse, N.Y.
When: Noon ET
TV Channel: NBC Sports Washington (Channel Finder)

Old Dominion at Syracuse Preview

Conference: ACC (Syracuse), C-USA (Old Dominion)
Record: 7-2 (Syracuse), 7-3 (Old Dominion)
Last Game: 72-71 win vs. Georgetown, 12/8 (Syracuse), 79-69 win vs. Fairfield, 12/9 (Old Dominion)
Leading Scorers: Tyus Battle, 18.0 ppg (Syracuse), Ahmad Caver, 18.5 ppg (Old Dominion)
 

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Drew Gooden describes playing with LeBron James: It was 'like a traveling rock band'

Drew Gooden describes playing with LeBron James: It was 'like a traveling rock band'

LeBron James and the media circus that comes along with him is coming to Washington, D.C., as the Lakers will face off with the Wizards at Capital One Arena.

Drew Gooden played with James for the better part of four seasons in Cleveland from 2004-08, and so he knows exactly what it's like when one of the NBA's greatest players comes to town. 

"It's only real until you actually see it," Gooden said during Thursday's edition of the Wizards Talk podcast. "We used to joke and call ourselves not the Beatles, but the 'Cleatles,' because it was almost like a traveling rock band. And everybody played their part."

Gooden recounted one particular incident during a day off in Detroit in 2006, when he, James and a couple of their teammates went to a shopping mall to buy some watches.

"When we walked into the shopping mall in Detroit, it was like Michael Jackson had entered the shopping mall," Gooden explained. "Kids were running up, grownups were running up, everybody ran into the store we were in. They had to shut it down with mall security, and wouldn't let anybody in."

"The only thing I was thinking of is like, 'How are we gonna get out of here?' Because we came on our own with no security, so we were just thinking of how we were gonna get out of the mall now. And when I saw that star power of LeBron James back in 2006, this was before he won a championship, I couldn't imagine how it is now, and what he's become in today's game."

James' star power has only grown since then, and many have already declared him the greatest basketball player of all-time.

This label in reference to James is nothing new to Drew Gooden: he heard it when they were both teenagers playing AAU baskeball. 

"Calvin Andrews, who was a sports agent of Carmelo Anthony, Calvin Andrews told me when LeBron was 15 years of age, he said, 'You see that guy right there?'" Gooden recalled. "I said, 'Yeah, what about him?'"

"'He's gonna be the best basketball player ever.'"

"So it's no surprise to me, and this is not new to me, it's just I'm more amazed that it actually happened," Gooden concluded. "A lot of people say, 'Oh, he's gonna be the best ever or he has an opportunity of being the best ever.' But I literally heard a man tell me that in Calvin Andrews, and that guy actually becoming one of the best ever, or the best ever." 

For more on LeBron James and the Lakers' upcoming visit to D.C. to take on the Wizards, listen to the full Wizards Talk podcast below.

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