From Ben Roethlisberger to Tiger Woods: Why Nike Didn't Flee

Why a company keeps or cuts an athlete endorser depends on marketing strategy.

April 14, 2010, 4:03 PM

April 15, 2010 — -- One disgraced sports star. Two corporate sponsors. Two rather different reactions.

Days after Tiger Woods' much-dissected Nike commercial hit the airwaves, the scandals tainting NFL star Ben Roethlisberger have shined another spotlight on the inconsistent nature of the sports endorsement business.

Roethlisberger this week lost his contract with food marketing company PLB Sports but retained the support of Nike. In recent months, Woods' own scandals cost him several big-name sponsorships but he managed to hang on to deals with Nike, EA Sports and Upper Deck.

Sports and marketing experts say that, sometimes, the difference between keeping and losing a sponsorship depends less on an athlete's behavior than on a corporation's marketing strategy. In the sporting goods industry, athletic achievements can overshadow off-the-field adversity.

"The standard by which the industry judges an athlete has much more to do with their performance than their personal qualities," said Matt Powell, an analyst with research firm Sports One Source.

Nike, for instance, has a history of sticking by superstar athletes despite unseemly headlines -- in addition to golf champion Woods and two-time Super Bowl winner Roethlisberger, Nike maintained its relationship with Los Angeles Lakers guard Kobe Bryant after a rape allegation surfaced against the NBA star in 2003. (The case was later dropped.)

Standing by a disgraced athlete is a gamble, but "Nike has the ability to have a long-term investment in these athletes -- they can wait out the storm, stomach the volatility," said Boyce Watkins, a faculty affiliate at the College Sport Research Institute at the University of North Carolina at Chapel Hill. "They felt that these guys were eventually going to get back to the top and they were ultimately correct."

Sports One Source studied Nike golf products and found that in the 13 weeks before Woods' scandal broke and in the 13 weeks after, sales remained constant, Powell said.

"It's pretty clear that Tiger's problems have not had an impact on Nike's business in retail," Powell said.

In recent years, it seems, only Michael Vick's behavior has proven offensive enough to warrant a deal-breaker with Nike. In 2007, Nike ended its contract with the then-Atlanta Falcons quarterback after he pleaded guilty to felony charges for running a dogfighting ring.

"(W)e consider any cruelty to animals inhumane, abhorrent and unacceptable," the company said in 2007.

Selling Character, Finding Trouble

When a corporation looks to a sports star for traits beyond athletic prowess, that's when endorsement deals become more vulnerable to off-the-field transgressions, experts say.

Take Woods' relationship with the consulting firm Accenture: When Woods represented Accenture, the firm emphasized the then-untarnished family man's integrity, Watkins said. But Accenture was among the sponsors to later drop Woods after he revealed affairs with multiple women, announcing last December that Woods was "no longer the right representative for its advertising."

PLB Sports owner Ty Ballous said that questions of character were key to his decision to end PLB's contract with Roethlisberger, who was the name and face of PLB's Big Ben Beef Jerky.

Unlike Woods, Roethlisberger has been accused of actual crimes in the form of two sexual assault allegations in the last two years. Roethlisberger has denied both allegations and no criminal charges have been filed in either case.

The Georgia district attorney handling the more recent allegation said Monday that while he didn't have sufficient evidence to prosecute the football player, he was critical of Roethlisberger's behavior on the night of the alleged assault, declaring that there "was too much drinking going on" and calling on Roethlisberger to "grow up."

Ballous said Wednesday that "there were too many negative things associated with Ben and the brand that would have a negative connotation not only in the brand that we have with Ben but with PLB Sports."

Ballous said sales of the jerky have seen "diminished returns" in the last 12 to 18 months -- something he attributed to Roethlisberger's off-the-field behavior.

Customers buy PLB brands associated with star athletes, he added, "because the player is someone they hold to a very high standard. ... Character is an immense issue."

The Gatorade Exception

What may be especially damaging to PLB's jerky sales, said advertising columnist and Graham Stanley Advertising CEO Larry Woodard, is how the company's target demographic is reacting to the Roethlisberger controversy.

It's often mothers, Woodard said, who buy snack foods like beef jerky for their kids. Roethlisberger, he said, has "transgressed in an area that they (mothers) cannot get behind."

A company's emphasis on athletic performance or character traits, however, may not always be a surefire predictor of how it will respond to a sports star's personal foibles. Sports drink maker Gatorade cut ties with Woods despite the fact that its brand revolves almost entirely around marketing claims that its products aid athletes' performance.

"It's very difficult to come up with a simple rule that all companies follow," Watkins said. "Every company has different criteria for what constitutes them getting rid of you."

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