Sponsorship programs can backfire, so the golden rule is to be ready for anything. What if the athlete or team we sponsor is caught using performance-enhancing drugs? What if in the middle of a game or a race the behavior of your team is disgraceful? Or if your team bribes the referee and is caught in a scandal and disqualified? These are all real scenarios, and the sponsors run the risk to pay for something that they weren’t aware of and that is out of their control.
These episodes not only damage the image of the team and of the sport but unavoidably mirror on their sponsors. (And this is particularly true if you are the title partner).
We know that the values of the sport and the team stick/sediment on the sponsoring brand within a certain period of time and this applies both for the good and for the ugly.
Even if you have had a positive journey so far, from the moment disaster hits even the good work done previously is put in jeopardy…so the trusting relationship between the company and its customers is at stake.
What is the best way to handle such a situation?
That’s a very difficult question. In the past, we saw different approaches taken by different companies or even different reactions from the same one.
From Mapei leaving cycling to Nike running away from Armstrong, but somehow sticking to Sharapova. To the recent Australia’s ball-tampering cricket scandal that led to a quick escape of sponsors of both the international team and individual players. Among them, the Magellan Financial Group that ended a deal said to be worth around €14Mil. And to name some controversial situations in different sports we cannot forget the recent six months ban of Canelo Alvarez, or Chris Froome’s struggle to clear his name before the season of the great classic road races starts with the Giro d’Italia.
Obviously, every and each situation is different, but are you sure that the public will look into it so deeply to make a distinction? Or is it always better to just quit? Maybe the public will not appreciate a financial institution or their bank being associated with someone who cheats while managing their money!
So, must a company decide what to do on the basis of the seriousness of the infraction? Or should it wait until there is a final sentence of condemnation of the athlete/team?
That is not for me to say
Companies must have a contingency plan to manage these adversities, and decisions must be made before the disaster even occurs (hoping that these procedures will not be used, but being ready for it if anything goes wrong)
A plan that can go either way… Sticking with the team/athlete or Leaving it. It will be on the sensitivity of the people in charge for the external communication to decide what to do.
The thing you do not want is to be taken off guard and not being able to respond to the unavoidable calls you will receive from the press.
The bottom line here is that any contract you sign must contain clauses to protect the company. So not only marketing rights, brand exposure, athlete appearances and days with the customers, but different penalties on different levels, to cover the potential damages that the association with a badly-behaved sport property can cause.