Running head: ENDORSEMENT DILEMMA !

The Endorsement Dilemma: How does scandal affect the marketability of athlete endorsers?

Eric P. Butcher

University of Southern Mississippi

HPR 676, Summer 2012

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Introduction

As American society has evolved, the "filters" that once kept people fairly shielded from words

and images considered inappropriate have eroded. Major networks continue to push the envelope

with increasing levels of sex, violence, and inappropriate language. Shows like TMZ give

viewers first-hand accounts of the triumphs and follies of countless celebrities. Reports of

wrongdoing by celebrity athletes can have a negative effect on their status in society -- as well as

their ability to serve as effective endorsers for marketing purposes. However, with a population

becoming increasingly desensitized, athletes often return (sometimes quickly) to their prior status

after an incident makes the news. The question of how much a scandal can affect a celebrity

athlete's marketability may depend on the athlete in question and the nature of the scandal itself.

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Review of Literature

A USA Today article ("As Idols Fall, Will Clout Ebb," 2010) characterized changes in the

perception of celebrity athletes following a scandal:

Mentions of having the "eye of the tiger" generate snickers about Tiger Woods' adultery

scandal. Mark McGwire's confession that he took steroids has shrunk the awe once held

for his soaring home runs. Michael Vick's dogfighting crimes sickened a nation that

suddenly was confronted with the gruesome aspects of an underground blood sport. In a

2010 USA TODAY/Gallup poll, 47 percent of adults said they considered Woods less of a

role model after news of his extramarital affairs broke. However, nearly 66 percent say

athletes will have more influence on young people in the decade to come.

There's no denying the powerful influence celebrity athletes have on younger generations.

But should be they be expected to live perfect lives and have no flaws? Some feel that expecting

such "perfection" from anyone, including celebrity athletes, is a mistake.

"The athletes are going to get their DUIs and have their problems, just like politicians and

just like actors," said Scott Minto, director of the Sports Business MBA program at San Diego

State University. "That will always be there. It's just a matter of taking the lumps and not

lionizing them and thinking they are without flaws." ("As Idols Fall, Will Clout Ebb," 2010).

Fearing the worst, some companies will quickly pull endorsements after a scandal erupts.

In other (less common) cases, companies will pledge support for the athlete and continue to

honor the commitments they've made to them. "The public's patience with athletes now is fairly
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low, and companies are weary of dealing with athletes who have problems," says Jonathan

Wexler, an executive at Playing Field Promotions in Denver. "Athletes have to act like good

citizens, or they're not going to get these deals" ("Controversies Make Marketers Gun-Shy,"

2004).

Alini (2010) discussed Nike's decision to keep Tiger Woods as an endorser following his

sex scandal:

Staying loyal to a major endorser even as he or she makes negative headlines may pay

off, according to a paper published by Carnegie Mellon University's Tepper School of

Business. Nike's decision to stick with Tiger Woods, despite his sex scandal, led to a

profit of $1.6 million in golf ball sales, the research found. By contrast, the sports-gear

giant would have lost as much as $22 million by ditching the golfer like other big

companies, such as Gatorade, AT&T and Accenture did.

According to Forbes magazine, Woods became the first billion-dollar athlete in 2009 --

having earned more than $1 billion in winnings, endorsements, appearance fees and other

earnings since turning pro in 1996. At the height of his popularity, Woods had major

endorsement deals with Gatorade, AT&T, Nike, Gillette, Accenture, EA Sports, Upper Deck and

Tag Heuer ("Gatorade Says Decision Was Planned," 2009). Some of those deals, including those

with Nike and EA Sports, continue today.

Other companies, such as Accenture, decided to drop Woods as an endorser soon after the

news broke. "More than any other company, Accenture used its advertising campaign to tie its

own values to Woods, including the slogan: "Go on. Be a Tiger." While these values were always
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related to his golfing prowess tenacity, strength, innovation Woods's precipitous and tawdry

fall from grace made it impossible for Accenture to keep him as essentially the face of the

company" (Sappenfield, 2009).

Today, Woods' face still adorns the cover of EA Sports' flagship golf video game, and he

remains the face of Nike Golf throughout the world. His success or failure in tournament play is

still breaking news in the sporting world. While there's no doubt the scandal affected him

personally and professionally, the argument can be made that Woods weathered the storm fairly

well -- his status as a premier endorser seemingly intact.

When examining the reasons for this revival of sorts, it may be as simple as a look in the

mirror. Gabler (2009) suggests today's celebrity is "a celebrity only so long as he or she is living

out an interesting narrative, or at least one the media find interesting. Indeed, even non-

entertainers or people not ordinarily in the public eye can be grazed by the celebrity spotlight if

they live a compelling-enough narrative, which is how a Joey Buttafuoco or a Nadya Suleman or

even one of Tiger's mistresses receives celebrity treatment." While Woods had become an almost

larger-than-life persona prior to the scandal, society's insatiable appetite for the scandal itself

kept the media focused on him constantly despite his decision to take a break from playing golf.

According to Carroll (2010), "One of the reasons for the level of public interest in elite

sport is that it provides a screen on which to observe the reaction of human character to extreme

pressure, and in particular how it responds to set-back and failure." In many ways, the very

things that attract people to sport are identical to the things that make TMZ and reality television

so appealing. The drama. The triumph and tragedy. The focus on human reaction. The pressure.
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Thus, it should come as no surprise that a celebrity athlete like Woods can rebound after a

scandal and return to elite status.

But Woods is far from being the only celebrity athlete to find himself entrenched in a

scandal -- nor is the issue of scandal in sport a new phenomenon. Changes in the nature of

journalism itself, coupled with advances in technology, have made the reporting of such scandals

quicker and easier than ever. Anyone armed with a cell phone, who happens to be in the right

place at the right time, can find themselves reporting a scandal involving a celebrity athlete at a

moment's notice.

"The use of sports people as role models and heroes, especially within marketing,

allows for easy critique of any behaviour that does not live up to an idealised image" (Connor &

Mazanov, 2010). Failure to maintain this ideal can be magnified when dealing with a well-known

sport figure, although in many cases it can be attributed to simply being "human."

According to Connor and Mazanov (2010), scandal is "not an aberrant event," but a

"predictable, foreseeable and unavoidable outcome of sport today." Expecting anyone, including

a celebrity athlete, to avoid making mistakes is an exercise in futility. The more effective strategy

-- for individual athletes, teams, leagues, and even the businesses who seek celebrity athlete

endorsements -- is to understand the inevitability of scandal and have contingency plans in place

to deal with it.

For example, the National Football League has significantly revised its standards for

player conduct in recent years to accommodate an increasing number of incidents involving

misbehavior of NFL players. Players such as Michael Vick and Plaxico Burress have served jail
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time for their off-the-field behavior, served suspensions of varying lengths, and returned to the

playing field. Vick, in particular, has returned to the elite status he enjoyed prior to his animal

cruelty scandal.

The reason for the resurgence of Woods and Vick may be simple; according to York

(2009), viewers and fans have a short memory when athletes are performing well. Kobe Bryant,

whose alleged sexual assault scandal dominated headlines in 2003, continues to maintain his

status as one of the premier players in the NBA. And much like Woods, lost a couple of major

endorsement deals, but maintained others.

Often considered to be the "Tiger Woods" of swimming, Michael Phelps reached the

pinnacle of success in his sport after winning a record number of gold medals at the 2008

Olympics in Beijing. Less than a year later, Phelps found himself in the midst of a scandal when

a photo of him smoking marijuana surfaced. Almost immediately, the Kellogg company dropped

Phelps as a sponsor, although other companies, including Subway and Speedo, pledged support

for the swimmer.

Some of the scandals faced by celebrity athletes don't involve criminal or immoral

activity at all. Athletes such as football player Terrell Owens and hockey player Sean Avery often

jeopardize their endorsement opportunities by simply being themselves. Owens is seen by many

as the quintessential "bad teammate," while Avery is famous for making inappropriate comments

about a former girlfriend.

D'Hondt (2009) suggests a role model should also model recovery from errors in

judgment. "If it is true that to err is human, then there must be some legitimacy to the notion that
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to repair those errors is equally human, if not admirable. Michael Phelps public experience with

marijuana is a great opportunity for him to demonstrate recovering his image and his

relationships, both public and private."

For many companies, the benefits of using celebrity athlete endorsements far outweigh

the drawbacks in terms of sheer marketing power. "Being labelled a heroic athlete does, it

seems, have tremendous power for marketers, and provides endorsement clout for the

athlete" (Shuart, 2007).

According to a study by Summers and Morgan (2008), "Celebrities in trouble are high-

interest stories and as news coverage has evolved into a global medium far beyond the archaic

notion of the nightly half-an-hour broadcast, news managers struggle to balance the need to fill

time with the journalistic rules and fact checking of the past." Thus, because the high interest in

celebrity and celebrity athlete scandal is driven by society's passionate interest in them, it's

difficult to determine whether these scandals will result in decreases in the athlete's ability and

opportunity to serve as a product endorser.

"Fans have short memories," said John Mansell, a sports business analyst at Kagan

Research, in a USA Today article (2004). "They're willing to forgive and forget."

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Summary and Conclusions

Because of the predisposition of human beings to make mistakes, scandal among

celebrity athletes is simply inevitable. However, while it may be difficult to prevent, steps can be

taken by individuals, publicists, managers, agents, organizations and leagues to lessen the blow

and soften the lasting effects of the scandal.

Celebrity athletes can be part of a very effective marketing strategy for a company. How

a potential scandal impacts their effectiveness depends on a number of variables -- the athlete's

popularity, the type of product being endorsed, the nature of the company the athlete is

endorsing, and the scandal itself. Because of these, variables, companies are often split when

determining whether to stand by an endorser when a scandal erupts.

For example, when news of the Tiger Woods sex scandal made headlines, Nike almost

immediately pledged support for the golfer, and EA Sports continued to use Woods to promote

its flagship golf video game. Accenture, however, because of the nature of its business, chose to

end its relationship with him.

Today, society's hyper-interest in these scandals, coupled with its ongoing interest in

drama-laden programming such as reality television and TMZ, makes it easier for celebrity

athletes to survive a scandal and return to elite status in their respective sports. It also allows

them to continue to serve as effective endorsers, although their endorsement options may be a

little more limited.

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References

Alini, E. (2010). Friends in low places. Maclean's, 123(50), p. 47.

As idols fall, will clout ebb? (2010, February 26). USA Today, p. 1C.

Carroll, J. (2010). The Tragicomedy of Celebrity. Society, 47(6), p. 489-492. doi: 10.1007/

s12115-010-9366-7

Connor, J. M., & Mazanov, J. (2010). The inevitability of scandal: lessons for sponsors and

administrators. International Journal of Sports Marketing & Sponsorship, 11(3), p.

212-220.

Controversies make marketers gun-shy about athletes. (2004, December 10). USA Today, p. 13C.

d'Hondt, M. R. (2009, February 23). Michael Phelps: A reflection of ourselves?

Alcoholism & Drug Abuse Weekly, p. 5.

Gabler, N. (2009). The Greatest Show on Earth. (Cover story). Newsweek, 154(25), p. 62-67.

Sappenfield, M. (2009, December 13). Why Accenture is the first company to ditch Tiger Woods.

Christian Science Monitor, p. 1.

Shuart, J. (2007). Heroes in sport: assessing celebrity endorser effectiveness. International

Journal of Sports Marketing & Sponsorship, 8(2), p. 126-140.

Sponsor dings Woods. (2009, December 9). USA Today, p. 2C.

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Summers, J., & Johnson Morgan, M. (2008). More than just the media: Considering the role of

public relations in the creation of sporting celebrity and the management of fan

expectations. Public Relations Review, 34(2), p. 176-182.

York, E., & Mullman, J. (2009). PHELPS BRAND TAKES A HIT. Advertising Age, 80(5), 1-24.