Recently the German sportswear giant, Adidas, announced they were leaving four years early from their sponsorship deal with the IAAF (International Association of Athletics Federation). The decision appears to have been prompted by the current scandal and a recent report by the World Anti-doping Agency claiming “corruption was embedded” in the IAAF. This isn’t the first crisis to impact on the world of sport: tennis is reacting to accusations of match fixing, cycling has suffered from doping confessions, and football has ongoing issues with corruption inside FIFA.
So is it time brands reconsider their relationship with sport?
By its very nature any type of sponsorship or endorsement deal carries a degree of uncertainty and can sometimes backfire. Take the case of using celebrities as a shortcut to acquiring desirable personality traits and reputation by association. If you want customers to believe that your brand is ‘cool’ and ‘funky’, then find a celebrity who already embodies those qualities, but bear in mind that the association can turn into a negative if the celebrity gets embroiled in controversy. Churchill the car insurer dropped actor Martin Clunes after he received a driving ban and both Chanel and Burberry axed Kate Moss over allegations of drug-taking. When confronting a marketing disaster such as this, the unwritten rule amongst experienced sponsors has been – keep your nerve, ride it out, and it will soon pass. By disengaging quickly when things go wrong, brands can emerge unscathed but lose the commercial advantages which would normally take years of painstaking brand-building to achieve.
Sponsorship of sports events and organisations takes the strategy into a different league. Rather than influencing how consumers see your brand, it is about accessing the gateway to global markets, worldwide exposure and a direct route to increased sales. The stakes are higher and generally the budgets are bigger. Adidas was spending £5.6 million a year with the IAAF, is currently spending £75 million a year on Manchester United kit and is estimated to be committed to £60 million with FIFA every four years until 2030. Here the rewards for global sponsorship are immense and the temptation is to always ride out the crises, especially when a competitor may be eager to take your place.
However, unlike other areas, the world of sport stands or falls on the concept of fair play. Consumers might have differing views about the relevance of Clune’s driving ban, but being a self-confessed cheat, such as Lance Armstrong, has clear ethical implications. In the light of this, it is intriguing that Adidas has made the decision to reject the IAAF while continuing its deal with FIFA.
There has always been arch rivalry between Adidas and Nike with the two brands slugging it out to gain competitive advantage at every opportunity. Nike has a wonderful track record of ambushing Adidas-sponsored events and often steals the limelight with innovative marketing campaigns. It could be argued that concerns about being tainted with the current scandal were tempered with annoyance that Nike appears to have been unduly favoured by the IAAF. Nike Ambassador, Lord Coe, was appointed as IAAF president and Nike’s hometown Eugene was recently awarded the 2021 World Championships. Withdrawing sponsorship could be seen as a way for Adidas to express its feelings on the matter.
Clearly, the IAAF sponsorship deal is worth a fraction of FIFA’s and it is easier to walk away but is there more to it – is this the hint of a possible sea change when it comes to sports sponsorship? Adidas has already established a strong anti-doping position, in contrast to rival Nike which sponsors Justin Gatlin and other high profile athletes who have had doping bans. It has also been noted in the media that the IAAF scandal has more serious implications because unlike FIFA, its tentacles extend beyond bribery and corruption amongst officials and onto the ‘playing field’. The IAAF is accused of covering up doping and thereby turning cheating from isolated aberrations to a systemic failure undermining the integrity of sport itself.
Rights holders need to value sponsorship partners and understand the growing commercial and ethical pressures under which they live. In the future, brands will be asking themselves whether they can successfully keep their distance from these woeful tales of corruption or if in the long run they are better off spending their money elsewhere. It may appear an unlikely scenario but if sponsors do start to lose faith on a big scale it could end up being the impetus for sport to finally clean up its act – and then we all will be winners.