Change in Athlete Endorsements

If you're an athlete at the top of your sport endorsements are a given, over time athletes have been used to endorse all sorts of products - everything from running shoes to credit cards. Following recent events with various athletes including Lance Armstrong, Tiger Woods and Oscar Pistorius questions have been asked regarding the risk/value to brands.

Athlete endorsements are certainly not a new run thing, Honus Wagner (baseball hall of fame) is cited as the first ever athlete endorsement deal in 1905, his deal with Hillerich & Bradsby Co. called for them to supply Wagner with bats to his specifications - a deal most manufacturers would snap your hand off for these days, when you consider that David Beckham receives around £28m in endorsements per annum (that's a lot of boxer shorts). Here are the 5 biggest athlete endorsements as of now:

- Tiger Woods, Nike - £68m
- George Foreman, The George Foreman Grill - £90m
- David Beckham, Multiple including Adidas - £105m
- Rory McIlroy, Nike - £165m
- Derrick Rose, Adidas - £171m

These deals have varying contract lengths, Rory McIlroy's deal with Nike spans ten years.

Endorsements aren't rocket science, in essence an athlete is paid to represent a brand. In return for payment athletes may take part in commercials or product launches, they may put their name to a product range I.e. Jordan basketball shoes. Probably goes without saying but the athletes also use/wear the products themselves. Brands may select athletes for a variety of reasons, but ultimately brands like Nike or Adidas gain from creating the impression that their products play a role in the success of the athlete.

As I mentioned previously the times when athlete endorsements go wrong are well documented. Lance Armstrong was dropped by Nike amongst other brands following the doping scandal spanning at least nine years, Armstrong was stripped of his seven Tour de France titles. Tiger Woods adultery on a huge scale saw him dropped by many brands, however Nike decided against dropping the golf star. Most recently Oscar Pistorius was dropped by Nike, of course when the loss of someones life is involved this put things into perspective.

Having done some research around this topic I began to wonder just how damaging actually is this for brands. There were plenty of so called 'endorsements gone wrong' that I couldn't even remember, see if you can:

- O.J Simpson, Hertz Cars 1992 - Dropped for domestic abuse.
- John Terry, Umbro 2012 - Dropped for racist allegations.
- Michael Phelps, Kellogg's 2009 - Dropped for smoking cannabis.
- Kobe Bryant, Nutella & McDonald's 2003/04 - Dropped for sexual assault allegations.
- Marion Jones, Nike early 2000's - Dropped for use of performance enhancing drugs.

The list could go on, but my point is that sports fans have short term memories and ultimately the negative effect on the brand is short lived - this can be seen by the brands used in these examples, it's not like they have a tainted image after dropping each of these athletes.

In the future I think we will see a shift in how athlete endorsements are run, with a less risk strategy being implemented. A clever, yet simple way to do this is to spread the risk across more than one athlete. For example Gillette used Tiger Woods, Roger Federer and Thierry Henry to great effect in their commercials - perhaps they are ahead of their time?

JL