There is no doubt that global sports stars carry significant weight when it comes to which products they do and don’t engage with or endorse. Some of the image rights deals, which include brand endorsements, are often worth more than their contractual relationships to play the sports. But what happens if a player’s actions damage a brand?
There have been plenty of stories over the years of sports stars behaving badly and bringing not only themselves, but their employers and their sponsors into disrepute. The damage to a brand’s value by being associated with such instances of bad behaviour can be immediate and tarnish their reputation for significant periods of time afterwards. Likewise, there are instances of seemingly normal actions that have negative consequences for rights holders.
The problem can quickly spread if action isn’t taken as we have seen in the last week during the European Football Championships. The commercial partners for the tournament pay huge sums of money to be associated with the governing body, UEFA, but also with the players in the tournament. Whilst there will be exclusive “assets” that they get, such as VIP tickets and hospitality, the main benefit the commercial partners get is that through brand exposure to a global audience of hundreds of millions football fans. Gone are the days when relatively local brands, or even regional ones would be the main sponsors – one look at the commercial partners for Euro2020 reveals Qatar Airways, Alipay, Antchain and Gazprom – not necessarily household names across Europe or suppliers of products and services that would be targeted at the tournament team supporters. But the traditional global brands such as Coca-Cola and Heineken are there too, as they are for most major tournaments.
However, Cristiano Ronaldo and Paul Pogba, undoubtedly two of the biggest (and most expensive based on transfer fees paid) stars of the tournament have inadvertently caused a bit of a sponsorship debate about who holds the power. After Portugal’s victory against Hungary last week, Ronaldo appeared at the press conference and immediately removed the bottle of Coca-Cola from in front of the microphone and replaced them with a bottle of water. Pogba, in a similar move, removed the bottle of Heineken. Whilst their motives may have been genuine (Ronaldo is a health and fitness machine, Pogba a devote muslim), the consequences of their actions resulted in brand damage for Coca-Cola and Heineken respectively, with the former seeing a drop in their share price that reduced the value of the company by over £2 billion. It is very hard to pin that single action to the market valuation as other factors contribute to share price movements but there will have been some impact. On the flip side, a number of other players, seeing an opportunity have moved the bottles into more prominent positions during their interviews, perhaps trying to encourage the sponsors to endorse them.
There have been other high profile guerilla-style brand issues in football through the years – back in the 1974 World Cup, with adidas sponsoring the Netherlands team, their star player Johann Cruyff was endorsed by bitter rivals Puma. Rather than face punitive measures by wearing Puma, Cruyff removed one of the adidas three stripes from his kit and boots, something that only the untrained eye would have seen at the time. In 2013 adidas, who sponsor and have an investment in Bayern Munich, were left fuming after the Bavarian side presented new signing Mario Gotze to the world at a press conference. No issues with that, except Gotze turned up wearing a t-shirt emblazoned with the Nike swoosh on. Nobody from Bayern Munich thought that may not be a good idea before allowing him to enter stage left.
The actions this week may get brands thinking about who does hold the power in terms of the sponsorship deal and will no doubt set off a trend that without management could damage the brand value and reputation of some commercial partners.
More words of the dilemma faced by brand holders in the world of sports sponsorship can be read here from Trademark Review.