A sports endorsement deal is whereby a company makes an agreement with an athlete for marketing purposes. The sports personality is usually at the peak of his or her career and rides on a huge wave of success. This situation makes the individual very famous; and as such, any brand that markets itself using the athlete's name is sure to sell its products. The athlete, on the other hand, is supposed to show support for that particular product or brand. In return, he or she gets compensation. A good example is Michael Jordan who endorsed the Nike Air Jordan franchise.
However, of late there has been a trend whereby we are witnessing a reduction of sports endorsement deals. A recent research found that in 2009 spending on endorsements shrank by over 100 million USD (McCarthy, 2014). There have been many speculations, but a deeper analysis of the situation brings out some of the major issues. In the recent past, the sporting world has witnessed violence and abuse perpetrated by respected athletes. Examples are Ray Rice, an FL star who was charged with assault and domestic abuse. Adrian Peterson, a running back of the Minnesota Vikings was also charged with careless child injury. When such occurrences take place, they tarnish the image of the endorsed brand (McCarthy, 2014).
Tiger Woods, the world’s best golfer of his time got caught up in an infidelity scandal in 2010. Then, he had signed an endorsement deal worth millions of dollars with Nike. In addition to that, Woods was the cover star of the golf simulation game by EA Sports “PGA Tour”. The company stopped his deal shortly after. Doping has also been a major factor that has contributed to the reduction of sports endorsement deals. Another factor, though not very significant, is the disconnect between athletes and the products they endorse. A good example is in 2008 where Microsoft had to revoke a deal with LeBron James. James was a sportsman; he had no knowledge of coding or programming.
For the above reasons, Chief Marketing Officers have become cautious about endorsement deals. They feel terrified that those they endorse might take actions that throw the brand name into jeopardy. They want to protect their brands for the sake of their profits. Furthermore, they also want to avoid lengthy scandals with players and athletes. Therefore, most companies are now resorting to short term deals and other safer forms of advertisement (Russell, Mahar & Drewniak, 2005).
References
McCarthy, M. (2014, November 18). Athletes Are Getting Fewer Major Endorsement Deals | Adweek. Retrieved from http://www.adweek.com/news/advertising-branding/incredible-shrinking-athlete-endorsement-deal-161497
Russell, M., Mahar, J., & Drewniak, B. (2005). Examination of Stock Market Response To Publicity Surrounding Athletic Endorsers. Marketing Management Journal, 15(2).
