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SBD/July 24, 2012/Marketing and Sponsorship
Penn State Penalties: State Farm Drops Sponsorship Of PSU Football Program
Published July 24, 2012
BRANDING PROBLEMS: AD AGE’s Rich Tomaselli wrote the penalties against PSU further damage the school's “previously pristine brand and likely crippling its ability to forge new corporate sponsorships.” The sanctions “all but devastate the football program, the marquee sport that draws virtually all of Penn State's corporate sponsorship dollars.” It has been “difficult to determine the relationship between sponsors and the school at this point.” Pepsi yesterday reiterated a statement it made two weeks ago, saying the company will "continue to honor our longstanding contract as a campus provider." Meanwhile, a GM spokesperson said that its sponsorship of the school is under review. Tomaselli noted PSU “removed the names of its sponsors on the corporate partners page on the school website shortly after the scandal broke in November.” Marketing firm Madison Ave. Sports & Entertainment CEO Ed Horne said, “I would expect current sponsors to be extremely cautious in their activations" (ADAGE.com, 7/23).
LOSING THEIR SHIRTS: The AP’s Begos, Levy & Scolforo note an area that "some analysts say is already hurting" for PSU is apparel sales. Charlotte-based SportsOneSource analyst Matt Powell said that “sales are dropping," from about $80M in '10 to $60M "after the scandal broke last year to possibly" $45M this year (AP, 7/24). ESPN’s Darren Rovell noted it is expected that there is "going to be a mighty fall” in PSU merchandise sales. Rovell: “I expect the licensing royalties to also suffer” ("Outside The Lines," ESPN, 7/23).