SBD/August 27, 2012/Marketing and SponsorshipPrint All
MLS Sporting K.C. on Friday announced that it “will not change its partnership with Livestrong,” a day after founder Lance Armstrong said that he would “no longer fight U.S. Anti-Doping Agency’s allegations that he used performance-enhancing drugs,” according to Tod Palmer of the K.C. STAR. Sporting K.C. named its $200M soccer stadium Livestrong Sporting Park last year “as part of a deal that would donate at least $7.5 million in revenue over six years to the foundation, which Armstrong formed.” Sporting K.C. CEO Robb Heineman in a statement said, “The naming rights partnership between our stadium and Livestrong provides an opportunity to spread health and wellness messages that emphasizes the spirit of cancer survivorship. Livestrong’s focus is the fight against cancer and the support of 28 million people around the world affected by this disease, and we believe strongly in this mission” (K.C. STAR, 8/25).
THE FALLOUT: In Boston, Jessica Van Sack wrote the “shocking downfall of Lance Armstrong has not yet had a measurable effect on his brand” (BOSTON HERALD, 8/25). In N.Y., Richard Sandomir noted Armstrong’s “loyal sponsors are not stripping him of their support.” Anheuser-Busch InBev, for whom Armstrong has starred in Michelob Ultra commercials, said that “nothing would change in its relationship with him, which began in 2009 with a three-year contract.” Energy gel maker Honey Stinger also said that Armstrong’s refusal to fight the doping allegations is "of no consequence.” One reason for Honey Stinger’s “unchanging embrace of Armstrong is that he owns a piece of it, promotes its products, meets with its retailers and helps the company build its brand.” Last week he “ran a marathon sponsored by the company.” Sandomir noted the success of Livestrong “has, for now, shielded sponsors from dropping him.” Univ. of Oregon Warsaw Sports Marketing Center Managing Dir Paul Swangard said, “Whether or not his cycling success was pharmaceutically-engineered, Lance has used his fame for so much good. I think a large segment of consumers still finds that a bigger piece of his brand equity, and it’s why companies will still support him” (N.Y. TIMES, 8/25).
STAND BY YOUR MAN: The WALL STREET JOURNAL’s Suzanne Vranica cited sports marketing experts as saying that despite the “strong sign of support from some of his corporate sponsors," Armstrong may have "trouble luring new endorsement deals.” Harvard Business School professor Stephen Greyser said, "New endorsement deals for Lance Armstrong will not be happening for the foreseeable future, because he is damaged merchandise right now" (WALL STREET JOURNAL, 8/25). AD AGE’s Michael McCarthy wrote USADA’s move has “further damaged his already weakening brand,” but things have to be “pretty far gone before Nike bails on an endorser.” Marketing Evaluations Exec VP Henry Schafer said that Armstrong's “positive Q scores have dropped by two-thirds since he won his last Tour de France in 2005.” His negative Q scores “have more than doubled since then -- and for the first time they outweigh his positive scores.” Schafer said, "He's been in a downward spiral. All these doping allegations are not helping him by any stretch of the imagination. I know he's going to rest his laurels on the LiveStrong organization he founded. But I don't think it will be enough" (ADAGE.com, 8/24). In Portland, Allan Brettman wrote under the header, “Lance Armstrong Spared Nike From The Difficult Choice.” By walking away, Armstrong “may very well have preserved some of his marketing appeal as well as continued donations” to Livestrong. Brettman: “Without doubt, he preserved his relationship with Nike, the biggest sporting goods company in the world” (OREGONLIVE.com, 8/24).
STEEP HILL: In Austin, Harmon & Plohetski wondered if Livestrong -- and "Armstrong's personal brand -- survive the cyclist's public branding as a cheater by the U.S. Anti-Doping Agency?” In the charity world, opinions “vary on whether the Livestrong Foundation's fundraising capabilities will take a hit.” Charity Navigator VP/Marketing & CFO Sandra Miniutti, whose nonprofit “rates charities and gives the Livestrong Foundation its maximum four-star rating,” said, "I think it's going to be a rough road." Charity Watch President Daniel Borochoff, whose national rating organization “also has given high ratings to the foundation,” said, "They have a very steep hill to climb. People feel like they were duped by the heroic story of Lance Armstrong, and credibility for a nonprofit or charity is really vital." Livestrong said that since its founding in ’97, it has “raised close to $500 million to support people affected by cancer.” Livestrong VP/Communications & External Affairs Katherine McLane said that the foundation “had seen a 700 percent increase in the number of gifts -- from 15 to 370 -- between Wednesday and Friday afternoon.” McLane: "It's just been a tremendous outpouring of support, and it's really meant a lot to the staff here at the foundation" (AUSTIN AMERICAN-STATESMAN, 8/26).
THE RESPONSE: Livestrong CEO Doug Ulman on Friday said that “unsolicited donations were up almost 25 times as compared to Thursday.” Ulman said that “$3,200 came in Thursday to the organization's website, which was in the range of what it typically receives.” He said that as of 4:30pm ET on Friday, “$78,000 in donations” had come in. ESPN.com’s Darren Rovell noted Livestrong on Thursday “had 45 people donating through the website.” After the news broke Friday, “411 people felt compelled to donate.” Merchandise sales were “up almost threefold, from $4,000 in gear sold on Thursday to $11,000 sold on Friday” (ESPN.com, 8/25). In N.Y., James Covert noted Livestrong last year had “revenues slip 2.6 percent to $48.6 million.” The decline was “tied to a drop in funds raised at special events -- whose past successes had hinged on appearances by Armstrong.” N.Y.-based PR firm MMW Exec VP/Reputation Management Carreen Winters said, “Having your integrity questioned as an athlete is never a good thing. But he’s taking pressure off the organization, and you could say he’s saving the foundation by sacrificing himself.” Indiana Univ. Center on Philanthropy professor Leslie Lenkowsky said, “For the past couple of years, Livestrong has clearly been distancing itself from Lance Armstrong.” He said that it is “practically a secret … that Livestrong’s official name is still the Lance Armstrong Foundation” (N.Y. POST, 8/25).
SURVIVOR: In London, Fariha Karim reported Armstrong on Saturday was riding at the Power of Four bike race in Aspen and commented on the controversy, saying, “Nobody needs to cry for me. I’m going to be great. I think people understand that we've got a lot of stuff to do going forward. That’s what I’m focused on, and I think people are supportive of that. It’s great to be out here" (LONDON TIMES, 8/26).
A multiyear extension between the NHRA and Coca-Cola will see the company "change the brand it features as the title sponsor of the drag racing series from Full Throttle to Mello Yello,” according to Mickle & Smith of the SPORTSBUSINESS JOURNAL. Sources said that the deal “will extend Coca-Cola’s sponsorship of the series through 2016.” The current contract “was set to end after the 2013 season.” Sources said that Coca-Cola pays $3-4M annually for its Full Throttle sponsorship, and the "new deal is in the same range.” As title sponsor, Mello Yello will be “integrated into the NHRA logo used on everything from publications and promotions to driver uniforms.” The brand also receives “ad inventory during NHRA races on ESPN2 and digital inventory on the NHRA’s website.” This is the “second time Coca-Cola has changed the brand it features as the title sponsor of the NHRA’s top series.” Powerade sponsored the series from ‘01-08 and Full Throttle replaced it in '09. Sources said that the move to Mello Yello “reflects the company’s desire to streamline its marketing and sales efforts in the energy drink category and chip away at Mountain Dew’s lead in the citrus soda category” (SPORTSBUSINESS JOURNAL, 8/27 issue).
U.S. Gold Medal-winning sprinter Sanya Richards-Ross has “taken on Rule 40, an International Olympic Committee regulation that limits how athletes can promote their sponsors,” according to Mary Pilon of the N.Y. TIMES. Rule 40 "restricts advertising activities of athletes and coaches surrounding an Olympics." Richards-Ross said, “If more of the athletes would speak up about it, there would be more attention put on it. At the end of the day, it’s exploitation, and when people hear the facts, they’ll be outraged just like we the athletes are. I think every movement needs a couple of people to stand up for it.” She added, “The Olympic reality has changed.” IOC officials have said that their “exclusive partnerships with sponsors have helped fuel the Games and allowed them to finance programs like Olympic Solidarity, which gives money to athletes in need worldwide.” IOC Communications Dir Mark Adams said, “It’s certainly something that the vast majority of athletes tell us they appreciate. And a small sacrifice at Games time by a few athletes can benefit the majority of athletes and sport in general.” U.S. middle-distance runner Nick Symmonds said, “I understand that the IOC needs revenue. But I don’t see how an athlete having a sponsor detracts from that. I want to share the space.” He added, “To have someone like Sanya come in and publicly speak out is really what this cause needs. I’m not afraid to put my opinions out there, but I’m not as decorated as Sanya. When she steps forward, people listen.”
GOING FORWARD: Richards-Ross said that she and her peers “had not laid out a specific plan going forward, nor had she heard back from Olympic officials about her campaign.” While it will be “difficult to maintain interest beyond the four-year Summer Olympic cycle, she is optimistic about gaining attention among fans and organizers even after the Games have ended.” Some of the options that have been discussed among the athletes are “expanding rules for athletes in displaying sponsor logos, posting on Twitter about sponsors or offering prize money in a similar fashion to the world championships.” Richards-Ross said, “I have been getting a lot of positive feedback from people. And I do think we’ll be able to come together. The one thing we all agree on is it’s going to be a hard fight, to get all the way to the top with the IOC, but I’m hoping that this is something that can be peaceful. I don’t think it needs to be drawn-out and ugly. If we can just be included in the conversation” (N.Y. TIMES, 8/26).