SBD/February 21, 2014/Olympics

Under Armour Renews With U.S. Speedskating Through '22 Despite Sochi Suit Controversy

Critics have blamed UA's Mach 39 suits for the USA's disappointing results
Under Armour Founder, Chair & CEO Kevin Plank Friday morning announced the company has extended its sponsorship with U.S. Speedskating though '22 despite the suits used at the Sochi Games becoming the center of controversy. The U.S. team has yet to medal going into the final weekend of the Games, and many people have blamed UA's Mach 39 suits for the disappointing results. Plank acknowledged the company has "had a lot happening over the last week" and UA's goal in announcing the extension was "really quieting the noise" around the controversy. Plank: "What we want to do is make sure about this one particular sport that we're to dust ourselves off, get up and we're going to come back bigger and stronger than we've ever been before." CNBC's Scott Wapner noted the timing of the new deal "seems peculiar" and asked, "Why now is this happening? Is this to make the controversy go away? Did you get good terms on this deal because you're coming out now?" Plank: "We don't want the story going any longer." He added, "We doubled down -- literally -- our deal because what I didn't want it to come down to was a negotiation. So we said our current deal, we've put so much money (into the new deal), this will be a no-brainer for you. It wasn't a PR play as much as it was a cultural play" ("Squawk Box," CNBC, 2/21).

PART OF A WITCH HUNT: Plank said that the "much-maligned suit ... should never have been victimized." Plank: "It was a bit of a witch hunt that began to build. The suit became the witch." He added, "This brand was dragged through the mud. There was a lot of conjecture and speculation, but none of it based on fact" (USA TODAY, 2/21). Plank described the criticism as being "hard," saying, "People are taking shots at your company and there's nothing you can do about it." He noted the company's brand is not damaged and said, "This is one part of the story, but this is certainly not the story. It's a bit more of the sideshow of what it's become than the main event." Plank: "There were definitely people looking for answers, and so the witch wound up being the suit. I thought there was a lot of hype built around it, especially in today's world of social media and how fast stories can move. It all of a sudden became emphatic that the suit was a problem when we knew really well mathematically that we had empirical evidence that we felt the suit was strong. Our opinion became, 'Look, our job is to outfit you, put you in the best advantage way we can with the best products in the world and let athletes go perform.' When that doesn't happen, we usually have alternatives. In this one, I think we had a Plan A and a Plan B. Lessons learned from this, I wish we had a Plan C as well because there were still things we didn't think it would get to this level, this crescendo it seems to have come to" ("Squawk Box," CNBC, 2/21).

FEELING DEMORALIZED?
USA TODAY's Bruce Horovitz writes it is a "bit early to assess the fallout" from the Mach 39 controversy, but Plank "insists there's been no immediate decline in Under Armour retail sales." The company's stock price also is "virtually unchanged from what it was about one week ago." Horovitz: "But how do you measure a company's self-esteem? That's hard." Plank said that it was "particularly hard at a previously scheduled town hall meeting at the company's Baltimore headquarters this week when a perplexed employee asked Plank: 'What did we do wrong?'" Plank "reminded the employees in the room that Under Armour products are top-notch." He said, "I asked them to believe in themselves" (USA TODAY, 2/21).

ORGANIZATION WANTS THOROUGH REVIEW: U.S. Speedskating President Mike Plant said the NGB plans to bring in outside experts and consultants and undertake a review of its preparation for the Sochi Games. "We're saying, 'Let's do a deep dive into this,'" Plant said. "We can't do it internally. We have to bring in external resources." Plant said that the organization will bring in sports scientists and sports physiologists, as well as speedskating greats like Bonnie Blair. Collectively, they will evaluate what went wrong at the Sochi Games (Tripp Mickle, Staff Writer). For more, see SBD/SBJ's Olympic blog.
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