SBD/June 3, 2014/Marketing and Sponsorship

Phil Mickelson's Sponsors Sticking By Him Amid Insider Trading Investigation

KMPG has had its logo on Mickelson's headgear since '08
None of Phil Mickelson's top sponsors have "shown any signs of cutting ties" with the five-time major winner despite him being the target of an insider trading investigation, according to Rachel Abrams of the N.Y. TIMES. KPMG, which has its logo featured on Mickelson's hat, issued a statement yesterday saying it has had a "very strong relationship with Phil for a number of years, and we fully expect it to continue." Abrams noted the financial company "could have the most sensitivity to the accusations" against Mickelson, as one of its employees "was embroiled in an insider trading scandal last year." Barclays did not comment on the issue, while Callaway in a statement said that it "valued" its partnership with Mickelson. Callaway Senior Manager of Global Communications Scott Goryl said that the company valued its "long-standing partnership with Mickelson." Marketing experts said that given Mickelson's "standing in the sports world ... and his long-term sponsorship relationships, it's unlikely that any of the brands will cut ties just yet." Van Wagner Sports & Entertainment President & CEO Jeff Knapple: "I think they will stand by him and wait for the investigation to proceed." Abrams noted the scenarios under which brands can "break off an endorsement deal are big negotiation points in sponsorship contracts, and typically require an athlete to be convicted of a felony crime, or break a 'moral hazard clause.'" While felonies are "clear-cut, the definition of 'moral hazard' can be hazy and vary from contract to contract" (NYTIMES.com, 6/2). Colvin Sports Network Founder & President Bill Colvin said companies like Barclays and KPMG likely will be "very cautious because Phil Mickelson has been a very well respected endorser of these products for years and years." Colvin: "At a minimum, he's built up a little bit of allowance" (“Closing Bell,” CNBC, 6/2).
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