SBJ/March 3-9, 2014/Opinion

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  • How Under Armour, Plank deftly weathered Sochi crisis

    Under Armour had a significant PR problem. On Friday, Feb. 14, The Wall Street Journal reported that a “suspect” had emerged in the U.S. Speedskating team’s poor performance at the Sochi Games: New Under Armour suits may have had “a design flaw that may be slowing down skaters.” The front-page report, featuring the headline, “Are New Suits Slowing The U.S.?,” began a weeklong narrative focused on the company’s possible role in the team’s poor results.
     
    For a brand that prides itself on innovation, technology and performance in an effort to help and support athletes, this had the markings of a massive blow to image, industry relations, stock price, staff morale and its executive ranks. But while there will be some residual damage from the storm in Sochi, the company calmed the crisis because of an aggressive and smart PR plan, strategic messaging and a CEO who deserves credit for not hiding when the heat was on. Let’s look at how it was handled.

    Under Armour’s Plank remained accessible during the controversy.
    Photo by: GETTY IMAGES
    After the initial report, the company was an easy target — ESPN’s Keith Olbermann bashed it for supplying “loser” uniforms. The early headlines on the wires put the company on the defensive: “Is Under Armour Crimping Olympic Athletes,” “Under Armour Goes To Damage Control Instead Of Gold In Sochi” and “How Much Will A Speed-Skating Flap Slow Down Under Armour?” Company CEO Kevin Plank talked to Bloomberg TV that Friday, a smart, proactive approach that tapped into the outlet’s broad reach and connection to Wall Street. Plank was not combative or dismissive. He treated the issue with seriousness, saying of the criticism, “it is all very fair,” and “everybody is just sort of trying to find out what we can do to help our athletes win.” Even with Plank’s remarks, the news rattled Wall Street, and Under Armour shares on that Friday closed down 2.4 percent at $106. That afternoon, it was announced that the skaters could ditch the new suits for the previous Under Armour versions, and that continued the news cycle.

    That following day’s (Saturday) Wall Street Journal went with the headline, “U.S. Speedskating To Drop Controversial Under Armour Suits.” The athletes’ performance didn’t improve using the old suits, giving Under Armour some relief, but the issue stayed in the news. The Wall Street Journal again pushed hard on the story, going with a front-page, in-depth analysis piece on Tuesday that examined the relationship between the company and U.S. Speedskating and the decision-making around using the new suits. It ran with the header, “How A Big Bet On Racing Suits Left U.S. Speedskaters In The Cold,” and the article noted “to be sure, no one knows what role, if any, the Mach 39 played in the team’s performance,” but it has created a “crisis for Under Armour.” Matt Mirchin, UA’s executive vice president of marketing, was quoted and conceded the issue was “troubling.” While damaging, I believed the story portrayed Under Armour as engaged with U.S. Speedskating, and the message was consistent — it was focused on improving the situation and helping the athletes.
     
    While The Wall Street Journal went heavy on the back story, another national platform, USA Today, went with a straight news story on that same day, while business writer Bruce Horovitz praised Under Armour’s response in a front-page Money section story under the header “Under Amour’s Crisis Management On Target.” The different approach by the news outlets was evident again when Under Armour announced it was renewing its deal with U.S. Speedskating on the final Friday of the Games, Feb. 21. The Wall Street Journal subhead read in part, “Controversial Suits Have Been Blamed For Poor Performance” and no quotes from Plank, who instead was featured in two stories in USA Today. In a front-page piece announcing the renewal, he said, “It was a bit of a witch hunt that began to build.” In addition, a Money section front-page story had Plank’s photo and the header, “Under Armour Getting Back Up.” That morning, Plank hit “CBS This Morning,” whose demo is moms who may be watching the Games, and then CNN/CNN International and CBNC, where he targeted Wall Street. He conceded to CNBC the renewal was timed because, “We don’t want the story going any longer.” He stressed he didn’t blame the athletes for the controversy — “Not at all” — but acknowledged the issue was getting out of control. “There was a lot of hype built around it, especially in today’s world of social media and how fast stories can move, and it all of a sudden became emphatic that the suit was a problem.”

    By the afternoon of Feb. 21, the narrative had changed and Under Armour and U.S. Speedskating were focused on the future, not the controversy of the past week. Likewise, during trading on that Friday, Under Armour’s share price rose nearly 5 percent to $112.68.
     
    So what worked? Under Armour has never been a quiet brand, and it didn’t hide from the issue, making its top executives accessible. To me, Plank was the key. He spoke on-the-record as soon as the issue hit, speaking immediately on Bloomberg TV. The company obviously made a strategic decision: make the CEO available to USA Today, where the coverage was noticeably different, and use CNBC and Bloomberg to hit the financial markets reached by The Wall Street Journal. Then target a morning show (CBS) and global outlet (CNN). Plank was direct, honest, was supportive of the athletes and focused on problem-solving. His comments may have played a bit too “rah-rah” at times: “We’re patriots. … We will come back and that’s nothing more American than that story.” But that was to boost internal morale. There was no bitter back and forth with U.S. Speedskating, as both Executive Director Ted Morris and President Mike Plant expressed support of the company. Plant himself told our Olympics writer Tripp Mickle: “Deep down we know it wasn’t the suits. Under Armour is an American company supporting an American team.”
     
    Bottom line: Visible, empathetic, honest leadership along with a proactive, strategic PR plan was a successful response from Under Armour to a troubling issue that could have spiraled out of control and set the brand back significantly.

    Note: News headlines in print newspapers may have changed in their online editions.

    Abraham D. Madkour can be reached at amadkour@sportsbusinessjournal.com.

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  • Schmidt honor well-deserved

    Having had the privilege of personally watching Bill Schmidt as vice president, sports marketing, pioneer the Gatorade brand for Quaker Oats and define the gold standard for sports beverage marketing, I was not at all surprised to see his being honored as an inductee in the 2014 Class of The Champions: Pioneers & Innovators in Sports Business (SportsBusiness Journal, Feb. 17-23, 2014).

    My years as an attorney with Quaker Oats in its corporate offices overlapped significantly with Mr. Schmidt’s and allowed me the opportunity to provide legal support for and be a part of many of his projects, including the Michael Jordan/Gatorade sponsorship agreement and the Gatorade Ironman. He truly had a passion for and was able to lead a team culture, even to the extent of always seeing the benefit of engaging the Quaker lawyers as bringing value to the process and not just as potential “deal killers.”

    But to me, the biggest compliment of Mr. Schmidt’s professional career and successes was a spontaneous and very honest reaction by Jerry Reinsdorf when I had the opportunity to speak with him in 1994. Mr. Reinsdorf, owner and chairman of the Chicago Bulls and White Sox and just coming off three consecutive NBA titles by the Bulls (1991-93), upon the mention of Mr. Schmidt’s name, immediately reacted with all due respect for the man and more than just a hint of envy: “Boy, I wish I had his job.” Enough said.

    Gerry Cassioppi
    Naperville, Ill.


    Cassioppi is former counsel at The Quaker Oats Co.

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  • Minority numbers in coaching, graduation rates unacceptable

    This is always one of my favorite times of the year as a sports fan, as college basketball prepares to crown conference winners, pick the men’s and women’s tournament fields, and enter March Madness itself. It is a time for upsets, emerging unknown players, the dominance of a few teams and star players, and innumerable hours of excitement.

    All of that emerges for the general public to see as games are televised. For me, however, the backdrop includes the reports that I help author for the University of Central Florida’s Institute for Diversity and Ethics in Sport. In January, we released a report on the athletic leadership positions among the 125 Football Bowl Subdivision schools in the 2013-14 academic year. In a few weeks, we will release the 2013 College Racial and Gender Report Card. We also will release the graduation rates of all the teams in the men’s and women’s tournaments. Most of that will not contain good news about college sports, which remains overwhelmingly led by white men and where white male basketball student athletes graduate at significantly higher rates than African-American male basketball student athletes.

    Among the 125 top teams in the FBS study released in January, 89 percent of the presidents, 85 percent of the athletic directors and 100 percent of the conference commissioners were white. In those positions 75, 78 and 100 percent are white men, respectively. Overall, whites held 89 percent of the 382 campus leadership positions at the 125 schools. These grossly disproportionate white percentages do not reflect who is playing on college sports teams or is in the America that we know.

    The forthcoming College Racial and Gender Report Card looks at all schools and their teams in all three NCAA divisions. It is even more disappointing.

    Missouri’s Frank Haith is among the 23 percent of Division I basketball head coaches who are black.
    Photo by: GETTY IMAGES
    But for basketball in Division I, there will be some good news in the coaching ranks, where there has recently been a lot of concern. There should be high expectations for African-American coaching opportunities, with nearly 56 percent of the student athletes on men’s basketball teams and 48 percent of the student athletes on women’s teams being African-American in Division I. Among the men’s basketball coaches, 23 percent were African-American, up a significant 4.4 percentage points from the previous report card. Nonetheless, the percentage is still down 2.2 percentage points from the 25.2 percent total that was reported in the 2005-06 season, an all-time high for men’s head basketball coaches. On the women’s basketball teams, African-American men and women combined for percentage of 20.6 percent of the head coaching positions, up a dramatic 6 percentage points from the previous year.
     
    However, the news is bleak when we look beyond Division I basketball. Reviewing all sports, whites dominate the coaching ranks on the men’s teams with 86 percent, 88 percent and 92 percent of all head coaching positions in Divisions I, II and III, respectively. On the women’s teams, whites held 85 percent, 88 percent and 92 percent of all head coaching positions in the three divisions.

    Forty-two years after the passage of Title IX, women coaching women’s teams still are nowhere near the majority of head coaches. Women held only 39 percent of the women’s head coaching jobs in Division I, 35 percent in Division II and 43 percent in Division III. It doesn’t make any sense that these percentages are not getting significantly better.

    With the percentages being so low for both people of color and women as head coaches, the most startling statistic for me is that African-Americans were so underrepresented as head coaches that, once again, the total percentage of women coaching men’s teams in Division III actually exceeded that of African-Americans coaching men’s teams in Division III (5.3 percent versus 4.3 percent). In Division II, the total percentage of women coaching men’s teams was similarly low to the percentage of African-Americans coaching men’s teams (3.9 percent versus 4.2 percent).

    The gap between the graduation rates of African-American and white basketball student athletes has been one of the more painful statistics we report each year. While the graduation rates for both have continued to improve, the gap between the two has been between 25 percent and 30 percent over the past five years. That is simply unacceptable. Looking at the 76 teams most likely to be picked for the men’s tournament this year, the gap would be 22 percent.

    I am even more concerned this year than in previous years because of the demise (at least temporarily) of the Black Coaches and Administrators. There is some promise that the group will be revived, but right now, it is inactive and without a staff. For decades, it was the voice that fought for all the things that needed to change for African-American coaches and administrators. The silence in early 2014 is difficult to endure and needs to be smashed so the appropriate attention to these issues is resumed.

    So over the course of the next month, I will watch and cheer great players and great plays. Like many fans, I often root for the underdog. And the biggest underdogs behind the scenes, as discussed in this column, are the women and people of color waiting for the chance to serve America’s colleges and universities in leadership roles in athletics. I am looking for as many upsets there as on the courts.

    Richard E. Lapchick (rlapchick@ucf.edu) is the director of the Institute for Diversity and Ethics in Sport at the University of Central Florida, which annually publishes racial and gender report cards on MLB, the NBA and WNBA, NFL, MLS, college sports, and the APSE. Follow him on Twitter @richardlapchick and on Facebook at facebook.com/richard.lapchick.

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