SBJ/March 3-9, 2014/Opinion

How Under Armour, Plank deftly weathered Sochi crisis

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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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