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Volume 10 No. 25

Marketing and Sponsorship

Brasileiro club Corinthians is "looking for a sponsor for the shoulder area" of the club's jersey, according to Lucas Turco of MAQUINA DO ESPORTE. The team is negotiating with three companies, "whose names it would not reveal." The club would not comment "on the value it was searching for with the sponsorship." Corinthians added that there was no deadline "for the negotiations." If the club does reach a deal, "it should surpass R$50M ($25.5M) in sponsorships for '13." Currently, bank Caixa (title sponsor) pays R$30M ($15.3M), language school Fisk (sleeves) pays R$15M ($7.7M) and telecom TIM (numbers) pays R$3M ($1.5M). Corinthians "will not sell the space" on the lower back of its jersey in '13. The objective is to "increase the value of the other sponsorship spaces on the jersey" (MAQUINA DO ESPORTE, 2/15).

Nike "swiftly pulled the unfortunately-worded ads, as the perils of celebrity brand endorsement were brought sharply into focus once again," according to Matthew Wall of the BBC. As South African Paralympian Oscar Pistorius faced charges of "premeditated murder" in a Pretoria courtroom following the shooting death of his girlfriend, Reeva Steenkamp, his sponsors "went into crisis-management mode." Pistorius, who has strongly rejected the murder charge, "is thought to have earned several million pounds from sponsorships" with Nike, BT, Thierry Mugler, Oakley, and Ossur, the Icelandic firm that makes the prosthetic carbon fibre blades he wears for races. However, in the world of sports sponsorship, the "Blade Runner" stands to "lose everything, even presuming his innocence." Industry veteran John Taylor said: "Even if Pistorius is found innocent, he is damaged goods. Brands need to act quickly and distance themselves from him; they cannot afford to wait until the case is heard. It's not like rats deserting a sinking ship, it's just the sensible thing to do." Sports marketing agency Brand Rapport Dir Nigel Currie said, "This is very different to the Tiger Woods and Lance Armstrong cases; this is life and death. There's no coming back from this" (BBC, 2/15). The AFP reported the "accumulative total of Pistorius' earnings from sponsors, which accounts for much of his income, was reportedly" $4.7M. The next step for sponsors "is unclear." However, they have not been afraid "to sever ties with sports stars in less tragic circumstances" (AFP, 2/16).

CANCELING APPEARANCES: The PTI reported Pistorius' agent "has begun canceling races since the Olympic athlete was charged with the murder of his girlfriend." Pistorius' agent, Peet van Zyl, said that "he cancelled the contract" Saturday "for a high-profile re-match next month with fellow double-amputee Alan Oliveira to promote the 2016 Rio Olympics and Paralympics." Van Zyl said, "I can't plan anything. I will only have him run when he is in a condition to run as a world-class athlete. Physically and mentally fit" (PTI, 2/17). In London, Andrew England reported with shoulder sagging and head bowed, Pistorius "broke down several times during the hearing at Pretoria Magistrates Court, occasionally comforted with a pat on the back from his brother, who sat with their silent father a row behind the accused." The case was adjourned until Tuesday after the defense "requested more time" to carry out its own investigations into the incident, and Pistorius "was not asked to enter a plea." A statement from Pistorius’ family and his representatives, issued after the hearing, said they disputed the alleged murder "in the strongest terms" (FINANCIAL TIMES, 2/15).

ROLE MODELS?: Also in London, Simon Kuper wrote way back in '08, "the three most admired personalities in sport were probably" Woods, Armstrong and Pistorius. They "were portrayed not just as great athletes but as great men, role models." Any sentient person over the age of eight already knew that great athletes "are not necessarily role models." That is not what the scandals "have taught us." Rather, we can see now that the sports-industrial complex -- the machine of media and advertising that cranks out myths about athletes -- "has gone into overdrive." From the early '90s, satellite TV and then the Internet "promoted sport globally, taking the sports-industrial complex with it." Its role models "are now marketed worldwide." Male athletes "have taken over roles once held by knights, saints and soldiers." They "represent the masculine ideal." Female athletes "remain less saleable, unless very pretty." Athletes’ brands "are being stretched ever further just as they themselves become narrower people." Yet when the athlete "predictably falls, the sports-industrial complex is dismayed." There "are now vacancies for role models to replace" Woods, Armstrong and Pistorius. Replacements "will be found -- and later will fall." Only the sports-industrial complex "goes on forever" (FINANCIAL TIMES, 2/15).

TROUBLED NIKE ATHLETES: In N.Y., Matthew Futterman wrote Nike endorser Pistorius' arrest "isn't the first time some member of the company's stable of galactic star sports figures has been a target of serious allegations," but can Nike's strategy of putting money behind inspirational stories "succeed indefinitely as the company veers from one catastrophe to the next." Nike-sponsored athletes previously under fire include Armstrong, Woods, Michael Vick and Marion Jones, as well as late Penn State football coach Joe Paterno. Yet the company through it all “has stayed a course centered on inspiration rather than product.” Pistorius, “after all, doesn't even wear shoes.” In the past it has been noted that “when a Nike athlete falls to earth, the company's fortunes continue to soar.” As major stars are “unmasked, there is a growing sense that the practice of mythmaking may have to stop.” There is a perception that Nike “has somehow changed the rules of athletic success in a crass or craven way,” and some “accuse the company of commoditizing fame.” An element about Nike that “rarely gets acknowledged is that it doesn't sell shoes, or even athletes, as much as it buys and sells stories, narratives, fairy tales.” They “aren't a shoe company as much as a giant abstraction -- a condition of the aspirational mind” (WALL STREET JOURNAL, 2/15).

THE TIMES THEY ARE A-CHANGIN: The GLOBE & MAIL’s Bruce Dowbiggin wrote these are “hard times for heroes and the people who promote or sponsor them.” In this “media-saturated age, where values sell products, sponsors and charities fall especially hard for athletes such as Pistorius or Armstrong.” Their “virtuous back stories give sponsors the halo effect in addition to marketing push.” Pistorius was one of the “great legends of the 2012 London Olympics, seemingly running against the odds on his blade-like feet.” His sponsors “took it from there, giving him the Lance Armstrong treatment.” But Dowbiggin wonders, “Did Pistorius’s Teflon effect cause the sponsors to miss signs? A cursory look behind the scenes should have raised flags about Pistorius” (GLOBE & MAIL, 2/15). ESPN’s Pablo Torre said the Pistorius story "continues the most brutal stretch of idol-smashing in sports that we’ve ever seen probably in history." Torre: "You start with Joe Paterno, you go to Lance Armstrong to Manti Te’o to now Oscar Pistorius” (“Around The Horn,” ESPN, 2/14).

German sportswear company Puma "was on the back foot again" Thursday as "plunging annual profits forced it to ditch sponsorships and slash its dividend," according to James Thompson of the London EVENING STANDARD. The sportswear group "also forecast that revenues for this year would be flat." Puma also said that "it would continue with plans" to close 90 loss-making stores, to leave it with 540 shops globally by the end of '13. Puma CEO Franz Koch, who will leave his position in March, said the company had assessed its sponsorship portfolio and "terminated endorsement contracts that are either unprofitable or are no longer part of Puma’s core categories going forward." Puma's pre-tax profits plummeted by 65% to €112.3M last year after "it was forced to discount to shift excess inventory." The company will "slash its dividend to 50 cents a share" (EVENING STANDARD, 2/14).

SAIL AWAY: REUTERS' Victoria Bryan reported Puma is to stop sailing sponsorship deals, including teams in the Americas Cup and the Volvo Ocean races, "as part of efforts to focus on sports and products that bring in the most money." Puma, which on Thursday reported '12 profit down 70%, "is going through its biggest reorganisation in 20 years to counter falling profits and encourage more people" in the U.S., Europe and China to buy its shoes and T-shirts. The group is closing stores, cutting products and last month said that "it would stop sponsoring rugby, leaving the Irish rugby union team looking for new kit." In sailing, Puma "will stop sponsoring the Oracle team, current holder of the Americas Cup," after the '13 season (REUTERS, 2/14).

RED BULL: HORIZONT's Jessica Mulch reported Puma "will terminate its sponsorship deal with F1 team Red Bull Racing." A Puma spokesperson said the decision is based on "marketing-strategic reasons." Puma has been Red Bull's official outfitter since '07. However, Puma "will keep F1 in its sponsorship portfolio as it is also the official outfitter of F1 team Scuderia Ferrari" (HORIZONT, 2/11).

Brasileiro club Botafogo has agreed to a shirt sponsorship with nutrition company Herbalife for the '13 season. It will mark the third straight season the two parties have partnered. Herbalife's logo will be seen inside the team's jersey numbers as well as the front of the shorts (Botafogo).  ... Cricket Scotland and energy company Parkhead Group has agreed to a three-year sponsorship deal. As a result, the shirts of Scotland's national cricket teams will bear the logo of the Parkmead Group. The company will have its logo displayed on the playing, training and formal wear of all men's and women's national team's at all age levels, as well as the clothing of the organization's staff (Cricket Scotland). ... Energy company Cairn India has signed up as the co-sponsor to the men’s and women’s Indian hockey teams. The company has signed up for three years on a seven crore ($1.3M) per-year deal and will help develop and grow the national sport (Cairn India). ... National Rugby League club North Queensland Toyota Cowboys have continued their long-term partnership with Queensland Country Credit Union for the 2013 NRL season. Queensland Country will again be the shorts sponsor for the Cowboys as well as continuing as the club’s official banking partner, exclusive financial services partner and the exclusive health insurance provider (North Queensland Toyota Cowboys). ... Bulgarian operator Mtel has signed on as the sponsor of the Bulgarian Tennis Federation for the sixth consecutive year (Mtel). ... The Qatar Stars League and Qatar’s General Electricity and Water Corporation Kahramaa signed a partnership agreement (GULF TIMES, 2/16).

IN GERMANY: German car manufacturer Opel "is likely to become the new shirt sponsor of Dutch Eredivisie club Feyenoord." After months of intensive negotiations, both parties "are close to an agreement." Opel was the club's shirt sponsor between '84-89 already shirt sponsor of Rotterdam (NRC, 2/13). ... Financially troubled German Hockey League (DEL) club Dusseldorf EG has extended its sponsorship deal with city-owned utility company Stadtwerke Dusseldorf for another year. The two parties did not reveal financial details (Dusseldorf EG).

ON TWO WHEELS: Tire manufacturer Bridgestone will launch a campaign to show off its title sponsorship of the Copa Libertadores. The "Buy and Win" campaign will see consumers that buy tires win gifts including jerseys from teams participating in the Copa Libertadores, footballs, and tickets to games. The initiative will begin on Feb. 25 and will last for the entire first phase of the tournament (MAQUINA DO ESPORTE, 2/15). ... South Korean tire manufacturer Kumho Tire has become the official tire sponsor of the China Touring Car Championship. The deal is for three years (Kumho Tire).