The sports industry has endured its fair share of crises in recent memory, with scandals rocking collegiate blue bloods like Michigan State and Ohio State; the Dallas Mavericks in the professional ranks; the national governing bodies for gymnastics and taekwondo; and apparel giants Nike and Under Armour.
But as problematic as the underlying conduct in each of those cases is, the most damaging mistakes often come in the aftermath of their revelation as the institutional actors charged with coordinating a response fail to see the consequences of their decisions. Indeed, these errors in management in those crucial moments after a scandal becomes known can compound crises’ legal and public relations impact. It took years and a criminal indictment for Penn State to finally grapple with football coach Jerry Sandusky’s abuse — and the legal and NCAA blowback reflected the extent of the cover-up. Likewise for USA Gymnastics: The governing body for one of the country’s most successful Olympic sports is still reeling after hundreds of victims exposed the organization’s repeated failure to address the known conduct of Larry Nassar. And at Michigan State, the healing process from Nassar’s abuse was frustrated by an interim leadership group that refused to fully cooperate with external investigators. Put simply, the response to the crisis is often more important than the crisis itself.
To avert these additional — and completely avoidable — consequences, below are some of the considerations and factors leaders in the sports industry should account for when formulating and executing a crisis response.
Know your institutional limitations
A key threshold issue in responding to crises in sports is understanding whether the situation can be adequately handled “in-house,” or if external help is required. The latter is almost always the wisest option. First, legal departments in professional sports organizations and collegiate institutions are often small, meaning that in-house attorneys and staff may not have the bandwidth necessary to conduct a thorough investigation. Moreover, even if in-house legal departments can add a crisis investigation to their duties, whether they should is a thornier question. Facts are king in crisis management, and the best path to accurate and truthful information is for a neutral, unbiased and previously uninvolved party to do the fact finding. Finally, organizations also should determine whether they could benefit from legal and public relations cover, both of which third party investigators can provide, as they navigate through crises. All of this, of course, comes at a cost, which is also a crucial factor in deciding whether to engage an independent entity. The financial, legal, and goodwill costs of mishandling a crisis on the front-end can be significant, and sports organizations must weigh the initial investment in outside help against the potential consequences of going it alone.
Understand your unique exposure
When in crisis, sports organizations must recognize their various points of exposure and craft a response with these in mind. In most cases, the highest priority should be determining potential legal consequences and mitigating them to the greatest extent possible. But even if legal ramifications are safely off the table, there are other constituencies, including leagues/governing bodies, sponsors, players, and fans to consider. Leagues can and do exact heavy punishment for organizations implicated in scandals, and sponsors can as well if they sever ties en masse. Further, players and fans can become disillusioned with their teams when crises aren’t dealt with properly or in a timely fashion, spawning both financial and performance consequences. Harmonizing the oftentimes competing needs of these diverse constituencies is difficult, but a good crisis response accounts for each.
Prioritize legal, public relations goals
Related, good crisis management strikes the correct balance between legal and public relations objectives. But because the “right” balance will be different depending on the organization and the crisis, leaders must determine how much weight to give each risk. Thus, it may be that, in some situations, prioritizing transparency above all else is favorable because of its potential to preserve the organization’s reputational interests — even if doing so compromises its legal position. Though the current media climate strongly incentivizes a robust public relations response, reconciling legal and reputational interests must be done on a case-by-case basis.
When help comes, don’t fight it
Importantly, if a third party entity is retained to investigate a crisis, they must be allowed to do their work. Stonewalling investigators makes little sense. It wastes time and money, frustrates the search for the truth (remember, facts are king), and creates the potential for even more PR blowback.
The debrief: Mitigating future risk
Finally, and whatever the crisis may have been, sports organizations should critically review their own compliance and response processes so that: A) crises are avoided and; B) if they occur, they are handled appropriately. It is this final step where a comprehensive report authored by a third-party law firm or investigative entity — which can see the entire situation from an unbiased, global perspective — is truly irreplaceable.
Ben O’Neil, a partner at Quinn Emanuel Urquhart & Sullivan LLP, counsels institutions faced with unique and unexpected challenges.
Questions about OPED submission guidelines or letters to the editor? Email editor Jake Kyler at jkyler@sportsbusinessjournal.com
