Athletes in Scandal and Endorsement Deals

Athletes in Scandal and Endorsement Deals

All civilizations have celebrated the athletic achievements of their most accomplished citizens, from the ancient Greeks contesting the first Olympic Games to the jousting knights of medieval Europe, and societies have typically rewarded their most elite athletes with superior status, financial incentives, and social standing. Within the realm of modern American athletics, our nation’s unique blend of personal liberty and capitalistic ambition has long created a class of professional athletes who are revered as heroic figures and who are compensated commensurately. The multi-million dollar guaranteed contracts which are now de rigueur for American athletics are also accompanied by lucrative endorsement deals which are lavished on the most famous players within each sport or league. While the phenomenon of private companies paying athletes to publically endorse products is nothing new, as Babe Ruth proved during his heyday in the 1920’s by shilling for everything from cigarettes to candy bars, the advent of television and internet technology has enabled athletes to endorse far more products on a far greater scale than ever before. While the attainment of physical prowess and the pursuit of healthy competition once formed the foundation of athletics in this country, today young athletes in every sport aspire not to win championships, but to secure shoe contracts and television appearances. The relationship between athletes and the companies they represent can be fraught with ethical concerns during the best of times, but as the recent scandals involving Olympic swimmer Michael Phelps, world class golfer Tiger Woods, and acclaimed cyclist Lance Armstrong have proven, the intertwining of athletics and avarice can result in extremely complex ethical dilemmas.

After a British tabloid published photographs in 2009 depicting Phelps in the act of smoking marijuana, the multiple gold medal winner faced a backlash from endorsers who hoped to capitalize on Phelps’ wholesome image after a successful run at the 2008 Olympic Games in Beijing, China. The breakfast cereal conglomerate Kellogg elected to remove Phelps from its company roster of athlete endorsers in the wake of his marijuana photograph scandal, removing his image from boxes of its Frosted Flakes brand. While Phelps’ apparent use of recreational drugs did not constitute a doping or performance enhancement violation, Kellogg spokeswoman Susanne Norwitz issued a statement which asserted that “Michael’s most recent behavior is not consistent with the image of Kellogg” (Connor, 2009) as explanation for the company’s decision. The loss of his endorsement deal with Kellogg ultimately cost Phelps an estimated $10 million annually, as well as diminishing his appeal to other companies seeking to associate themselves with Olympic athletes during the post-Beijing marketing bonanza. Conversely, Phelps’ other sponsors chose to honor their endorsement commitments, with major companies including Speedo, Visa and Omega opting to stand behind the embattled swimming star.

Another widely publicized instance in which major companies distanced themselves from an athlete endorser embroiled in a personal scandal occurred in 2009, when the top ranked golfer in the world, Tiger Woods, was involved in an automobile accident that ultimately resulted in revelations of infidelity. With the lurid details of Woods’ multiple affairs making headlines throughout both the business world and the sport of golf, the once highly prized endorser endured significant damage to his public image. Parents who had previously outfitted their children in Tiger Woods branded golf apparel were understandably repelled by allegations of serial infidelity, and soon many of Woods’ most longstanding sponsors were subjected to immense external and internal pressures regarding his status as the most highly compensated endorser in the world. As CNN Money reported recently in an article documenting Woods’ fall from his rank as the highest paid athlete endorser in the world, observing that “Woods’ scandal cost him several high-profile sponsors, most notably Pepsico’s Gatorade, which ended its deal with Woods in February 2010” while also noting that “he also lost partnerships with General Motors’ Buick, Proctor and Gamble’s Gillette razors, and AT&T” (Isidore, 2012). The same article also calculated that “Woods’ estimated endorsement income fell to $54.5 million in 2011 from $60 million in 2010 and $92 million in 2009, the year that ended with his well-publicized sex scandal” (Isidore, 2012), a reduction representing over 40% of the golfer’s endorsement-derived income. While many companies decided that Woods’ endorsement had lost its previous sense of value and dropped him from their overall advertising campaigns, his most influential sponsor, the Nike shoe company that pays Woods an estimated $35 million annually, maintained their mutually beneficial business relationship.

The vastly different reactions of these corporate entities, which ostensibly share a similar set of interests when choosing to sign a particular athlete as a representative, demonstrate the normative ethical entanglements which can arise when competition and commerce collide. When an athlete commits a crime or otherwise violates the law, the consumer market is typically supportive of companies which elect to end those sponsorship deals, but during personal scandals like those that entangled Phelps and Woods, the public appears to prefer that the same companies mind their proverbial business. The varied responses to criminal conduct vs. personal peccadilloes represent an expression and an extension of the American ideals of privacy and individual liberty, proving that the average person is willing to indulge in hero worship if and only if the athletes they revere are held to the same set of standards. Succumbing to marital strife, sexual temptation, or recreational drug use are all common flaws and foibles that the public is willing to forgive, and in these instances corporations and companies are well within their ethical and pragmatic purview to maintain loyalty to embattled endorsers. However, when an athlete’s transgressions involve cheating the spirit of competition, or breaking the laws we all must subscribe to, companies have every right to sever their sponsorship ties. Confirmation of this theory can be found in the most recent headlines, which trumpet the “commercial fallout from doping allegations against Lance Armstrong & #8230; as Nike Inc., RadioShack Corp., Anheuser-Busch, the makers of Trek bikes and Giro helmets, and others distanced themselves from the former cycling champ” (Albergotti, O’Connell & Vrancia, 2012), after the former Tour de France champion was found to be guilty of widespread doping violations over the span of his once storied career.

Works Cited

Connor, T. (2009, February 05). Kellogg’s to drop michael phelps from endorsements over bong photo. New York Daily News. Retrieved from http://articles.nydailynews.com/2009-02- 05/news/17916861_1_phelps-agent-puresport-michael-phelps

Albergotti, R., O’Connell, V., & Vrancia, S. (2012, October 18). Armstrong gets dumped: Nike, radioshack, others distance themselves from cyclist amid drug scandal. The Wall Street Journal. Retrieved from http://online.wsj.com/article/SB10000872396390444868204578062313532317222.html

Isidore, C. (2012, July 17). Tiger woods no longer top-paid athlete. CNN Money, Retrieved from http://money.cnn.com/2012/07/17/news/economy/tiger-woods-pay/index.htm


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