What Happens When an Endorsement Deal Goes Wrong?
On this week’s episode of Schtick to Sports, the GSC panel takes a look at the evolution of athlete endorsement deals, what makes for a strong brand-athlete partnership, and what to do when an endorsement deal goes wrong.
The transcript has been edited and condensed.
Prologue:
Well before Mean Joe Greene traded his jersey for a coke, before Barkley told us that he wasn’t a role model, and before Bird and Jordan played for a Big Mac, there was a man named Charles Hollis Taylor.
Born in rural Brown County in 1901, Taylor aspired to be a basketball great from a young age. That dream came true for him in 1919, when Taylor played his first pro game as a member of the Akron Non-Skids. Four years into that pro career, Taylor got a second job working for the namesake of his then pro team — Converse. After a year as a shoe-salesman-basketball-player hybrid, Taylor made several suggestions to transform Converse's signature basketball shoe. These changes included improved comfort, flexibility, added protection for the ankle and placing a Converse All-Star patch on every pair.
Taylor soon gave up his playing career, and became a full-time basketball evangelist. Taylor travelled the country, teaching people about the game, scouting talent and most importantly, selling basketball shoes. Less than a decade after he took that job, the brand decided to put his name on their signature shoe, and Chuck Taylors we’re officially born. That shoe would go on to sell 600 million pairs worldwide, making Chuck Taylor All-Stars, the highest selling basketball shoe in history. On today’s episode of Schtick to Sports, we’re taking a look at some of the massive endorsement deals that have come since, what makes for a successful brand-athlete partnership and some of the dangers of an endorsement deal gone wrong.
Szczepanek: Why are athletes such effective product endorsers?
Evans: One of the most important things a brand can have is credibility, and athletes lend instant credibility to a brand’s products. The idea that the very best athletes in the world are using your product is a very powerful one. It used to be that athletes would self-select their equipment, based on their preferences and what the best products were on the market. Now, brands pay hundreds of millions of dollars to get athletes to use their equipment, and the difference is, the equipment you see on the court is custom-make, whereas the equipment fans purchase in-store is nowhere near the same level of quality. Despite that disconnect, fans still see their athletes as valuable and credible spokespeople.
Randall: It also has to do with the size and exposure of the leagues. It wasn’t too long ago that the NBA and NHL were, realatively speaking, Mom and Pop shops. Now, they’re these huge businesses. As a result, athletes are more visible than ever, especially in various other forms of entertainment. People have regular exposure to these athletes now. Fans have far more access to athletes on a regular basis because of social media. And if you look at follower counts and things like that, athletes are some of the highest like they have some of the highest exposure around. Dan, I know you’ve railed on Connor McDavid for being a corporate shill, but look at how many people he reaches on a daily basis.
Szczepanek: To be clear, the reason I attacked Connor for shilling is because his 300,000 followers aren’t just there for product endorsements. He’s tweeted 20 times in the past year and 18 of those times he was selling something. That’s not a great balance.
Randall: When I teach marketing, I make it clear that there are three important ‘i’s’ to social media promotion — information, insight and interaction. Charitably, he’s missing two of those.
Szczepanek: Exactly. Athlete endorsers are only as valuable as the trust and legitimacy they can provide a brand.
Szczepanek: The NCAA and several major athletic brands are under investigation right now by the FBI, for illegally paying players. Why risk it?
Randall: It’s all about the money. Honestly, it’s much worse for the athlete, who risks becoming ineligible and losing their earning power essentially forever. As for the brands, there’s big big money to be made in winning and holding these large college contracts. Louisville’s a very powerful basketball brand, so they wanted to find a way to make sure that they kept them. So that’s what they did. As a quick aside — Holy Christ, surely the Federal Bureau of Investigation has something better to do than to investigate whether or not brand executives frickin paid unpaid frickin college athletes. Holy hell get your shit figured out.
Evans: First of all, I agree the FBI needs to chill. Second, let’s say these Adidas executives do get convicted and they get punished accordingly. You know what? They’ll just new executives to do the exact same thing. There’s no real risk to the company. Here’s your buyout. Thank you for your service. You’ll have an advisory job once you get out of prison.
Szczepanek: And don’t worry, we’ll be there to pick you up in our three-striped Adidas van.
Szczepanek: When athletes sign these massive deals, does anyone lose?
Evans: The company doesn’t care, because they’re still making money. The athletes don’t care, because they’re still making money. If it’s anyone, it’s the fans. The costs are being passed along to the fans, as well as a group that still gets overlooked, and that’s the employees in developing countries who are making this equipment. The only way many of these companies can afford these deals is because they’re cheating on production costs. Companies don’t make these deals if they’re not paying virtually nothing in labour costs.
