Brands stand by their man but for how long?

The decision by sponsors Nike, AB Inbev and Radioshack to stand by Lance Armstrong’s despite allegations from US anti-doping chiefs that he is a “serial cheat” is about their unwillingness to turn their backs on multi-million dollar brand strategies until there is unequivocal proof of wrong-doing. It is unlikley, however, that his allure to sponsors will last beyond the length of the current deals.

LanceArmstrongPicTwo
Lance Armstrong’s major sponsors Nike, AB Inbev and Radioshack will not put their multi-million sponsorship deals with the cyclist at risk despite allegations from US anti-doping chiefs until there is unequivocal proof of wrong-doing.

All three have come out to support the 41-year old American following allegations from the US Anti-Doping Agency (USADA) last week that he was at the centre of “the most sophisticated, professionalised and successful doping programme the sport has ever seen.”

Armstrong, who has already been stripped of his seven Tour de France titles, has always denied taking banned substances, although he did not challenge the USADA’s claims earlier this year that his successes were fuelled by systemic doping.

Observers say Nike, AB Inbev and Radioshack may have good reason to stick with Armstrong, despite the accusations that have tainted his sporting career. The cancer survivor is still admired by many, particularly for his charity work. His Livestrong charity, which Nike also sponsors, has raised over $470m (£292m) for cancer research, in part through the sale of its branded footwear and clothing.

The difference between keeping and ending an endorsement deal depends as much on an athlete’s behaviour than a company’s marketing strategy, sponsorship experts say.

Rupert Pratt, managing director at sponsorship agency Generate, says cutting ties to a global sporting icon the moment they hit a “rough patch” is a big decision for a brand because it can “unravel big branding investments.”

He adds: “Brands build entire business plans around high-profile stars and will look to hold on for as long as possible to avoid becoming involved in the crisis while it is at its height.”

Nigel Currie, director of sports marketing and sponsorship at Brand Rapport, says when a business looks to a sports star for traits beyond athletic prowess, that’s when sponsorship deals become vulnerable to off-the-field transgressions.

He adds: “Nike risks sending out wrong messages to consumers by continuing to back Armstrong, but they will prefer to let the immediate furore die down, take stock of the situation and then make a decision. The accusations against Armstrong look very bad and in the long term he will struggle to keep his sponsors. However, the sponsors in question have a strong tie up with the LiveStrong charity so this does cloud the issue.”

Pratt adds Nike, AB Inbev and Radioshack’s may not last once their current deals expire: “I don’t think any of the sponsors will stand by him if he is found guilty of the charges. These brands have got involved with Armstrong because of his sporting prowess and the work his done to fight cancer. The allegations fly in the face of all of that and sponsors risk damaging their brands in the long-run if they continue to back Armstrong should he be found guilty”.

Athletes in turmoil

Marion Jones

Nike decided not to renew its contract with former track and field world champion Marion Jones, after the US athlete admitted to using performance enhancing drugs.

Wayne Rooney

The Manchester United forward’s deal with Coca-Cola ended in 2011.The family-friendly soft drink brand reportedly grew tired of ongoing controversy surrounding the player.

John Terry

The former England captain was said to have been dropped by Umbro amid allegations of racial abuse that culminated in the Football Association banning Terry for four matches.

Kobe Bryant

Nike backed the basketball star after he was accused of sexual assault in 2003. The charges were dropped and Bryant went on to become arguably the basketball league’s most popular player today.

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