Five-time Grand Slam champion Maria Sharapova announced at a press conference yesterday (7 March) that she had failed a drug test at the Australian Open in January. The news led sponsors to pull out of and suspend sponsorship deals.
Nike was the first to suspend its relationship with the athlete. In a statement the company said it was “saddened and surprised by the news”, but that it will “continue to monitor the situation”.
Swiss watch brand TAG Heuer, however, has decided to cut all ties. A spokesperson says: “Maria Sharapova was under contract with TAG Heuer until December 31, 2015. We had been in talks to extend our collaboration. In view of the current situation, the Swiss watch brand has suspended negotiations.”
Porsche has also announced it will “postpone planned activities” with the star. Sharapova’s other endorsement partners include Avon Products and Evian, which are yet to respond on the news.
Last year Forbes put Sharapova in the top spot as the highest paid female athlete with earnings totalling $29.7m (£20.8m) of which winnings accounted for just $6.7m (£4.7m) but endorsements $23m (£16m).
The tennis star was taking the drug Meldonium, also known as Mildronate, which is used to treat cardiac and heart conditions to help with blood flow. Sharapova said she had been taking the drug since 2006 but that it was added, unbeknown to the athlete, to the World Anti-Doping Agency’s banned substance list in January this year.
A new era of crisis comms
It is currently unknown what the long-term fate of the star will be, although she faces at least a suspension from playing the game. That in turn affects brand reaction in what Rupert Pratt, managing director of Generate Sponsorship, says is a new era of brand reaction and crisis communications.
Pratt says that although “Nike has a history of standing by athletes, particularly track athletes and doping issues” where Sharapova was concerned the brand “couldn’t get the announcement out fast enough”.
He explains: “We are seeing a new era in how sponsors respond to crisis or issue management, which is straight away this is not acceptable whereas previously there would have been an element of riding the storm out and sitting in the background and not become part of the story.”
Tim Crow, chief executive officer at Synergy Sponsorship agrees saying he was not surprised that Nike suspended its deal but “was surprised about how quickly they did it”.
Pratt believes that other sponsors will pull out and the news will have a commercial impact around sports sponsorships. “You will see a culture of corporate [brands] pulling out straight away because of the negative impact around commercial endorsements.
“It will heighten concern from brands looking to go into sponsorship [deals], and [endorsing] an entity they cannot control.”
Brands forced to be reactive
But the wording of the Nike and Porsche response leaves room for manoeuvre in the future. Crow says: “It’s very smart what they have done because they have put a fast marker down in the ground [in terms of reputation] but have given themselves the room to make a decision downstream once this has played out.”
It’s clear that responses to crisis in the sports sector have taken a turn where brands are being reactive.
Crow says: “The prime change in how brands are behaving around this space has been what has happened with FIFA, where [most] partners have been more vocal than brands have been in the past.”
Reports of corruption have dogged FIFA and the IAAF in recent months. In January reports emerged in January suggesting that Adidas, the IAAF’s biggest sponsor, told the athletics’ world governing body it wants to terminate its sponsorship deal three years early.
Pratt claims “we’ll look back at the FIFA, IAAF and Sharapova era and say that is the time when the tide changed”.