Losing out

USA: Stars who go to jail can find it difficult to rebound – and the brands they endorse can suffer, too.

Recent months have shown that, in the US, brushes with the law do not always mean the end of a career for those in the public eye. In some cases, a dose of notoriety can even give the brand personality a much-needed focus or determination to turn things around.

In her role as a self-appointed style guru, Martha Stewart built her media empire, Martha Stewart Living Omnimedia (MSO), on “tips for gracious living”. With businesses ranging from a syndicated television show to branded home products sold through Kmart and a range of lifestyle magazines, the company brand very much hinged on Stewart as an individual. However, after more than a decade in the public eye, people had started to tire of her “perfect” home-maker image, which left many American women feeling wholly inadequate. By 2001, company turnover had stagnated and was beginning to decline. MSO was trying hard to move beyond the brand of Stewart as a person and to revive flagging advertising sales at its flagship magazine, Martha Stewart Living.

Arrest and recuperation

In 2004, Martha’s image took an unplanned turn when she was convicted for lying to investigators over a suspicious stock sale, and she eventually served five months in prison. However, since her well-documented release from prison in March, wearing a poncho knitted by a fellow inmate, both Stewart and MSO appear to have been making significant progress at repairing and rejuvenating their brands. Despite Stewart being under house arrest for a further five months, they have worked at breakneck speed on new initiatives.

In April, MSO won its first National Magazine Awards, one for Martha Stewart Weddings and the other for Kids magazine. Stewart is set to star in a daytime lifestyle TV programme, as well as her own spin-off to Donald Trump reality show The Apprentice. The latter was announced in February, a month before Stewart left prison. MSO also announced a deal in April to launch a 24-hour radio channel on Sirius Satellite Radio. The Sirius venture is definitely an opportunity for the company to move beyond the “Martha” brand and introduce new talent, especially as Stewart is now in her 60s. The satellite radio network will guarantee fees of $30m (£16m) to MSO over the next four years, with a revenue-sharing deal triggered if subscriptions are high enough. Earlier this month, MSO chief executive Susan Lyne told analysts that key advertisers are coming back to Martha Stewart Living. Lyne estimates ad sales will be up 35 per cent compared with last year. MSO stock, meanwhile, has more than trebled in value in the past year and it certainly seems as if the company now has a focus and impetus that was lacking in previous years.

Kobe Bryant, 27-year-old All Star Guard for the LA Lakers, was the golden boy of the National Basketball Association. Drafted straight from college at the age of 18, Bryant rapidly established himself as one of the best players in the league and also as one of the most marketable. A good-looking family man, fluent in Spanish and Italian and with the moves to match, Bryant had endorsements with Nutella, Mattel, Sprite, McDonald’s and Nike.

The spell was broken when the receptionist of a hotel Bryant stayed at claimed that he sexually assaulted her, and a criminal case was brought against him. Sports marketer Burns Sports & Celebrities estimated that the basketball star lost $4m to $6m (£2.2m to £3.3m) in endorsements after his arrest, and both Nutella and McDonald’s declined to renew their contracts with the star. Although the criminal case was abandoned in September last year and a civil suit settled out of court, it seems unlikely that Bryant will regain the marketing lustre that he once possessed. But with a new $136m (£74m) seven-year contract with the Lakers – signed while he was still under investigation last year – and his Nike endorsement deal still in place, Bryant is far from being on the breadline.

However, even for the biggest stars, the chances of brand recovery are slimmer if the allegations made against them are serious. During the 1980s, Michael Jackson was one of the highest-earning and most valuable pop brands in the world. His 1982 album, Thriller, is still the biggest-selling album of all time, with over 50 million copies sold to date. In total, Jackson sold over 100 million records during the decade, and his touring also proved highly lucrative (Jackson’s 1988 world tour brought in a record gross revenue of over $124m {about £70m at the time}). He was also a pioneer in endorsement deals, signing a contract with Pepsi in March 1986 that was acknowledged by the Guinness Book Of World Records as the largest endorsement agreement in history between an individual and a company (figures of about $15m {about £10m at the time} were reported).

Once a wholesome child prodigy who could do no wrong in the eyes of the public and the media, Michael Jackson’s star has been falling since allegations of child sex abuse first surfaced in July 1993. Jackson and the family of a 13-year-old boy reached an out-of-court settlement in January 2004 over allegations of sexual molestation. He has also been without any major endorsement contracts since Pepsi terminated its agreement when Jackson pulled out of his Dangerous tour following the initial child abuse allegations.

The Jackson dive

As Jackson’s trial on further charges of child molestation nears its conclusion – whatever the outcome – it is hard to see the Jackson brand recovering fully. He is not only facing damage to his brand as a personality, but there is speculation that Jackson is on the verge of bankruptcy. It is estimated that he spends about $30m (£16.5m) a year, compared with an income of about $10m (£5.5m). Regardless of the precise details of Jackson’s financial position, there seems little doubt that Santa Barbara County District Attorney was right to point out in February of this year that Jackson’s present and future earnings as an entertainer “are directly connected to his public image”.

There have been plenty of reminders for marketers in recent months of the potential danger of aligning their brand with a personality. Halos are easily tarnished and golden boys – and girls – can slip up and instantly lose their sparkle. While things do not always turn out too badly for the person concerned, the brands they were endorsed by can find it harder to make people forget their alliance. In a post-Enron world and an increasingly litigious society, the risks of personality as brand should not be underestimated.

Polly Devaney is a former Unilever executive now working as a freelance business editor. Additional research and reporting by Paul Hargreaves


    Leave a comment