 "Brands become quick to severe ties with disgraced endorsers")
When Maria Sharapova admitted to failing a dope test at the Australian Open earlier this week, Nike, Tag Heuer and Porsche were quick to suspend their sponsorships. This was one of the quickest responses of brands seeking to put a distance between themselves and a tainted endorser.
Brands deserting controversial endorsers is not new. In 2009, Tiger Woods lost an estimated Rs 134 crore in endorsement following a sex scandal. Lance Armstrong lost contracts with Nike, FRS, and Trek Bicycle Corp after it emerged he had taken performance enhancement drugs in 2012. In the 1980s Mike Tyson lost endorsement deals after his former wife accused him of physical abuse.
Back home, S Sreesanth saw Nike and Muthoot bid him goodbye after the match-fixing scam broke in 2013. Aamir Khan was discarded as brand endorser by Snapdeal after his comments on rising intolerance in the country.
Looking at the response time, brands are proactively snapping ties with celebrities in the face of controversy.
“In the day and age of social media, when nothing remains secret for long, brands must make sure the celebrities they associate with are not in any controversy,” says a brand analyst.
Endorsement contracts allow both parties to terminate the relationship in case of a controversy.
A lot, say experts, depends on the nature and tenure of the relationship between the brand and the celebrity. In long-standing deals there is scope for the parties to sit across the table and discuss the way ahead. In new contracts, termination is usually the only course of action.Brands deserting controversial endorsers is not new. In 2009, Tiger Woods lost an estimated Rs 134 crore in endorsement following a sex scandal. Lance Armstrong lost contracts with Nike, FRS, and Trek Bicycle Corp after it emerged he had taken performance enhancement drugs in 2012. In the 1980s Mike Tyson lost endorsement deals after his former wife accused him of physical abuse.
Back home, S Sreesanth saw Nike and Muthoot bid him goodbye after the match-fixing scam broke in 2013. Aamir Khan was discarded as brand endorser by Snapdeal after his comments on rising intolerance in the country.
Looking at the response time, brands are proactively snapping ties with celebrities in the face of controversy.
“In the day and age of social media, when nothing remains secret for long, brands must make sure the celebrities they associate with are not in any controversy,” says a brand analyst.
Endorsement contracts allow both parties to terminate the relationship in case of a controversy.
Aamir Khan had come on board for Snapdeal a little more than a year before he landed himself in controversy. In the beginning, Snapdeal distanced itself from the actor, maintaining it did not endorse his views. A couple of months later, however, the e-commerce player severed ties.
On the other hand, Nokia did not desert Shah Rukh Khan and his IPL team Kolkata Knight Riders after the actor’s behaviour with the security staff at Wankhede Stadium and his alleged drunken spat with Salman Khan. Salman Khan himself has been able to retain fans, films and endorsements despite court cases of poaching and hit-and-run.
“It’s a two-way street. Brands and talent both need to have options for terminating the contract in case of controversy. In case of sportspersons, the contracts are pretty air tight, taking into consideration various scenarios. If the brand or the sportsperson are found guilty of wrongdoing, the other party has the liberty to walk out,” says Indranil Das Blah, partner and chief operating officer, CAA KWAN, a sports and celebrity management agency.
He and his peers agree the trend will continue as brands and celebrities become more conscious of public opinion and as information becomes easily accessible and shared through social media.
“In India, we see fewer controversies around celebrities. In cases like with Aamir Khan, where it becomes inevitable, the brands bow out, and have every right to do so,” concludes another manager for a celebrity.
Celebrities who have lost endorsements because of controversy/scandals
Maria Sharapova: tested positive for banned drug Meldonium – 2016
Aamir Khan: controversy around statements regarding rising intolerance in India - 2015
S Sreesanth: betting and spot fixing scandal - 2013
Lance Armstrong: doping scandal - 2012
Tiger Woods: sex scandal – 2009
