25.01.2016

COULD ADIDAS PULLING ITS IAAF SPONSORSHIP SIGNAL A CHANGE IN HOW SPONSORS TREAT INTEGRITY ISSUES?

With reports on Monday that Adidas are ending their partnership with the IAAF four years early in the wake of the Russian doping scandal, are we starting to see a shift in how sponsors are reacting to integrity issues?

The core principle of sponsorship is to benefit from a positive brand association. The ‘brand values transfer’ can vary subject to what a sponsor is looking for e.g. simply to be seen as a ‘good’ brand, being ‘liked’ more or to demonstrate market leadership, global scale, such as the FIFA World Cup or to be seen to be innovative and forward thinking, such as Formula One.

Once a rights holder’s integrity is brought into question so is the value of the sponsorship, because there is now a potential negative association. No brand wants to be associated with corruption or scandal.

Interestingly, sponsors would previously  have tried  to distance themselves from the issues by not commenting and pulling back on marketing activity (a classic crisis communications approach) until the issues had died down or gone away.

However, not commenting or not being seen to criticise activity is becoming increasingly more difficult and of late we have seen more sponsors publicly condone or not renew their partnerships as a result.

We are starting to see a potential change in both crisis communications management (actually going on the record) & tolerance of issues (exercising their non-disrepute clauses and ending partnerships)

FIFA - no comment to no thank you 

Adidas’ decision to cut its ties with the IAAF is the first proactive move by a sponsor in response to an integrity scandal. FIFA’s alleged corruption has been well documented, but unlike the IAAF they have only had to deal with non-renewals of partnerships, rather than terminations.

Four of FIFA’s leading sponsors – Coca-Cola, McDonald’s, Visa and Budweiser –demanded that Sepp Blatter step down immediately in the face of the corruption crisis, but none terminated their partnerships. Hyundai/Kia continued its sponsorship and stood by FIFA, while stating that they were to monitor the situation ‘very closely’. World Cup sponsor Visa threatened to end its partnership with FIFA, but ultimately didn’t end its relationship with football’s governing body.

Emirates and Sony have both let long standing partnerships with the governing body lapse in the wake of the corruption scandals. Both had deals starting with the 2006 World Cup in Germany, before deciding not to extend their relationship to the controversial 2018 and 2022 tournaments in Russia and Qatar.

The IAAF have become the latest governing body to be hit by controversy in recent months, and Adidas’ decision to terminate their partnership might mark a turning point in how sponsors deal with integrity scandals moving forward.

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