A few months ago when Tiger Woods got hurt I remember hearing a story on TV that some of his sponsors might consider dropping him. I actually thought that was odd and gave it some thought. I realize that companies and athletes have contracts and moral clause language in there that allows the companies to dump the stars and void the contract. Yes stars can be and have been dropped for a DUI, getting in a bar fight, dealing or using drugs and many other things.
My real question today is does it go both ways? Do you think there is language in the contract allowing the star to opt out if the company doesn’t do things the right way?
- What happens if the company files bankruptcy?
- What happens if the CEO embezzles money?
- What happens if the company comes out with a new product and unfortunately a few people get really sick?
Since I am not a star and don’t run in those circles I really have no idea what goes into those contracts.
Do you have any insight on this?
My gut is that years ago contracts were probably one-sided and only protected the company but today I am not sure.
I look forward to reading your comments.
Liz says:
That is a great question. I think athletes should be able to opt-out if they want to. Who would want to associate themselves with a corrupt company? It’s a great question, especially in this economy.
Rick Johnson says:
As you mentioned it is a mutual agreement and if the company files bankruptcy of if there is a scandal that the athlete does not agree with, yes they should opt out of the contract. The athlete is a “brand” and they need to protect their brand the same way a major corporation should.
What happens when a athlete that has been a spokesperson for a particular brand, and then the athlete is found / alleged to be associated with a particular scandal; the company would end the “marriage” quickly, but what about the company requesting a percentage of the contract back? I guess it all depends on the legal team on both sides.
O.J. Simpson was the face of Hertz many years ago, what about Michael Jackson and Coke? It takes less time to damage a brand that it takes to build a brand into a household name!
Merrill Dubrow says:
FYI
Woods loses Buick sponsorship
Tuesday, November 25
DETROIT — General Motors is bailing out on Tiger Woods.
Woods, a global icon in sports with his 14 major championships, has been carrying the Buick logo on his golf bag for the last nine years and still had one year left on his contract.
But General Motors Corp. was looking to cut costs and hoard cash while trying to survive the worst sales downturn in a quarter-century. And it said Monday the world’s No. 1 golfer wanted more time for himself, especially with a second child on the way.
“Timing is everything,” said Larry Peck, golf marketing manager for Buick. “We’ve had such a great partnership with Tiger. It’s hard for us to walk away from that. But this frees up time for him. And it sure frees up a lot of money for us.”
The endorsement deal, believed to be worth at least $7 million a year, was to expire at the end of 2009.
Woods has endorsed GM products around the world and mainly has been seen in Buick commercials as the company tried to give the nameplate a more youthful image. Peck said during the launch a few years ago of the Enclave that its research showed 78 percent of consumers who bought the SUV previously had not been Buick owners.
“We attribute awareness of our product to Tiger,” he said.
Buick’s U.S. sales have dropped 54 percent from 2000, the first full year Woods worked with GM, to 2007, according to Ward’s AutoInfoBank. The brand’s global sales, however, rose
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17 percent during that span, according to GM. Buick is particularly popular in China.
The average age of the brand’s buyers also dropped. Around 2001, the average age was in the low 70s, but it has since fallen to 66 for Buick sedans and 53 for the Enclave.
GM has been making dramatic cuts in advertising as it tries to conserve cash. The nation’s largest automaker spent nearly $7 billion more than it took in last quarter and has warned that without federal help, it may reach the minimum amount of cash required to run the company by the end of the year.
Mark LaNeve, GM’s vice president for North American marketing, said GM and Woods started discussing an end to the deal earlier this year, and it had nothing to do with the Detroit Three automakers’ quest for $25 billion in federal loans.
But GM’s statement said the decision was made as part of “the search for budget efficiencies during a difficult economy for General Motors.”
Woods’ agent at IMG, Mark Steinberg, said the decision to end the relationship one year early was “absolutely mutual.”
“It was a combination of things,” Steinberg said. “Tiger was looking to gain some more time, and certainly it was an opportunity for GM to reduce its spending with everything going on.”
Buick said last week that it would be cutting back on its deal providing courtesy cars at PGA Tour events.
GM is so concerned about costs that it cut advertising during the 2009 Super Bowl, although it still plans to sponsor the NFL and likely air ads before and after the game. GM also has pulled out of the Oscars and Emmy Awards in 2009 — the first time in more than a decade it is not running ads right before, during or after the two events.
U.S. automakers, the single largest category of advertisers, cut their ad spending 18 percent to $1.37 billion in the second quarter compared with the same period in 2007, according to TNS Media Intelligence in New York.
Foreign automakers also are trimming their spending on advertising in U.S. markets, with a 5.4 percent cut in the second quarter, for an overall 11 percent drop in U.S. auto ad spending to $3.27 billion, the 12th quarterly dip in a row.
Woods has carried only two logos on his bag since he turned pro in August 1996. He was with Titleist through 1999 until Buick won a bidding war for its brand on a bag that gets more television time at tournaments than any other golfer.
Woods has not played since season-ending knee surgery after winning the U.S. Open, and he is not expected to return until next year, most likely in early March, depending on his recovery.
Steinberg said he would “expect there to be some exposure on the bag” when Woods next plays.
“I’ve got a few ideas, and we’re in the process of working through that,” he said.
Buick remains the title sponsor of two PGA Tour events — the Buick Invitational at Torrey Pines, which Woods has won six times, and the Buick Open outside Detroit, which Woods has won twice.
Merrill Dubrow says:
I am sure lots of companies will be pulling their sponsorship deals as the challenging economy continues:
Mercedes won’t renew Miller Park deal
Associated Press
MILWAUKEE — Mercedes-Benz is pulling out of the Milwaukee Brewers’ Miller Park.
The company will not return after completing a three-year contract for naming rights in the picnic area in right field. Brewers executive vice president Rick Schlesinger said the club’s other major car sponsors, including Chevrolet and Toyota, plan to return.
“We’re sad to see Mercedes go, but it was nothing Brewers-related,” Schlesinger told The Associated Press on Friday. “We want to get them back when times improve.”
The decision was first reported by The Journal Sentinel.
The picnic area is popular because of its proximity to the field. Only a padded chain-linked fence divides players from fans, and the area is often seen during TV broadcasts when balls are hit to right field. The area, built in 2006 on what used to be the warning track, seats 75 and includes bricks from old County Stadium.
“It’s become a very prominent piece of real estate at Miller Park,” Schlesinger said. “I’m very optimistic we’ll have new naming rights for the space.”
Sponsorships also have been bolstered by the club’s recent success. Milwaukee made the postseason for the first time since 1982 and has posted .500 or better records three of the last four years.
“We recognize we have to be as creative as we can be to convince sponsors investments are worthwhile,” Schlesinger said. “Our best ammunition is increasing the level of creativity and coming up with ways to measure the success of the sponsorships through objective data.”