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Nike Sponsorship Crisis: Oscar Pistorius Scandal How Nike 'Just Did

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Nike Sponsorship Crisis: Oscar Pistorius Scandal How Nike 'Just Did Nike Sponsorship Crisis: Oscar Pistorius Scandal How Nike ‘just did it’ Taylor Newell 17693093 Table of Contents Page Number Executive Summary……………………………………………………………… 3 Current situation………………………………………………………………….. 5 Article One (Article File & Article Report)………………………………………. 8 “Pistorius joins Nike’s hall of shame” Article Two (Article File & Article Report)………………………………………. 11 “Nike, Oakley move away from Pistorius” Article Three (Article File & Article Report)……………………………………… 14 “Bullet in the chamber’: Pistorius Nike ad pulled after model’s shooting death” Article Four (Article File & Article Report)………………………………………. 20 “Nike pulls ‘Bullet in the chamber’ Pistorius ad” Recommendations…………………………………………………………………. 23 References…………………………………………………………………………. 25 2 Taylor Newell 17693093 Executive Summary Bill Bowerman and Phil Knight began building the foundations of Nike Inc. in the 1950’s and with current president and CEO Mark Parker, it has now become “the world’s leading innovator in athletic footwear, apparel, equipment and accessories.” (Nike, 2013). In the past, Nike has dealt with a number of celebrity sponsorship scandals where the media has shone a negative light on the brand in response to the actions of its sponsored athletes. These issues include, celebrities such as Lance Armstrong in 2012 after his doping scandal, Tiger Woods after his extramarital affairs, Marion Jones after issues with ‘performance-enhancing drugs’ (Sydney Morning Herald), Justin Gatlin after using testosterone and Michael Vick after being involved in dog-fighting. These scandals have reflected poorly on Nike as a brand, by the athletes they have chosen to represent their brand. In addition to these scandals, Nike is currently facing another celebrity sponsorship scandal involving Paralympic athlete Oscar Pistorius after being charged with the murder of his girlfriend, Reeva Steenkamp on Tuesday the 14th of February, 2013. Nike had previously advertised Pistorius in a campaign with the slogan ‘I am the bullet in the chamber’. After recent events, this slogan has backfired on the company, with the unfortunate phrase being linked to the shooting death Pistorius has been charged for. Australian media coverage of this issue has been analysed through online media sources that include The Sydney Morning Herald (smh.com.au), News.com.au, and B&T Magazine (www.bandt.com.au). Most of the media responses have been negative or neutral in tone towards the Nike brand, with some forms of bias being used to skew the readers perception of the issue. The media is following Nike’s actions in response to the issue closely, while linking it to it’s past media scandals with sponsorships in order to create a negative image of the brand. Some of the headlines of these articles alone are portraying a negative representation of the brand globally. 3 Taylor Newell 17693093 An example of these include: - Nike, Oakley move away from Pistorius – news.com.au (2013) - Sponsors Nike, Oakley sever ties to Pistorius - SMH (2013) - Pistorius fall-out: The perils of sports sponsorship - BBC News (2013) - Oscar Pistorius ad campaign: Nike won't just do it - Mail & Guardian (2013) - Pistorius joins Nike's hall of shame – Reuters, SMH (2013) - Nike's bullet ad with Pistorius backfires - CNN (2013) - Nike suspends its contract with murder accused athlete Oscar Pistorius - couriermail.com.au, (2013) - Nike pulls ‘Bullet in the chamber’ Pistorius ad – B&T Magazine, (2013) This is a significant issue for Nike’s reputation globally as sponsorship issues continue to occur. McHale, Zompetti & Moffitt (2007) believes, the “Study of Nike’s past and current problems deserves continued attention and merits reflective consideration because Nike stands as one of the most controversial and crisis-ridden corporations from which much can be learned.” (p. 375) In order to regain it’s positive image in the media and in the view of society, Nike must use its crisis management team to act appropriately in relation to the current issue. It needs to create open communication both internally within the company and externally between Nike and its publics so that the company’s goals are consistent and clear. It must also create prevention strategies in order to counteract any possible sponsorship crises in the future. A two-way symmetrical model of communication needs to be reinforced by the company in order to regain the trust of its stakeholders and prevent negative media coverage in the future. 4 Taylor Newell 17693093 Current Situation In its past fiscal year, it has been reported that Nike Inc. has spent $A 780 million on endorsements. (SMH, 2013.) As a result of many of these celebrity endorsements ‘backfiring’, it could be said that Nike has not spend its endorsement money wisely and has earned itself a negative reputation in return. Nike’s current issue is its sponsorship deals with celebrity athletes. The actions and choices of these athletes have created negative media attention for both themselves and the Nike brand, which they represent. In the past ten years, Nike has had over seven PR issues involving sponsored athletes. These issues have evidently continued to occur, and research into the cause of these issues is needed in order to prevent them from happening in the future. Looking back on the past ten years, it is easy to see a variety of celebrity sponsorship scandals involving Nike. In 2003, sponsored basketball athlete Kobe Bryant was facing sexual assault charges, which put Nike in deep water. Days before the scandal, Nike signed a sponsorship deal with Bryant reportedly worth $US40 million. Nike did not terminate his contract, however waited for the stars image to improve before marketing him again. Two years later, Marion Jones was found using drug enhancements. Fortunately, Jones’ contract was just coming to a close when the scandal broke out, and Nike chose not to renew it, given the affect it would have on the brand. Justin Gatlin then became the first sponsored athlete by Nike that had their contract terminated after a doping scandal in 2006 which left him banned from competing for four years. In 2007, football player Michael Vick was found to be involved in dog fighting. Nike then chose to terminate his contract after the negative image he had received from this scandal. The brand then joined up with him again after his reputation improved. One of the most notable sponsorship disasters of Nike was the Tiger Woods sex scandal in November 2009, which left Nike in a difficult position. Due to his offence being separate from his sporting abilities, Nike continued to sponsor Woods, despite the 5 Taylor Newell 17693093 negative media backlash which became an issue for the brand. Lance Armstrong then became a sporting disgrace in October 2012. He was accused, and later proven of doping. This unfortunate situation reflected poorly on the Nike brand, who had previously promoted Armstrong as an athlete who did not use any performance-enhancing drugs. The contract with Armstrong was terminated due to “seemingly insurmountable evidence” (Nike, 2013.) Currently, Nike is facing another issue, after its sponsored Paralympic athlete, Oscar Pistorius was charged with the murder of his girlfriend, Reeva Steenkamp. On Tuesday the 14th of February, 2013, it is reported that Pistorius shot her four times while she was in the bathroom. Previously, Nike had promoted the athlete in a campaign which gave him the unfortunate slogan: ‘I am the bullet in the chamber’. In order to deal with the issue, Nike has currently taken down all advertising on Pistorius’ site with the slogan. On the 21st of February, Nike suspended its contract with the athlete. This response is appropriate given the circumstance, where Pistorius is accused of murder. Future associations with him would be increasingly detrimental to the brand. Nike now needs to work to save its brand from the unfavourable campaign and its slogan, along with its ongoing reputation for poor sponsorship choices which reflect badly on the Nike brand. The Sydney Morning Herald (smh.com.au), News.com.au, and B&T Magazine (www.bandt.com.au) are some of the media sources that have covered the Pistorius issue in their articles. Some of these have been analysed in the article reports. The response of these media releases has been predominantly negative in relation to the Nike brand as they associate past sponsorship issues between Nike and its sponsored celebrities to the current one of Oscar Pistorius. Headlines of some of these articles have been listed in the executive summary. However, while some of them are critical of Nike’s sponsorship choices, some of these articles have included quotes lack thereof from Nike spokesman KeJuan Wilkins who has contributed for the most part in a positive way to the brands image through remarks in articles such as: ‘Nike has no plans for Oscar Pistorius in upcoming campaigns’ (SMH, 2013.) 6 Taylor Newell 17693093 “Wilkins said the wording of the 2007 campaign ‘was in reference to Oscar’s speed and performance on the track. Nike felt it was appropriate to take the ad down from Oscar’s website recognizing the sensitivities of the situation.’” (SMH, 2013.) “Nike spokesman KeJuan Wilkins declined to say whether Nike had previously had any plans for Pistorius, or whether it will remove current advertising that includes him.” (News.com.au, 2013.) “’Nike extends its deepest sympathy and condolences to all families concerned following this tragic incident. As it is a police matter, Nike will not comment further at this time,’ Nike said.” (SMH, 2013.) A further analysis of these articles is shown in the article files and reports within this issue brief to gain a deeper understanding of the issue. This will allow solutions to be drawn in order to prevent the issue from recurring. 7 Taylor Newell 17693093 Article Files Article File 1: Title: “Pistorius joins Nike’s hall of shame” Source: Sydney Morning Herald Date: Tuesday February 19, 2013 Author: Reuters Page: online Copy obtained electronically from smh.com.au 8 Taylor Newell 17693093 Article Summary: This article depicts Nike’s brand in a negative light in response to the Oscar Pistorius case, while mentioning other previous cases where their sponsoring decisions have backfired.
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