Penn State Brand Associations: A Threat To Nike?

Brad VanAuken The Blake ProjectNovember 14, 20113 min

By now most Branding Strategy Insider readers are well aware of the sex abuse scandal that has engulfed Penn State University, damaging its brand and threatening those associated with it. As the scandal widens, Clare O’Connor, a staff writer for Forbes asks us: 

As a major sponsor, what should Nike do in this situation to safeguard their brand?

It would benefit Nike if each of its sponsorship agreements had an escape/cancellation clause for Nike if the athlete, team or school’s athletic program is found to have done something illegal or immoral.

Should there be a point of no return for brands when confronted with allegations of this severity concerning one of the recipients of their money? That is, an agreement among the powers that be about what won’t be tolerated?

Adding an escape/cancellation clause for Nike regarding specific athlete, team or school athletic program behaviors that are deemed to be unacceptable seems to be a wise move. Would this be an impediment to cutting a deal if the athlete, team or school knew that one-day he/she/it might be caught for an illegal or immoral act that he, she or it has committed on an ongoing basis? Maybe.

What implications could this have for Nike? They stuck by Tiger Woods, Michael Vick and Kobe Bryant when the going got tough, but I think it’s safe to say extramarital affairs and dog fights don’t hold a candle to covering up systemic child rape. Could there be a backlash or is Nike too big a brand to be affected?”

No brand is “too big a brand to be affected.

Having said that, the key association/proof point that Nike is seeking is “authentic athletic performance” (Nike’s brand essence) when it connects with elite athletes, teams and school’s athletic programs. As long as its sponsored athletes, teams and schools reinforce this (individually and as a group), the Nike brand should be fine.

People will give Nike some “slack” for associating with people or programs that have unknown “skeletons in their closets,” especially when there has been a large pool of athletes, teams and schools that they have sponsored over time, most of whom have not been problematic. The sheer number of Nike sponsorships at any one time and over time increases the probability that one or more of these sponsored athletes, teams, schools or programs might find themselves on the wrong side of morals or the law. The sheer volume of sponsorships also distances Nike from any individual sponsorship.

The big question is the cumulative effect of one after another of its sponsored athletes, teams or schools exhibiting reprehensible behavior outside of the athletic arena. Even if reprehensible behavior is expected of some elite athletes, at some point, does this begin to reposition Nike as “authentic athletic performance, regardless of morals”? The escape/cancellation clause could help Nike when it feels the need to distance itself from the most egregious behaviors.

On Branding Strategy Insider, we regularly answer questions related to brand and growth strategy. If you have one, Just Ask The Blake Project

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