It’s the end of March and the beginning of a busy season across many sports, from NCAA’s March Madness, to the beginning of baseball, to the NBA and NHL playoffs. These are the days when everyone talks about the teams, their standings, the players, their drafts, the stats, the venues and of course their limited beer selections and incredibly high markups. Did I miss anything..? Oh yes… the Brands. You know what I mean of course! And much likely you already have a few names in mind.

As popular as they are, the “brands” are not part of the sports themselves, but rather they feed and benefit directly from them. Sports are the corporate brands’ bread and butter, and big corporations like Nike, Adidas, Reebok and Tag Heuer (to name a representative few), have cleverly adapted their business model to an ever-changing scenario in which corporate endorsements play a major role. Their goal is simple, to get you to think about their brand name by association, so they sign distinguished athletes and celebrities to make their point. Ironically enough, their point is many times moot by their own endorsers; certainly a risky proposition for their many multimillionaire investments.

Let’s talk about Nike for a minute, the company is today one of the most recognized brands in the globe; it has endorsed many sports legends and has built up a reputation of excellence. Case and point: Michael Jordan. However, in recent years it has also had an unfortunate history of adverse endorsing. Many of the highest profile “scandals” of the recent years have put Nike on the spot; starting with Michael Vick who in 2007 was sent to prison for being involved in running a dogfighting operation, then was Tiger Woods who in 2009 his extra-marital affairs send him to hiatus; recently after that, one of Nike’s favorites, Lance Armstrong, was accused of “the most sophisticated, professionalized and successful doping program that sport [cycling] has ever seen”. The Penn State scandal followed that, which forced Nike to remove Joe Paterno’s name from its Child Development Center on its Oregon campus. And finally, most recently is the Oscar Pistorius case, which is probably the most outraging case of adverse publicity Nike has faced in the decade.

With all these sour endorsement efforts happening so frequently, is hard to anticipate what Nike’s marketing department will be doing in the coming years. Endorsements are intended to serve as a selling tool that portray the brand beyond the quality of its materials, the design of the products or even their performance, they sell by referencing exemplary individuals who represent what the brand stands for. Ill endorsements may mean adverse publicity, but yet publicity and in Nike’s case this long line of bad endorsements may also make the company look less corporate and more humanized that other seemingly perfect brands, that is as long as the company learns how to react and address a situation when one of its protégés “drops the ball”. It seems that thus far Nike has done a rather solid job in keeping the eyes of the market in the right place despite what celebrities or athletes do; a good example is the fact that Nike has never dropped an endorser until is absolutely necessary, and in some cases resigning them once they have corrected their path.

Some may consider this as poor management or slow reactiveness to crisis; I for one think that Nike knows exactly what they are doing. For the third quarter of 2012, Nike reported net income for $660 million, approximately 8% increase on shares, a 35% increase on their online operations and a 9% increase on income on the previous year. Bad publicity? perhaps, but don’t forget that Nike also has some of the best in the game behind the swoosh, with an approximate spend of $800 Million, Nike has signed stars like Roger Federer, Ronaldinho, LeBron James, Michelle Wie, Paul Rodriguez Jr. and Maria Sharapova.
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Diego De la Garza

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