When To Ditch the Sponsorship – Your Brand Depends On It

Can brand loyalty really be leveraged through withdrawn sponsorship? Well, in most instances, no. But on select occasions, withdrawing a company’s sponsorship can actually enhance its brand identity and media presence.

Think back to this last St. Patrick’s Day. Parade controversies ran rampant through the New York market after it was determined illegal to show a public expression of gay pride during the event. Immediately following the initial media frenzy, Guinness pulled its sponsorship from the parade, shifting the focus off of gay rights and more onto the inclusive brand identity that Guinness promotes. Through this quick, bold stance, other sponsors took note of the publicity and withdrew their marketing efforts as well.

Much like New York, Boston dealt with a similar situation at this year’s St. Patrick’s Day Parade. After an outcry of public support in response to a rule that excluded gay individuals from participating in the parade, Boston Beer Company, which manufactures Samuel Adams, released a statement revoking their participation and sponsorship.

On a more recent note, L.A. Clippers owner Donald Sterling made headlines last week after he was accused of expressing extremely offensive, racist remarks. After these accusations arose against the NBA team owner, notable brands such as CarMax, State Farm Insurance, Kia, Virgin America, Corona, Sprint, Adidas, Red Bull and Mercedes-Benz immediately dropped their sponsorships, pending the investigation.

In a Forbes article published on Tuesday, David Spencer, sports marketing at Talent Resources, said in an interview that he would advise any clients of his to distance themselves far from the situation. The only way a brand could damage its reputation now was to not withdraw its sponsorship.

And sponsorships are a large part of professional athletics. Although club finances aren’t made public, there is no doubt that the remarks made by Sterling have hurt the franchise. And in the age of social channels and 24/7 media, brands are able to react faster and more publicly to these controversies.

In an AP article featured on Yahoo! Sports, Allen Adamson, managing director of research firm Landor Associates, believes that there are some benefits with withdrawing your sponsorship quickly. The longer a company continues to link its brand to a brand in trouble, the higher the risk its reputation will be hurt.

clippersUnlike other high profile situations that have involved sponsorship withdrawal from individuals who are their own brand (Tiger Woods, Paula Deen, Lance Armstrong, etc.), Donald Sterling’s unusual case is not only hurting his image, but the NBA team he represents as well. Nevertheless, the L.A. Clippers are making it known that they want nothing to do with Sterling. Before playoff game number four against the Golden State Warriors, the L.A. Clippers, in a blatant protest, took off their warm-ups at half court, only to reveal that their Clippers shirts had been turned inside out, hiding the team logo.

As days passed following the accusation, things only got worse for the L.A. Clippers owner. NBA Commissioner Adam Silver announced yesterday that Donald Sterling would be banned for life from the league and fined $2.5 million.

It was noted in an article from USA Today, that this was Silver’s first pivotal decision as commissioner since taking over for David Stern in February. As the sponsorships continue to be withdrawn, Silver stated that brands should judge the NBA based on the league’s response to this incident, and not Sterling’s controversial and offensive remarks.

In the end, it’s unfortunate such events can create far reaching and visible problems for companies. However, these incidents tend to form an opportune time for a company to focus on its own brand identity of inclusion and acceptance, while showing support to the victims of the controversy.