USA Gymnastics: Sponsors know when to hold them and know when to fold them

In our thirty-two years of studying the intersection of sport and marketing, we have seen a fair share of demoralizing stories:  the bribery scandal of the Salt Lake City Olympics, money laundering by FIFA, racism with the L.A. Clippers, and performance enhancement drugs across professional cycling, Major League Baseball, and even the entire Russian Olympic Team — the list is long and broad.

But for sponsors wishing to capitalize on the positive aspects of sports, there is no playbook for what to do when great partnerships take an ugly turn.

Sometimes the path is straight forward—Just get up and go.

Sponsors such as Accenture and Gillette who fled from Tiger Woods, or Nike and InBev who separated from Lance Armstrong, made strong statements and were not hurting anyone (except the tarnished athlete) by walking away. Moreover, they probably put the money toward better purposes while taking a stand on morality issues.  These sponsors were unhitching themselves from damaged personalities with the sport, not the sport itself.

Sometimes the response is Full speed ahead.

Following the MLB steroid scandal of 2005, the New York Times reported that none of the then-current sponsors left baseball, and in fact seven new sponsors signed on for the next season.  Two of those companies, GM and DHL, made public statements that they felt confident in the new direction MLB was taking regarding steroid use.[1]

But sometimes the most impactful answer is Tough love.

Setting a notable example, Visa put their partner on warning in the wake of the 2015 FIFA corruption, stating: “As a sponsor, we expect FIFA to take swift and immediate steps to address these issues within its organization. This starts with rebuilding a culture with strong ethical practices to restore the reputation of the games for fans everywhere.”

But the more significant message from Visa was in the end note their statement: “Our sponsorship has always focused on supporting the teams, enabling a great fan experience, and inspiring communities to come together and celebrate the spirit of competition and personal achievement – and it is important that FIFA makes changes now, so that the focus remain on these going forward.” [2]

As we saw the news unfold regarding USA Gymnastics, we didn’t expect any loyalty from the sponsor side, and since the start of the scandal, USAG has all but entirely lost active corporate support.  While most partners separated quietly by not renewing upcoming agreements, we were intrigued by AT&T, who distanced themselves but did not entirely walk away.  Their statement reads:

“We notified USA Gymnastics today that we are suspending our sponsorship of the organization until it is re-built and we know that the athletes are in a safe environment. The terrible abuse suffered by these young women is unconscionable. We remain committed to helping these young athletes pursue their dreams and hope to find other ways to do so. We stand ready to step back in when USAG has fully addressed these tragic events.”[3]

It seems like the public agrees with this tough love response.  In a survey of 1,000 respondents completed January 29-30 by Performance Research, the majority a (61%) agreed that the position they would most want a corporate sponsor of USA Gymnastics to take is, “Maintain the sponsorship only if USA Gymnastics makes significant changes to safeguard young gymnasts”.

In signing with USA Gymnastics, AT&T’s executive director of corporate sponsorships stated, “We want properties where we can help each other. That’s a true partnership.” [4]  In this regard, we applaud AT&T’s decision to stand with the athletes and be a powerful influence on positive changes in the sport.

USA Gymnastics’ motto is, “Begin here. Go anywhere.”  USA Gymnastics will be starting from scratch, and they will have a long way to go.  It is a great sport with courageous athletes-  and we hope they get there.