What to do when sponsorship backfires

When the team, event, or in this case, the individual you have chosen to sponsor is caught up in a PR crisis, is it best to cut and run, stick by your partner, or say nothing at all?

This was the question facing Adidas after Kanye West’s or Ye’s recent antisemitic comments. In these most difficult and delicate circumstances, how should sponsors respond?

In cases like this, the only answer is to immediately cut your association with the partner and reaffirm your stance against all forms of racism and discriminatory behaviour. Indeed, this was the approach taken by almost all the rapper’s commercial partners including Adidas, GAP, Balenciaga and JP Morgan, but Adidas, in particular, has been heavily criticised for failing to act sooner.

Sponsorship provides many benefits to organisations but is not without risk. Ye’s commercial partners are not the first to have had to terminate agreements, and they won’t be the last. So how can brands engage in meaningful partnerships while reducing the risk of being involved in similar incidents? The answer lies in thorough research before entering into an agreement, pre-emptive preparation for unforeseen events and clear and concise communication if things go awry. Unfortunately, it looks as though Adidas failed on all three.

Market Research

Those with a history of making the headlines for the wrong reasons are likely to be repeat offenders.

Sponsorship typically involves people, and people are unpredictable, none more so it would seem than Mr West. Even the best research in the world cannot foresee the damaging events brought about by an individual’s actions. This makes planning for such things difficult, but just because something is difficult doesn’t mean we shouldn’t try.

Pre-agreement research is your opportunity to conduct thorough due diligence on the team, event or individual you interned to align your brand with. Time spent researching your new partner is time well spent when considering the potential downside of being associated with racism and discrimination. The due-diligence stage of your sponsorship planning should leave no stone unturned when assessing the risks that could harm your brand. See our article, Ignore the market research at your peril.

Scenario Planning

Before entering into an agreement, it’s a good idea to discuss with your team the hard lines you are not prepared to cross as an organisation.

If your partner crosses this line, your decision of whether to terminate the agreement has already been discussed and agreed upon. This was the mistake Adidas made when they partnered with Kanye in 2015.

Despite being a company strongly opposed to racist and discriminatory behaviour the brand fumbled around internally for two weeks, probably in a state of great panic, before finally communicating the correct answer. This chaos that caused so many negative headlines for the brand could have easily been avoided by preemptively discussing and agreeing upon their hard lines back in 2015. And if not then, there were plenty of opportunities over the last few weeks, months and years, as their partners behaviour made more and more headlines, to get their house in order.

For brands committing to longer term traditional sponsorships with teams and events these hard lines should be written into your agreement from the outset; see our article, Sponsorship contracts, beware the fine print.

Communication

Hopefully, you will never need to use the steps we have discussed up to this point. Should the worst happen, however, and your organisation finds itself at the centre of a sponsorship-related PR crisis, communication is critical. Effective, timely and clear communication is crucial to managing any PR crisis.

It’s hard to know what is worse, silence or no comment; in either scenario, the vacuum inaction creates can be just as damaging to your brand, if not more so. This was articulated by Adidas’s Director of Trade Marketing, Sarah Camhi, who, in a LinkedIn post, said, “As a member of the Jewish community, I can no longer stay silent. It’s been 14 days since Kanye started spewing anti-Semitic rhetoric and Adidas has remained quiet.”

You may also read our article on Can controversial sponsorship succeed.