Nike Sponsorship Crisis: Oscar Pistorius Scandal How Nike 'just Did It'
Nike Sponsorship Crisis: Oscar Pistorius Scandal How Nike ‘just did it’
Taylor Newell 17693093 Table of Contents Page Number Executive Summary 3 Current situation . 5 Article One (Article File & Article Report) . 8 “Pistorius joins Nike’s hall of shame” Article Two (Article File & Article Report) . 11 “Nike, Oakley move away from Pistorius” Article Three (Article File & Article Report) 14 “Bullet in the chamber’: Pistorius Nike ad pulled after model’s shooting death” Article Four (Article File & Article Report) . 20 “Nike pulls ‘Bullet in the chamber’ Pistorius ad” Recommendations . 23 References . 25 2
Taylor Newell 17693093 Executive Summary Bill Bowerman and Phil Knight began building the foundations of Nike Inc. in the 1950’s and with current president and CEO Mark Parker, it has now become “the world’s leading innovator in athletic footwear, apparel, equipment and accessories.” (Nike, 2013). In the past, Nike has dealt with a number of celebrity sponsorship scandals where the media has shone a negative light on the brand in response to the actions of its sponsored athletes. These issues include, celebrities such as Lance Armstrong in 2012 after his doping scandal, Tiger Woods after his extramarital affairs, Marion Jones after issues with ‘performance-enhancing drugs’ (Sydney Morning Herald), Justin Gatlin after using testosterone and Michael Vick after being involved in dog-fighting. These scandals have reflected poorly on Nike as a brand, by the athletes they have chosen to represent their brand. In addition to these scandals, Nike is currently facing another celebrity sponsorship scandal involving Paralympic athlete Oscar Pistorius after being charged with the murder of his girlfriend, Reeva Steenkamp on Tuesday the 14th of February, 2013. Nike had previously advertised Pistorius in a campaign with the slogan ‘I am the bullet in the chamber’. After recent events, this slogan has backfired on the company, with the unfortunate phrase being linked to the shooting death Pistorius has been charged for. Australian media coverage of this issue has been analysed through online media sources that include The Sydney Morning Herald (smh.com.au), News.com.au, and B&T Magazine (www.bandt.com.au). Most of the media responses have been negative or neutral in tone towards the Nike brand, with some forms of bias being used to skew the readers perception of the issue. The media is following Nike’s actions in response to the issue closely, while linking it to it’s past media scandals with sponsorships in order to create a negative image of the brand. Some of the headlines of these articles alone are portraying a negative representation of the brand globally. 3
Taylor Newell 17693093 An example of these include: - ‐ Nike, Oakley move away from Pistorius – news.com.au (2013) - ‐ Sponsors Nike, Oakley sever ties to Pistorius - SMH (2013) - ‐ Pistorius fall-out: The perils of sports sponsorship - BBC News (2013) - ‐ Oscar Pistorius ad campaign: Nike won't just do it - Mail & Guardian (2013) - ‐ Pistorius joins Nike's hall of shame – Reuters, SMH (2013) - ‐ Nike's bullet ad with Pistorius backfires - CNN (2013) - ‐ Nike suspends its contract with murder accused athlete Oscar Pistorius couriermail.com.au, (2013) - ‐ Nike pulls ‘Bullet in the chamber’ Pistorius ad – B&T Magazine, (2013) This is a significant issue for Nike’s reputation globally as sponsorship issues continue to occur. McHale, Zompetti & Moffitt (2007) believes, the “Study of Nike’s past and current problems deserves continued attention and merits reflective consideration because Nike stands as one of the most controversial and crisis-ridden corporations from which much can be learned.” (p. 375) In order to regain it’s positive image in the media and in the view of society, Nike must use its crisis management team to act appropriately in relation to the current issue. It needs to create open communication both internally within the company and externally between Nike and its publics so that the company’s goals are consistent and clear. It must also create prevention strategies in order to counteract any possible sponsorship crises in the future. A two-way symmetrical model of communication needs to be reinforced by the company in order to regain the trust of its stakeholders and prevent negative media coverage in the future. 4
Taylor Newell 17693093 Current Situation In its past fiscal year, it has been reported that Nike Inc. has spent A 780 million on endorsements. (SMH, 2013.) As a result of many of these celebrity endorsements ‘backfiring’, it could be said that Nike has not spend its endorsement money wisely and has earned itself a negative reputation in return. Nike’s current issue is its sponsorship deals with celebrity athletes. The actions and choices of these athletes have created negative media attention for both themselves and the Nike brand, which they represent. In the past ten years, Nike has had over seven PR issues involving sponsored athletes. These issues have evidently continued to occur, and research into the cause of these issues is needed in order to prevent them from happening in the future. Looking back on the past ten years, it is easy to see a variety of celebrity sponsorship scandals involving Nike. In 2003, sponsored basketball athlete Kobe Bryant was facing sexual assault charges, which put Nike in deep water. Days before the scandal, Nike signed a sponsorship deal with Bryant reportedly worth US40 million. Nike did not terminate his contract, however waited for the stars image to improve before marketing him again. Two years later, Marion Jones was found using drug enhancements. Fortunately, Jones’ contract was just coming to a close when the scandal broke out, and Nike chose not to renew it, given the affect it would have on the brand. Justin Gatlin then became the first sponsored athlete by Nike that had their contract terminated after a doping scandal in 2006 which left him banned from competing for four years. In 2007, football player Michael Vick was found to be involved in dog fighting. Nike then chose to terminate his contract after the negative image he had received from this scandal. The brand then joined up with him again after his reputation improved. One of the most notable sponsorship disasters of Nike was the Tiger Woods sex scandal in November 2009, which left Nike in a difficult position. Due to his offence being separate from his sporting abilities, Nike continued to sponsor Woods, despite the 5
Taylor Newell 17693093 negative media backlash which became an issue for the brand. Lance Armstrong then became a sporting disgrace in October 2012. He was accused, and later proven of doping. This unfortunate situation reflected poorly on the Nike brand, who had previously promoted Armstrong as an athlete who did not use any performance-enhancing drugs. The contract with Armstrong was terminated due to “seemingly insurmountable evidence” (Nike, 2013.) Currently, Nike is facing another issue, after its sponsored Paralympic athlete, Oscar Pistorius was charged with the murder of his girlfriend, Reeva Steenkamp. On Tuesday the 14th of February, 2013, it is reported that Pistorius shot her four times while she was in the bathroom. Previously, Nike had promoted the athlete in a campaign which gave him the unfortunate slogan: ‘I am the bullet in the chamber’. In order to deal with the issue, Nike has currently taken down all advertising on Pistorius’ site with the slogan. On the 21st of February, Nike suspended its contract with the athlete. This response is appropriate given the circumstance, where Pistorius is accused of murder. Future associations with him would be increasingly detrimental to the brand. Nike now needs to work to save its brand from the unfavourable campaign and its slogan, along with its ongoing reputation for poor sponsorship choices which reflect badly on the Nike brand. The Sydney Morning Herald (smh.com.au), News.com.au, and B&T Magazine (www.bandt.com.au) are some of the media sources that have covered the Pistorius issue in their articles. Some of these have been analysed in the article reports. The response of these media releases has been predominantly negative in relation to the Nike brand as they associate past sponsorship issues between Nike and its sponsored celebrities to the current one of Oscar Pistorius. Headlines of some of these articles have been listed in the executive summary. However, while some of them are critical of Nike’s sponsorship choices, some of these articles have included quotes lack thereof from Nike spokesman KeJuan Wilkins who has contributed for the most part in a positive way to the brands image through remarks in articles such as: ‘Nike has no plans for Oscar Pistorius in upcoming campaigns’ (SMH, 2013.) 6
Taylor Newell 17693093 “Wilkins said the wording of the 2007 campaign ‘was in reference to Oscar’s speed and performance on the track. Nike felt it was appropriate to take the ad down from Oscar’s website recognizing the sensitivities of the situation.’” (SMH, 2013.) “Nike spokesman KeJuan Wilkins declined to say whether Nike had previously had any plans for Pistorius, or whether it will remove current advertising that includes him.” (News.com.au, 2013.) “’Nike extends its deepest sympathy and condolences to all families concerned following this tragic incident. As it is a police matter, Nike will not comment further at this time,’ Nike said.” (SMH, 2013.) A further analysis of these articles is shown in the article files and reports within this issue brief to gain a deeper understanding of the issue. This will allow solutions to be drawn in order to prevent the issue from recurring. 7
Taylor Newell 17693093 Article Files Article File 1: Title: Source: Date: Author: Page: “Pistorius joins Nike’s hall of shame” Sydney Morning Herald Tuesday February 19, 2013 Reuters online Copy obtained electronically from smh.com.au 8
Taylor Newell 17693093 Article Summary: This article depicts Nike’s brand in a negative light in response to the Oscar Pistorius case, while mentioning other previous cases where their sponsoring decisions have backfired. It highlights Nike’s choice to not run any future ads of Pistorius. The article cites a Nike spokesman, KeJuan Wilkins and describes the poor choices Nike has made in choosing its celebrities to sponsor. It also highlights Nike’s endorsement spendings which have not ended well on the sponsorships of Pistorius, and the other celebrities mentioned: Lance Armstrong, Tiger Woods, Marion Jones and Michael Vick. The article also gives a brief overview of Pistorius’ murder charge and his previous sporting achievements before his downfall. 9
Taylor Newell 17693093 Article Report 1: Direction of the coverage: This article is fairly negative towards the Nike brand. The title of the article uses a pun as well as negative emotive language to bias the readers opinion of the brand as ‘shameful’. The title is ‘Pistorius joins Nike’s hall of shame’. There are also mentions of Nike’s poor sponsorship decisions, saying Pistorius is the ‘latest sponsored athelete to face trouble’, and how ‘Nike is once again dealing with a publicity problem stemming from a sponsored celebrity’. The article names the other celebrities and their publicity issues: Lance Armstrong, Tiger Woods, Marion Jones and Michael Vick. Nike’s endorsement spendings are also highlighted exposing their financial decisions. Factual accuracy: This article seems to be factual, quoting Nike spokesman, KeJuan Wilkins. However, it does also mention Peet Van Zyl who is on Pistorius’s management company. Van Zyl contradicts the Nike spokesman in regards to the companies choice to have ‘no plans for Oscar Pistorius in upcoming campaigns.’ Van Zyl says, ‘all sponsors are still on board, and they have given us their commitment towards Oscar ’ This statement, although not untrue by the author of the article, may be misleading as Nike could be seen as continuing its relationship with Pistorius when it is in fact no longer using him in campaigns. Despite this, the rest of the article appears to be accurate and based on fact. Point of View: The article seems to be mainly written with a negative point of view towards the Nike brand, highlighting it’s public relations issues with sponsored celebrities and not contributing any positive information to the article in regards to the Nike brand. Additional Information: The main authoritiative people quoted in the article are the Nike spokesman, KeJuan Wilkins, who would have a considerable amount of authority on the issue, along with someone from Oscar Pistorius’s management team, Peet Van Zyl, who gave information for the article, however it seems to be contradicting to Nike’s comments and may not be entirely truthful. 10
Taylor Newell 17693093 Article File 2: Title: Source: Date: Author: Page: “Nike, Oakley move away from Pistorius” News.com.au Tuesday February 19, 2013 AAP online 11
Taylor Newell 17693093 Article Summary: This article summarises the issue by explaining the actions taken by Nike in regards to the Oscar Pistorius issue. The article talks about now Nike has distanced itself from the sports star after being charged with the murder of his girlfriend. The article also includes the brand Oakley who has taken similar steps. Much like the first article, this one has used quotes from Nike spokesman KeJuan Wilkins, who ‘declined to say whether Nike had previously had any plans for Pistorius, or whether it will remove current advertising that includes him.’ It explains how the Nike advertising with the caption ‘I am the bullet in the chamber’ has been taken down because of the ‘sensitivities of the situation’. 12
Taylor Newell 17693093 Article Report 2: Direction of the coverage: The overall tone of this article is fairly neutral in comparison with article 1, as the language used is not bias or emotive. The facts are presented in an unemotional manner as the news article relays the events that have taken place so far. Although the information and situation is negative for Nike, the article does not try to sway the audience into an unattractive view of the brand and its actions in response to the Oscar Pistorius case. Factual accuracy: The information seems to be accurate, with no assumptions being made against the Nike brand. It includes a comment about the Nike spokesman KeJuan Wilkins declining to comment on certain matters of the issue, without using incorrect information. Point of view: The author provides a variety of perspectives on the issue including Nike, Oakley, and Pistorius’ website posts. These are treated objectively without any individual opinion of the author being included. Additional information: An image is used of Pistorius with arms outstretched as he finishes a race. The caption below it reads: ‘Nike says it has no plans to use Olympic athlete Oscar Pistorius in future ad campaigns. This has a large impact on how Pistorius was formely viewed as a ‘sporting hero’ and is now being pushed aside by Nike. On first view, this could not be seen as a positive image for Nike, however once the reader views the rest of the content of the article, there perception of Nike as the negatively viewed brand may change. 13
Taylor Newell 17693093 Article File 3: Title: Source: Date: Author: Page: “Bullet in the chamber’: Pistorius Nike ad pulled after model’s shooting death” Sydney Morning Herald (www.smh.com.au) Tuesday February 19, 2013 Megan Levy online (article shown over the next 5 pages) 14
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Taylor Newell 17693093 Article Summary: This article begins by explaining the actions of Nike after Pistorius was charged with murder. It then includes a quote from Nike and quotes from City Public Relations managing director Tim Allerton who commented on the actions of Nike in this situation. The remainder of the article goes into the current Pistorius investigation and the background story of him and his girlfriend Reeva Steenkamp who he shot and killed. 18
Taylor Newell 17693093 Article Report 3: Direction of the coverage: There are both positive and negative elements to this article. It begins negatively for Nike, with a photo caption saying “Pistorius ad an ‘absolute disaster’”. This use of bias is directing the readers attention to the ‘disaster’ of the campaign that Nike has produced. The rest of the article is relatively neutral in tone, however includes a positive quote from Nike, who issued a statement to the press after the Pistorius incident. The quote said, ‘Nike extends its deepest sympathy and condolences to all families concerned following this tragic incident.’ This positive statement on how Nike responded is even further backed up by City Public Relations managing director Tim Allerton who said it was ‘the right move for Nike to issue a statement of sympathy.’ This outside positive feedback portrays the good decision Nike made when dealing with this issue. Factual Accuracy: All of the information in this article appears to be accurate and in line with the previous articles that have been reported on. The opinions expressed in this article are based on the facts of the Pistorius case so far and the opinions of some interviewed people who are involved in the issue. Point of view: The majority of the article is written about the point of view of City Public Relations managing director Tim Allerton who comments on the issue. There are also views from the author, however non-bias and using factual evidence and interview opinions like the point of view of Nike occasionally in quotes. The different perspectives are treated equally. Additional information: Photos are used in this article of the Nike advertisement and also a video of the television advert for Nike, promoting Oscar Pistorius and using the ironic ‘I am the bullet in the chamber’ slogan. This may reflect poorly on Nike as the slogan now has underlying connotations that link to Pistorius’ alleged murder of his girlfriend Reeva Steenkamp. 19
Taylor Newell 17693093 Article File 4: Title: Source: Date: Author: Page: “Nike pulls ‘Bullet in the chamber’ Pistorius ad” B&T Magazine (www.bandt.com.au) Friday February 15, 2013 B&T online 20
Taylor Newell 17693093 Article Summary: This article is quite brief and explains the incident in relation to Nike’s actions in response to Oscar Pistorius’ charge. The article also touches on how brands are reviewing their sponsorship budgets, which can relate to the large amount of sponsorship money Nike has spend in the past year. Past sponsorship scandals of Nike are then referred to, highlighting the poor sponsorship choices by Nike and its unreliable and changing decisions to either keep or terminate certain athlete’s contracts. 21
Taylor Newell 17693093 Article Report 4: Direction of the coverage: The overall tone of this article is negative for Nike, as it talks about how ‘many brands are reviewing their sponsorship budgets.’ This relates to Nike’s sponsorship spendings over the past year, with large amounts of money being spent on celebrity endorsements that did not work out. The article also talks about Nike ‘which has suffered a number of scandals involving its athletes in recent years’. This quote uses emotive language like ‘suffered’ to portray a negative image of the brand to the public. In addition, other Nike sponsored athletes are then mentioned in regards to the brands changing decisions with different athletes on whether to terminate their contract or stand by them. This shows inconsistency of the brand and portrays a negative image to the public through these comparisons. Bias is clearly used by the author in this case. Factual Accuracy: The accuracy of this article seems to be high, with the information being consistent with the other articles reported on. There is little opinion in the article and no subjective quotes from outside sources. However, this can be detrimental to Nike as their comments were not included in the article and had no way of defending themselves against the information provided which outlines them as a company who makes poor choices of celebrity sponsorships. Point of view: There is only the point of view of the author in this article, which may have underlying personal opinions of the author in the way they have written the article to focus on the issues of the Nike endorsements and not portraying the perspective of the Nike brand, which should be mentioned through its comments to the media. Additional information: Like the other articles, the image of the Nike Pistorius advertisement is shown, depicting the ironic slogan ‘I am the bullet in the chamber’. Again, this may reflect poorly on Nike as the slogan now has underlying connotations that link to Pistorius’ alleged murder of his girlfriend. 22
Taylor Newell 17693093 Recommendations As shown in the article analysis, Nike’s issue has been reported widespread in the media. Because these issues continue to arise, Nike must take action to find the cause of the issue, and solve it. The company must also solve its current public relations crisis involving Oscar Pistorius. This will not be achieved by Nike it it stands by and lets the media die down on its own. It will be managed appropriately to the company’s advantage by communicating to the different publics involved. These publics include: Internal: Communication must improve within the company, in order to create better decision making for Nike’s sponsorships. This may be achieved through staff meetings, board meetings, discussions (online and offline). This way, possible PR crisis management solutions and recovery methods may arise through free- ‐flowing communication. A two- ‐way symmetric model of communication should be followed by the company in order to allow the public to understand Nike’s decisions in choosing/dropping sponsored athletes in times of crisis like the current situation. Media: Nike must respond to the issue at hand through the media. It would be advisable for Nike to make a comment in which Nike recognises the tragic event that has occurred, offers its sympathies to the appropriate groups, acknowledges that the brand has responded by terminating their contract with Oscar Pistorius, and no longer has any affiliation with him or his actions. This type of response immediately broadcasts to the wider community that Nike is both sympathetic to the issue but has taken the right steps to be distanced by the person deemed responsible. Shareholders: Carol Stabile (2000) is critical of Nike’s social responsibility and its affect on shareholders. She believes, ”Nike Corporation irrefutably has created wealth for its 23
Taylor Newell 17693093 owners and shareholders, but its rhetoric of social responsibility- ‐- ‐its self- ‐ presentation of the corporation as a now global citizen- ‐- ‐constitutes a more dubious claim.” (p. 186) Nike’s shareholders need to be assured that the brand’s image is still intact, as well as its share price. The steps the company is taking to retain its reputable identity and its share price should be communicated to shareholders as soon as possible. These issues should be solved through reputation management strategies by public relations staff within the company who would work to make sure shareholders are not negatively impacted by the current issue. Target customers: The target public of Nike, being broad and ranging over many different countries is a difficult stakeholder to manage. Customers, or potential customers need to regain trust and confidence in Nike as a brand. Creating advertising with ‘safe’ sponsored athletes who have a positive image in society would benefit Nike and possibly retain the publics opinion of the brand as one who supports athletic ‘heroes’ who maintain a good reputation within society and in regards to the sport they play. Nike must also take immediate action in times of crisis so to prevent their target public from being influenced by negative media reports in times of crisis for the brand. Responding to issues as soon as possible will reassure Nike’s target customers of their stance on issues affecting their company and hopefully repair any negative opinions of the brand. This is part of Nike’s reputation management. Overall, Nike should take all possible steps to repair the issue affecting its brand and manage its reputation while taking into account the company’s code of ethics when making decisions on sponsorship deals. After its not so perfect track record with sponsorship deals, Nike should look for celebrity endorsement opportunities that provide the brand with positive role models that are unlikely to cause the company any future issues. 24
Taylor Newell 17693093 References AAP. (2013, February 19). Nike, Oakley move away from Pistorius. News.com.au. Retrieved from 1226580763584 B&T Magazine. (2013, February 15). Nike pulls ‘Bullet in the chamber’ Pistorius ad. B&T Magazine. Retrieved from -bullet-in-the-chamber-pistorius-ad BBC News. (2013, February 21). Oscar Pistorius contract suspended by Nike. BBC News. Retrieved from http://www.bbc.co.uk/news/business-21530625 couriermail.com.au. (2013, February 20). Nike suspends its contract with murder accused athlete Oscar Pistorius. Couriermail.com.au. Retrieved from -oscar-pistorius/story-fnduczvk-1226583105768 Isidore, C. (2013, February 21). Nike suspends contract with Pistorius. CNN. Retrieved from e-pistorius/index.html Levy, M. (2013, February 15). Bullet in the chamber': Pistorius Nike ad pulled after model's shooting death. SMH. Retrieved from h-201302152eh3m.html Mail & Guardian. (2013, February 19). Oscar Pistorius ad campaign: Nike won't just do it. Mail & Guardian. Retrieved from campaign-nike-just-wont-do-it McHale, J. P., Zompetti, J. P., & Moffitt, M. (2007). A hegemonic model of crisis communication. Journal Of Business Communication, 44(4), 374- ‐402. Nike. (2013). About nike, inc. Nike Inc. Retrieved from http://nikeinc.com/pages/aboutnike-inc 25
Taylor Newell 17693093 Reuters. (2013, February 19). Pistorius joins Nike's hall of shame. SMH. Retrieved from es-hall-of-shame-201302192eo5f.html Rushton, S. (2013, February 21.) Nike's bullet ad with Pistorius backfires. CNN. Retrieved from us-nike Stabile, C. A. (2000). Nike, social responsibility, and the hidden abode of production. Critical Studies in Media Communication, 17(2), 186- ‐204. Retrieved from ntid 36155 Sports Dump. (2013, February 24). The Nike Curse: Pistorius, Tiger Woods , Marion Jones , Kobe. The WorkZine. Retrieved from istorius-tiger-woods-marionjones-wayne-rooney Sydney Morning Herald. (2013, February 20). Sponsors Nike, Oakley sever ties to Pistorius. Sydney Morning Herald. Retrieved from ever-ties-to-pistorius20130220-2eq7u.html Wall, M. (2013, February 21). Pistorius fall-out: The perils of sports sponsorship. BBC News. Retrieved from http://www.bbc.co.uk/news/business-21472843 26
3 Nike's bullet ad with Pistorius backfires - CNN (2013) 3 Nike suspends its contract with murder accused athlete Oscar Pistorius - couriermail.com.au, (2013) 3 Nike pulls 'Bullet in the chamber' Pistorius ad - B&T Magazine, (2013) This is a significant issue for Nike's reputation globally as sponsorship issues continue to occur.
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