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Maria Sharapova

Sharapova sponsor exodus highlights the cut-throat world of sports marketing

Maria Sharapova

Despite claiming she didn’t knowingly take a banned drug tennis star Maria Sharapova has been dumped by many of her sponsors, highlighting how cut throat sports marketing is becoming in an era of scandal.

The world’s highest paid female athlete admitted “she let the sport down” in a slick public revelation that she had failed a drug test at the Australian Open due to a substance taken for health issues. Taking the initiative may be the right move when it comes to softening the impact of the scandal on Sharapova’s reputation but it’s not been enough to convince her high-profile backers to stick with her.

Nike, scarred by the Lance Armstrong scandal, was first to suspend its ties with the 28 year-old Russian, swiftly followed by Porsche and Tag Heuer’s decision not to renew its deal.

It’s pretty standard practice for sponsors to put out an initial ‘holding’ statement when any sort of crisis develops involving athletes, teams or competitions. However, in the case of all three brands, there’s arguably been a ruthlessness and detachment underpinning their decisions that has been devoid of the procrastination and outright indifference that tainted how others have reacted to similar scandals.

These sponsors demand performance for cash and so are evidently prepared to desert athletes in an instant the moment that union is threatened.

“The tide is turning in the sponsorship world and brands are taking issues into their own hands,” said Steve Martin, chief executive of M&C Saatchi Sport and Entertainment.

“Sharapova has been at the top of her game for a long time and her and her team should know exactly what she’s taking so I’m not sure she can play the naivety card.”

A precedent has been set in recent months with the IAAF doping allegations and this is another example of brands being more confident in taking the initiative when scandals break.

Joel Seymour-Hyde, vice president of strategy at sports marketing firm Octagon, pointed out that Nike’s quick fire reaction to the news is based on its performance association with Sharapova rather than just a personality one.

“Nike is a performance brand and when they partner with athletes it’s about performance as well as personality so this affects them more than many of her other sponsors. Even though the offense appears to be of a lesser severity Nike has taken the safety first option of suspension.”

Sponsors clearly yield more power now with the athlete endorsements and they know it. Sharapova earns more than $20m in endorsements each year, dwarfing what she earns in her tennis winnings.

Nigel Currie of sponsorship consultancy firm NC Partnership, said sponsors react far quicker now that what they would have done even five years ago and the reason for this is because competition between brands is more intense.

“Nike and Adidas don’t have the strangle hold like they used to,” he added.

The emergence of companies like Under Armour and New Balance has stepped up competition between brands and Nike and Adidas have to be more careful in managing their relationships with athletes as a result.

Nick Meakin, business development director at Pitch, said Nike’s almost immediate reaction to the announcement “is a marked change of approach for the US sportswear company” and its move to suspend her contract within 12 hours of the revelations suggests “detailed prior knowledge of the announcement.”

He added: “Beauty brand Avon and Evian are just two brands that use the Russian as a lifestyle and beauty ambassador rather a performance one, and it will be very interesting to see how they react to her failed test.”