$20 Million a Year in Product Endorsements


Sex Assault Allegations Cast Shadow of Uncertainty Over Endorsement Deals

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NEW YORK (AdAge.com) -- While Nike, McDonald's and other companies that have a commercial relationship with Kobe Bryant were keeping mum in the wake of his arrest
Photo: AP
Product endorsement star Kobe Bryant may be put on ice by his sponsors until the outcome of his case is known.
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for sexual assault, marketing experts say ad campaigns featuring the basketball superstar will be put on ice until the outcome of the case is known.

Mr. Bryant was arrested July 1 in Eagle, Colo., accused of sexually assaulting a 19-year-old woman at the Lodge & Spa at Cordillera, a resort in Vail Valley. Mr. Bryant was in town to undergo arthroscopic surgery on his knee. Prosecuters say they will decide this week whether to file charges.

$20 million a year
Mr. Bryant has endorsement deals with Nike Inc., McDonald's Corp., Coca-Cola's Co.'s Sprite, athletic equipment-maker Spalding and Upper Deck trading cards that net him an estimated $20 to $22 million a year.

None of the marketers would say whether any campaigns involving Mr. Bryant would be pulled, but sports marketing experts suspect that will be the case.

"No question," said Brandon Steiner, of New Rochelle, N.Y.-based Steiner Sports Marketing. "They'll do it subtly, but they'll do it. It will be just like the Magic Johnson ads that suddenly disappeared when he announced he was HIV positive [in 1991]. Marketers don't want to be put in that spotlight."

Risk of celebrity endorser
They do not necessarily think that marketers will terminate their contracts on the basis of the accusation, however, particularly given Mr. Bryant's wholesome image. David Carter, president of The Sports Business Group in Los Angeles, is one who believes Mr. Bryant's reputation is such that he'll be given more leniency in the court of public opinion. "But," Mr. Carter cautioned, "that's the risk marketers take with celebrity endorsers."

Added another sports marketing expert: "It's possible the spots will go away for a while, but these companies have to be careful. Any change in what they're doing might be perceived as an admission that [Mr. Bryant] is already guilty, and they surely don't want that reputation, either."

Tepid support
The marketers offered short statements and tepid support for Mr. Bryant, whose off-the-court conduct prior to the allegation had been impeccable. A Coca-Cola Co. spokesman would only say that the company is aware of the circumstances and is monitoring the situation.

A McDonald's spokesman said, "We have a relationship with Kobe Bryant. However, it would be inappropriate to discuss pending legal matters." Mr. Bryant is currently in the third of a three-year agreement with McDonald's. McDonald's wouldn't confirm whether Mr. Bryant's contract included a morality clause.

Mr. Bryant signed a five-year, $45 million endorsement deal with Nike last month, but the sneaker giant has yet to involve him in any ad campaigns or introduce a signature shoe line. A Nike spokeswoman said: "We are pleased to be working with Kobe Bryant. He's a great player. As this is a legal matter, you will understand that we cannot comment further at this time."

Mr. Bryant has also appeared in the ESPN "Which SportsCenter do you watch?" campaign, further portraying himself as a family man in a print ad that shows him at a department store holding an arm-load of Pampers while catching a glimpse of SportsCenter on a nearby TV. Mr. Bryant and his wife had a baby in January.

No stars for New Balance
Some companies, such as Massachusetts-based New Balance, claim that such cases as Mr. Bryant's are one of the main reasons they do not pony up for celebrities. New Balance, maker of sneaker and athletic apparel, gave up on athlete endorsers in the early 1990s. The company stopped that policy soon after another Los Angeles Lakers star and New Balance endorser, James Worthy, was arrested in 1990 for soliciting a prostitute.

New Balance currently uses the tagline "Endorsed by No One" in its advertising.

"One of the main reasons we stopped doing it was we couldn't find any proof it was selling any more product," said New Balance spokeswoman Katherine Shepard. "But it was also clearly beginning to be understood that you can't dictate a person's behavior, especially over the long haul, and young kids were looking up to these players as heroes."

'Street credibility'
Ironically, some speculate that Mr. Bryant may now have gained the "street credibility" he once lacked in urban communities because of his wholesome image.

"Well, it may very well turn out that he has credibility on the street," Mr. Steiner said. "But not on the street that I do business on. Not on Madison Ave."

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Kate MacArthur and Hillary Chura contributed to this report.

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