December 14th, 2007

Scandal to Alter Old Ad Game

By Mary Ellen Podmolik
Chicago Tribune

Named players likely to lose marketability

When Chevrolet presented Mets catcher Paul Lo Duca with a Roberto Clemente Award in September, it was meant to recognize his baseball skill and community involvement with literacy and cancer groups.

There was no mention of steroids.

But Lo Duca, along with 86 other current and former Major League Baseball players, was named Thursday in former Sen. George Mitchell’s long-awaited report on the extent of use of performance-enhancing drugs in America’s pastime.

“We didn’t know that when we awarded that to Mr. LoDuca,” said Chevrolet spokesman Terry Rhadigan, adding that the automaker tries to align with people that represent its values.

With the release of Mitchell’s 409-page report on players’ use of steroids and other performance-enhancing drugs, the reputations of numerous players, as well as the sport, are uncertain. That puts corporate marketers in an awkward spot because many of the players in the report have done endorsements tied directly or indirectly to major consumer brands.

Most endorsement contracts contain morals clauses that enable marketers to quickly disassociate themselves from someone who no longer is seen as a role model for the brand. In some instances, that may mean companies can cut players loose immediately, before they are determined to be innocent or guilty.

But the situation is potentially trickier for marketers to assess because to some extent all of baseball is under a cloud. Mitchell pointed a finger Thursday at the entire baseball establishment, citing a “collective failure” to take responsibility for “the steroids era.”

“Companies are partnering with athletes hoping to leverage their relevance,” said Jerry Manuel Jr., director of player marketing at sports management firm CSMG, Chicago. “Any time that player’s integrity or honor is questioned, it will have a net adverse effect.”

Some of the biggest brands, names like MasterCard International, Bank of America and Pepsi-Cola, are official sponsors of Major League Baseball.

Experts said most will take a wait-and-see approach, gauging how the revelations affect fans before making any decisions.

“I don’t think they’ll go into panic mode,” said Jim Andrews, a senior vice president at IEG in Chicago, a sports sponsorship consultancy. “Marketers tend to follow, rather than lead, in these situations. They’ll take the temperature of baseball fans and see what their reaction is. No one is going to come out tomorrow and say, ‘We are getting out of baseball.’

“Does the anger turn into ‘We’re not going to buy merchandise, buy tickets and watch the games on TV’? That’s the bread and butter for advertisers.”

DHL staying in lineup

One corporate sponsor of baseball, DHL, said it was sticking by the sport.

“We are very committed to Major League Baseball,” said spokesman Richard Gibbs. “Obviously, the actions of a few individuals don’t impact overall what baseball means to the U.S. It is America’s pastime.”

“The issue,” he added, “is not a new one.”

Indeed, much of the Mitchell report focuses on activities before drug testing began in 2003, which could be a mitigating factor in the way some people look at the game today.

By far, the most high-profile name on the list is star pitcher Roger Clemens. His accomplishments on the mound have made Clemens a marketer’s dream as a pitchman, and this year he’s earned $3.5 million in endorsements, according to Sports Illustrated.

His deals have ranged from endorsing a small Ohio company’s pitching glove to a spot for AT&T in which a dropped call between Clemens and his wife seemingly sends him back to pitch with the Yankees. The spot has been viewed more than 82,000 times on YouTube.

“Our advertising which featured Roger Clemens concluded in early November. Beyond that, we have no comment,” said AT&T spokesman Michael Coe.

Clemens also has been featured in tongue-in-cheek promos for ESPN’s SportsCenter.

Clemens’ lawyer issued a denial to the allegations in the report, but that may not matter to marketers.

“Since he is a central figure in this report, his marketability pretty much goes to zero,” said Andrews. “I don’t see why a company at this point would want to associate with him. From a marketer’s standpoint, I can’t think of any reason you’d want to be associated with these people.”

In Lo Duca’s case, the Mets catcher was cited by Chevrolet for charity work that included taping a public service announcement that benefited the American Cancer Society. Mitchell said in his report that Lo Duca, who signed a $5 million deal with the Washington Nationals this week, declined to meet with him. Lo Duca couldn’t be reached Thursday.

Finding new faces

Madison Avenue now will likely look for a new set of names to help put a face on their companies and may further develop the practice, already used by such companies as Nike, of using multiple athletes, rather than just one, in their marketing campaigns.

“Advertisers will become skittish,” said Steven Levitt, president of Marketing Evaluations Inc., which develops Q scores on celebrities, rating their consumer appeal for marketers. He said they will steer clear of anyone on the Mitchell list, and then look for the basic desirable qualities, including “who appeals to the right demographics and who’s well enough known.”

Early in the 2005 baseball season, a few brands turned the flap over steroid use into fodder for their marketing campaigns. Nantucket Nectars ran an ad in USA Today that trumpeted its juices were “bulked up legally.” And in ESPN The Magazine, an ad for Altoids mints noted, “Role models don’t abuse Altoids.”

That points to the enduring value for marketers of connecting to sports like baseball.

“It’s high risk, high reward,” Manuel said. “Guys are still going to get the endorsements because they just have such influence on the market. It’s just going to be fewer and far between.”

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Companies may soon shy away from trying to obtain endorsements by baseball players listed in the report on steroid use. A look at some of the well-known players named in the investigation and products they’ve aligned themselves with in recent years: Player ROGER CLEMENS Team (2007) New York Yankees 2006 endorsement income $3.5 million Endorsements (recent years) The Rocket’s latest high-profile plug has been a spot for AT&T/Cingular. Other recent Clemens deals have included Coca- Cola, H-E-B, AutoNation and J&J Snacks.

Player BARRY BONDS Team (2007) San Francisco Giants 2006 endorsement income $2 million Endorsements (recent years) Bonds’ popularity with advertisers, such as KFC, crashed following the 2003 BALCO scandal. Other than a baseball card deal with Topps, Bonds’ income is largely from signed merchandise.

Player JASON GIAMBI Team (2007) New York Yankees 2006 endorsement income $500,000 Endorsements (recent years) Several of Giambi’s deals, including Nike, Pepsi and Arm & Hammer, were ended after the BALCO story broke. After a comeback season in 2005, Giambi signed a multiyear deal with Reebok.

Player ANDY PETTITTE Team (2007) New York Yankees 2006 endorsement income $500,000 Endorsements (recent years) During his 2006 season in Houston, Pettitte joined Clemens in a spot for the H-E-B grocery chain. Pettitte is also one of several players who endorsed Reebok’s Velo shoe.

Player ERIC GAGNE Team (2007) Boston Red Sox 2006 endorsement income NA Endorsements (recent years) Along with other international players, the French Canadian appeared in a famous 2001 “Take Me Out To The Ballgame” Nike ad. As an L.A. Dodger, Gagne filmed a spot for Husky trash bags.

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