March 10, 2011
Sponsor dumps a whole league? Unprecedented
By STEFANIA MORETTI, QMI Agency
Air Canada may shake up the sports sponsorship business with its threat to pull financial support from the NHL.
If it does so, it would be ending a multi-team relationship once considered a less risky business proposition than backing individual athletes.
Sponsors have been quick to drop endorsement deals with athletes over scandals that threaten to tarnish their brand and message, but it's virtually unprecedented for a backer to drop an entire league, an expert said.
Air Canada said it would withdraw support over the NHL's handling of life-threatening injuries after Montreal Canadiens winger Max Pacioretty was sent to hospital with a fractured vertebra and a serious concussion Tuesday following a blow from Boston Bruins defenceman Zdeno Chara. The NHL did not fine or suspend Chara, saying he didn't target the head, leave his feet or deliver a dangerous hit.
It's not uncommon for sponsors to bow out of endorsements. Look no further than the sagas of golfer Tiger Woods, basketball star Kobe Bryant or NFLer Michael Vick, each of whom lost millions in lucrative contracts from the likes of Gillette, McDonald's and Nike.
Examples of companies pulling the rug from under a professional sports team in the midst of a media hailstorm are fewer and farther between.
In 2009, Formula One racing's Renault team lost its title sponsors ING and Spanish insurance firm Mutua Madrilena after a driver was involved in a deliberate crash.
But sponsors ditching an entire league? Bill Chipps, a sports marketing expert and spokesperson for global sponsorship consulting firm IEG, can't think of a single instance where that has happened in his 15 years experience.
"I can't think of any other examples like this," he said.
"Whenever a company inks an endorsement deal with a celebrity, that relationship, I think, carries more risk than a traditional sponsorship of a team or league," he said, adding that league contracts are usually a safe investment.
"The reason is sports teams and leagues and other types of organizations depend on sponsorship dollars."
Air Canada could be walking a slippery slope.
"To have a sponsor have a major influence on what the sports league should or should not do from an operational perspective kind of crosses the line," Chipps said.
Air Canada also runs the risk that another airline is waiting in the wings, eager to have its name adorn the home of the Toronto Maple Leafs and be the official carrier of 11 teams including all six Canadian franchises. Air Canada pays an estimated $1.5 million for the naming rights to the Air Canada Centre in Toronto.
NHL sponsorship representatives will participate in IEG's conference next week in Chicago called "Return on Engagement: Sponsorship's Impact on Business" along with other organizations and companies from around the globe.