Can O.J. Simpson Get His Sponsors Back, as A-Rod Loses His?
In the 1970s, the Hertz Global Holdings Inc. (HTZ) commercials were all over television. Arnold Palmer and O.J. Simpson would slide into a new rental car and drive off, satisfied, into the sunset together. Simpson has gotten parole for some of his crimes. Unfortunately for him, he will stay in jail for now. That does not mean he will be without endorsement deals in the future, if he becomes a model citizen.
Endorsements by athletes have become risky business recently. Just ask Nike Inc. (NKE), which had deals with Tiger Woods, Alex Rodriguez and Lance Armstrong. Only Woods's deal has survived. Likely hundreds of millions of dollars have gone down the drain as the shoe company has done its best to distance itself from the three. Kobe Bryant has a tremendous endorsement package, which may have made some of his marketing partners, including Nike, think twice when he was charged with assault. Fortunately for both him and those clients, the case died quickly.
The news that as many as 17 major league baseball players could be banned shortly for use of performance-enhancing substances will be a nightmare for dozens of sponsors. According to CBS, some top players are involved:
Three 2013 All-Stars could face bans: Texas outfielder Nelson Cruz, San Diego shortstop Everth Cabrera and Detroit shortstop Jhonny Peralta.
The issue is not new. The history of liars and cheats in baseball goes back to the Black Sox Scandal of 1919 at least. Rodriguez is not the first player to be banned and will not be the last.
Companies quickly are running out of options to get top athletes who can endorse their products, because so many of these "heroes" have legal problems or have been involved in scandalous behavior. That leaves these companies with a marketing challenge and nowhere to go.
But O.J. Simpson may be out of prison in a few years -- one of the greatest endorsers in athletic history back on the market again.
