It was not a good week for Olympic swimmer Ryan Lochte, who recently admitted to fabricating a story that he and his teammates were held at gun point during the Olympic games in Rio De Janiero.
It was announced that Speedo U.S.A, Ralph Lauren, mattress company Airweave and hair-removal company Syneron-Candela have removed their sponsorships.
Speedo U.S.A. said in a statement: “While we have enjoyed a winning relationship with Ryan for over a decade and he has been an important member of the Speedo team, we cannot condone behavior that is counter to the values this brand has long stood for.”
Was it the right move for brands to take in removing their sponsorships?
Robert Passikoff, Founder and President of Brand Keys, Inc., said it was absolutely the right move.
“It’s what you call the pitchfork effect, I know that there is a certain level of corporate social responsibility that brands want to involve themselves with, the reality is that all of these of these brands that support the Olympics, are not doing it out of the goodness of their heart,” said Passikoff. “People who look for sponsorships, that is just another income stream for them, the brands are looking for the halo effect, they want all the good values these athletes can bring to their brand.”
For example, Speedo U.S.A. announced in a message on Twitter that it would donate $50,000 portion of Lochte’s fee to a charity to help Brazilian children.
Passikoff said why would brands want to be associated with someone who is a liar?
“Do you want real gold or fool’s gold,” said Passikoff. “Ryan seems to be pathological, why would you want your brand associated with that behavior?”
Passikoff said that he bets 90% of consumers couldn’t tell you who he was working for anyway, not everyone is Michael Jordan.
“It wasn’t an over exaggeration, and I don’t want my brand associated with that,” said Passikoff.
Passikoff said the consequences of brands not severing ties with a celebrity who does something badly in the public eye is that they run the risk of being tarred with the same brush.
Passikoff added that with the big selection of athletes, why would a brand deal with someone who is looking bad and makes the brand look bad.