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Nike's Endorsement Problem


By Rick Horrow and Karla Swatek

February 22, 2013

For the second time in four months, Nike has had to distance itself from one of its major endorsers after an international scandal.  First was Lance Armstrong and doping, now comes the disturbing murder charge against Oscar Pistorius, the South African who last summer became the first amputee runner to compete in the Olympics.  Nike already has pulled ads featuring Pistorius, and an official end to their partnership could be forthcoming.

The downfalls of Armstrong, Pistorius, and Tiger Woods before them indicate Nike’s track record of vetting its endorsers is subpar.  This is particularly troublesome when high profile scandals cause the company’s stock price to fall and shareholder value to disappear.  While tougher background checks may help identify more questionable endorsers, ultimately, this problem might be Nike’s own doing.  Nike’s $2.4 billion annual marketing budget allows it to pursue any and all athletes as endorsers.  Both championship-winning and disgraced athletes most likely endorse Nike products.

And when that disgraced athlete is of Oscar Pistorius’ stature, the effects are costly.


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