ETH 301 MOD 1 Case Study
John H. Burch
1. Should the companies that dropped Tiger Woods during his scandal now reinstate him?
Image and credibility are everything when it comes to marketing effectively using celebrities as role models. The fact is the image of a celebrity can be tainted within a matter of minutes. Take, for instance, the latest events concerning Tiger Woods. While, by law, he was innocent until he admitted his immorality, companies such as Gillette, Gatorade, Accenture, and AT&T quickly began pulling endorsement deals. The companies feared the bad publicity and the negative image. Consumers could now associate Tiger Woods a sex scandal. Not all of these companies admitted openly that this was the reasoning behind their decision to disassociate themselves from Tiger, but as a consumer, I don’t conceal my approval or opinion that they made the correct decision. I absolutely do ...view middle of the document...
Could there be a chance that you have no idea who Tiger is or what he dose as a profession. After the media’s coverage of his personal life the world knew he committed adultery.
Today, almost all big name endorsement contracts contain a moral clause that allows companies to exit without penalty in the event of an incident by their spokesperson. Many types of agreements (naming rights, sponsorship, and certain kinds of employment agreements, to name a few) will contain a so-called “morality clause,” granting the company the right to terminate the agreement if the clause is breached. Morality clauses prohibit certain types of behavior by a company or individual. The scope of prohibited conduct can vary significantly. Older agreements tend to have very specific morality clause provisions; for example, being charged with a criminal offence. More recently, however, morality clauses tend to be general; requiring the person or company to refrain from conduct that would bring him, her or it into public disrepute.
The challenge with negotiating morality clauses into agreements typically has been one of leverage. The higher the profile of the spokesperson or the amount of the donation, the greater leverage that party has for refusing to sign an agreement with a broadly-drafted morality clause. But, in the wake of some of the recent scandals, most significantly Tiger Woods, going forward, I think we are going to see broadly-worded morality clauses as standard fare in these type of contracts. I suspect no one, not even a charity receiving a large gift with associated naming rights, is going to be shy in asking, in fact, demanding, a broadly-drafted morality clause in its agreement. Call it the Tiger Wood legacy. As a side-note, not surprisingly, given the large amounts of money that can be involved in these types of agreements, so-called “death and disgrace insurance” now is available to protect a company’s investment.
It is up to them really, but I don't think so. He has done nothing to show he has changed his ways and he himself is a damaged brand. These multi million dollar companies have to show they have moral standards and that they disapprove of Tiger's behavior.