League sponsors weigh options as NFL begins investigation into Rice video

By , , on September 12, 2014


After the TMZ video made its way around the Internet, the Baltimore Ravens cut Rice and the league suspended him indefinitely. Rice was originally suspended for two games and coaches and others had praised his behavior since the arrest for striking his then-fiancee in February. Screenshot from Youtube.
After the TMZ video made its way around the Internet, the Baltimore Ravens cut Rice and the league suspended him indefinitely. Rice was originally suspended for two games and coaches and others had praised his behavior since the arrest for striking his then-fiancee in February. Screenshot from Youtube.

Major brand sponsors are watching closely to make sure the National Football League doesn’t fumble the investigation into how its executives handled evidence in the Ray Rice domestic violence case.

For big companies like Anheuser-Busch, General Motors and Procter & Gamble, an NFL sponsorship is a coveted prize. The deals can cost up to $10 million per brand, but they deliver eyeballs. An average of 17.4 million viewers watched professional football games during the 2013 season, according to Nielsen. Now that the NFL is investigating how its executives handled a video showing Baltimore running-back Ray Rice hitting his then-fiancee, sponsors are forced to balance the exposure NFL games can offer with the risk of alienating customers.

On Wednesday, the NFL said it hired former FBI Director Robert S. Mueller to lead the investigation. Commissioner Roger Goodell previously said no one at the NFL had seen the tape before it surfaced on Monday, but the AP reported Wednesday that a law enforcement official sent the tape to the organization in April.

With the investigation just beginning, experts say there is little else sponsors can do but take a wait-and-see approach.

“These situations often develop and change direction very rapidly, so sponsors need to be incredibly agile,” said Allen Adamson, managing director of branding firm Landor Associates. “What’s true right now may not be true in two hours, so (sponsors) will have to monitor how the NFL reacts, and then how consumers react to the reactions.”

When a scandal hits an individual athlete, brands usually move swiftly to cut ties. Nike severed its relationship with Rice after the video surfaced. Video game maker Electronic Arts said it would scrub Rice’s image from its latest Madden ‘15 release.

But no sponsor company has said it will end its relationship with the NFL—yet.

“Obviously all the sponsors are incredibly worried, but it’s hard for a sponsor to disconnect from the entire NFL. It’s so important to business,” said Atlanta-based marketing consultant Laura Ries. “If Roger Goodell had any sponsors he’d probably lose those, but there’s no one person attached to this.”

TD Ameritrade said the company has received little reaction from clients about its NFL sponsorship.

“This incident brings to light a disturbing act that we believe is wrong, and while the NFL has, admittedly, not done everything right, we hope that it will quickly learn from its mistakes and work to improve a culture that values the inclusion, safety and respect of its employees and their families,” the company said in a statement. “This means holding people fully accountable for their actions and the consequences associated with them.”

TD Ameritrade said the company is not making changes but added that “as with any sponsorship, media buy, etc., we carefully monitor the effect it has on our business and brand, and if we feel those assets are being compromised, we’ll make the appropriate decisions.”

General Motors, a sponsor since 2001, has no plans to change its advertising on NFL games because of the Rice case, said spokeswoman Ryndee Carney.

Carney said she was not aware of the company receiving complaints about its football advertising. GM said it supports the NFL’s decision to conduct an investigation. “We will continue to monitor future developments regarding this issue,” Carney said.

FedEx also said it is monitoring the situation.

“We are watching developments in this matter closely and we are confident that the League will take the appropriate steps,” said Patrick Fitzgerald, senior vice-president of marketing and communications at FedEx.

Other large NFL sponsors, such as Pepsico, Anheuser-Busch and Procter & Gamble, did not respond to requests to comment or declined to comment.

For now, analysts don’t expect a big change in viewership during NFL games.

“Games will go on and fans will—for the most part—want to watch,” Ries said.