Tennis: Maria Sharapova-Press Conference

Maria Sharapova, Lance Armstrong, Tiger Woods, Michael Vick, Manny Pacquiao, Ray Rice, Oscar Pistorius.

What do all these athletes have in common?

Two things: Nike and screwed-up-royally.

This could all be a story about the higher you climb, the further you fall.  But in the world of media value these athletes were tier 1 endorsements for Nike that went terribly wrong. Only Tiger Woods has survived, and barely at that as Nike scrambled to back-fill Woods’ endorsement position with McIlroy and at least 10 other top professional golfers.

I guess it’s always good to have a plan B.

But I’m writing today about Nike’s latest dropout – Maria Sharapova. First, let’s put a dollar figure on Ms. Sharapova’s media value to Nike, TAG Heurer, Porsche and others. I don’t know what they’re paying her for the actual endorsement contract, but her cumulative 12-month media value to these brands was $6.3 million.

When you screw up and take a banned drug (Armstrong and Sharapova), or run a dog-fighting ring (Michael Vick), or brutally assault your fiancee (Ray Rice) or make anti-gay slurs in the press (Pacquiao), you put your endorsement brands in jeopardy. The smart brands drop you FAST. But there’s still a price that these brands pay.

After Sharapova announced that she had failed a drug test at the Australian open, she immediately erased $6.3 million in future earned media exposure for her sponsors. Reportedly, Nike was already paying Sharapova $12.5 million annually for her endorsement, so it looks like they were getting roughly half what they paid for.

But unlike the Armstrong case, which dragged on for what seemed like eternity before Nike and others severed their endorsement ties, this time around Nike and others were quick to suspend their contracts with Sharapova, limiting their losses and distancing themselves from what was a lucrative media opportunity.

Making matters worse, Sharapova’s February media ratings were off -14 points at 47, a new rating low for what many consider to be the highest-paid female athlete.

There are a few takeaways here. Right or wrong, the failed drug test will cost Sharapova at least $6.3 million in marketable media value. For Nike, at $12.5 million annually, you may have overpaid for your endorsement contract. Nike, TAG, and Porsche can also quantify the forgone future media value for the Sharapova, and move to fill the gap with a solid dollar value in mind.