Why Nike Suspended their Contract with Maria Sharapova | Summary and Q&A

TL;DR

Maria Sharapova announced that she has been taking a banned substance, meldonium, leading to immediate suspensions of sponsorship deals by Nike and Porsche.

Key Insights

• 🤕 Maria Sharapova's admission of taking a banned substance has led to the loss of sponsorship deals, particularly from Nike, who wants to distance themselves from cheating athletes.
• 💍 Companies include clauses in sponsorship contracts to protect their brand and avoid being associated with athletes who engage in illegal or damaging activities.
• 🧚 Nike's focus on performance-driven products makes it important for them to dissociate from athletes who may not have achieved success through fair means.
• 🛟 The inclusion of performance-enhancing drugs clauses in contracts is a relatively recent development in comparison to other clauses aimed at preserving an athlete's image and reputation.
• 🚙 Sponsorship contracts tend to become more complex as the monetary stakes involved increase in professional sports.
• 🚬 Smoking and similar behaviors that impact athlete performance are generally discouraged and could harm an athlete's image and sponsorships.
• 👏 The use of meldonium by Sharapova raises concerns about the effectiveness of doping tests and calls into question the potential prevalence of performance-enhancing drug use in professional sports.

Transcript

Chris Hill: No one I know is as big a fan of tennis as you are. And the tennis world crossed over into the business world this week with the news that Maria Sharapova, fair to say one of the five best players in women's tennis over the last decade? Bill Barker: Certainly. Hill: Maria Sharapova called a press conference, which, when it was called, a... Read More

Questions & Answers

Q: Why did Nike and Porsche suspend their sponsorship deals with Maria Sharapova?

Nike and Porsche suspended their relationships with Sharapova because they did not want to be associated with an athlete who may have gained success through cheating. This aligns with Nike's desire to have customers buy their products based on their performance, not the athletes who endorse them.

Q: When did companies start including clauses in sponsorship contracts to address issues like doping?

It is unclear exactly when these clauses were introduced, but it is likely they have been included for decades. These clauses were likely added to prevent companies from being associated with individuals who damage their brand or engage in illegal activities.

Q: Can performance-enhancing drugs clauses be traced back to a specific case?

A notable early case involving specific clauses in a contract was Michael Jordan's contract negotiations with the Chicago Bulls in the 1980s. The contract included a clause that prohibited Jordan from participating in activities like pickup basketball, highlighting the desire to protect players' health and prevent brand damage.

Q: Do athletes still engage in activities that could damage their performance, like smoking?

While it is difficult to know for certain, it is likely that some athletes still engage in activities like smoking. However, companies are less likely to tolerate such behaviors due to their negative impact on performance and health.

Summary & Key Takeaways

• Maria Sharapova held a press conference to reveal that she has been taking the banned substance meldonium, which is meant to treat heart disease but has performance-enhancing effects.

• Nike and Porsche, two of Sharapova's sponsors, suspended their relationships with her due to concerns of being associated with an athlete involved in doping.

• Many companies include clauses in sponsorship contracts addressing issues that could damage their brand, with performance-enhancing drugs being a recent addition.