In the wake of Maria Sharapova’s admission that she failed a drug test for the newly banned drug meldonium, three brands have suspended their relations with the tennis star. Following news that Nike would put Sharapova’s sponsorship on hold for the time being, Tag Heuer and Porsche have also said they would cut ties with her.
This story first appeared in the March 9, 2016 issue of WWD. Subscribe Today.
“Maria Sharapova was under contract with Tag Heuer until Dec. 31st, 2015. We had been in talks to extend our collaboration,” said a spokeswoman for Tag Heuer. “In view of the current situation, the Swiss watch brand has suspended negotiations.”
A spokesperson for Porsche said, “The contract is still valid. We just won’t be using her until the situation is clarified by the International Tennis Federation, which should be in May.”
Executives at Porsche also noted Tuesday, “We are saddened by the recent news announced by Maria Sharapova. Until further details are released and we can analyze the situation, we have chosen to postpone planned activities.”
Late Monday, Nike acknowledged it was taking a time out and distancing the brand from the five-time Grand Slam winner, by issuing the following statement: “We are saddened and surprised by the news about Maria Sharapova. We have decided to suspend our relationship with Maria while the investigation continues. We will continue to monitor the situation.”
Earlier in the day Sharapova acknowledged at a press conference that she had tested positive for the banned drug at this year’s Australian Open. The tennis ace said she was notified by the International Tennis Federation a few days ago and she “takes full responsibility.”
Sharapova said her family doctor had prescribed the medication, which she had been legally taking for the past 10 years. As of Jan. 1, meldonium became a controlled substance under ITF rules, but Sharapova said she had not known that. Closing her brief public statement, the 28-year-old tennis pro said she hoped not to end her career this way.
In late January, NetJets, a Berkshire Hathaway company, signed up Sharapova as a brand ambassador with a focus on social media. Aside from having more than two million Twitter followers, the former Olympian, a NetJets owner since 2004, planned to provide exclusive experiences for NetJets owners throughout the partnership. A NetJets spokesman said Tuesday that a decision had not yet been named about the situation.
With an estimated $29 million in endorsement deals last year, Sharapova has been one of the most successful endorsers in sports, according to Rick Burton, the Falk professor of sports management at Syracuse University. Describing the tennis star as “a bright light on the [pro] tour,” he expects an ITF-issued penalty but most people will probably give her “a hall pass.”
“Depending on the morals clause they had in her contract, this may give the brands she works with some leverage to not have to pay perhaps the annual increase that she has traditionally benefited from. I’m guessing that every year or with every contract renewal she has been able to raise her price,” Burton said. “This may give those organizations the option to say, ‘OK Maria, here’s the trade-off. We’ll stay with you to avoid the embarrassment of dropping you but we’re not going to pay a premium, because you violated your morals clause.’ Somebody could say say, ‘Hey, we weren’t using her that much anyway, so we will drop her.’ But I’m not expecting that.”
“There just aren’t many other alternatives. They are out there, but there are not many and they are certainly not of her magnitude. So if you say, ‘Well, we’re going to drop her.’ Who are you picking up who is going to have half of the appeal that she has?” Burton said. “There just is not a range of alternative choices, who are probably going to combine her glamour and her success. You can pick up an unknown, someone who isn’t glamorous, but it’s hard to probably find someone who is going to give you the package that she does.”
Mary Jo Kane, director of the Tucker Center for Research on Girls & Women in Sport at the University of Minnesota, speculated about the reaction of Sharapova’s corporate sponsors. She said Tuesday, “It is very hard to say whether or not this is a negotiating ploy on the part of her corporate sponsors who see this as an opportunity. You know she’s made a mistake, she’s vulnerable and one might think it’s not fair, but all is fair in renegotiating contracts. Corporate sponsors are going to look at what’s in their best interests’ bottom line. If this gives them enormous leverage in renegotiating their contract, of course they’re going to use that.”
Kane noted how Nike was one of the few sponsors who stood by Tiger Woods when his numerous extramarital affairs became public knowledge. (Nike suspended its endorsement deal with South African sprinter Oscar Pistorius after he was accused of murdering his girlfriend Reeva Steenkamp in February 2013, but the company did not terminate his contract until September 2014 after he was found guilty 19 months later of killing her out of negligence.)
Kane continued, “One would have hoped that rather than suspending Sharapova until the investigation was complete, they would have taken a similar approach that they did with other athletes that she’s innocent until proven more guilty. We know that she’s guilty. The question is, ‘Was it an innocent mistake or was she trying to cheat by taking performance-enhancing drugs?’ She says, ‘No.’ and there’s no evidence to the contrary. That’s why you’re having an investigation. One would have hoped that Nike would have gone along with the tried-and-true American principle, which is you are innocent until proven guilty…That too could have been a case of Nike seeing that she’s vulnerable and saving some corporate cash.”
With Sharapova appearing to be “on the downward arc of her career” and having not won a major tennis championship since the 2014 French Open, Kane said, “I would wonder how her brands and contracts are doing anyway, given that Serena Williams beats her every time they play. When was she in the Top Five? That will hurt her far more than innocently taking a drug that she shouldn’t have.”