Companies should avoid endorsing Russian athletes as major brands cut ties with tennis star Maria Sharapova, a sports sponsorship expert warns.
Sharapova, who receives endorsements worth more than $22 million each year, admitted to taking the banned substance meldonium (see below) after being caught in a drugs test at the Australian Open.
She now faces a four-year ban and sponsor backlash.
Nike, which has a $70 million deal with the US-based Russian, along with Porsche and TAG Heuer have suspended their sponsorship arrangements pending an investigation.
Tony McKay, head of strategy at Dentsu sports marketing firm Team Epic, expects her other backers to quickly follow suit. Evian, Avon and Head have indicated they will see how the scandal develops before making a decision.
"I think she will lose the majority if not all of her sponsors, I'd be staggered if any of them would continue,” McKay says.
“We now live in a world where there is zero tolerance. Most sponsors, from my experience, don't look for grey areas ... there'll be a clause in every sponsorship agreement that says a negative drug test is a reason to terminate."
Russian roulette
Sharapova is the highest profile tennis player to test positive for a banned substance. Although based in Florida, she is the latest in a string of Russians to be implicated in doping scandals in recent months, placing Russia's reputation in international sport in “terrible jeopardy”.
On Monday, Olympic figure skater Ekaterina Bobrova confessed to taking meldonium while Russia's track and field team have been banned from competing in the Rio Olympic Games after revelations of widespread doping emerged last year.
“This isn't so much a bad issue for tennis – it's a bad issue for Russia,” McKay says. “On top of their track and field athletes, there's a cyclist and an ice skater who have returned positive tests. There's a lot being exposed about a widespread, systematic doping program in Russia.
“We would be advising people now, if they were looking to sponsor any Russian athlete to tread with extreme caution. I would find it really hard to make the case. I would say this to existing sponsors as well. [This will have] a tremendous commercial impact on western sponsors.”
'I don't buy it'
In a carefully staged press conference, the five-time grand slam winner claims she has been taking meldonium for 10 years under a different name (mildronate) to treat illnesses including the early onset of diabetes. She says it wasn't until January the World Anti-Doping Authority banned the substance and she was unaware.
McKay says he was surprised to learn Sharapova was taking the substance, but cannot accept it was innocent mistake.
“She's said an email came out with a link to banned substances and she didn't read it. Every professional athlete in the world knows the importance of this issue. The fact you were sent a list and didn't read it defies plausibility, I don't buy it for a second.” he says.
Sharapova is expected to receive a mandatory punishment of up to two years, but the lesson for corporates looking at the next up-and-coming athlete to sponsor is clear.
“Tread much more carefully, do more research and pick your athletes with care and thought," McKay says. "This puts due diligence and negotiations of terms under greater importance."
It is not inconceivable that Sharapova may recover from the fallout and make a comeback to the sport. However, this is yet another body blow to Russia, only two-and-a-half years away from hosting the FIFA World Cup.
Whether this latest scandal deters sponsors from that tournament remains to be seen.
Why take meldonium?
What is it: Developed in Latvia, meldonium (also known as mildronate) is used to treat patients who suffer heart conditions because of a lack of oxygen in their blood. The company that produces meldonium says a typical course of the medicine is 4-6 weeks.
Why would athletes take it: Due to its oxygen-enhancing quality, the drug has been used by athletes to improve endurance.
Is the drug performance enhancing: According to WADA, there is evidence athletes have used it to enhance performance. It also increases the capacity for exercise, so could be used to enable better recovery and training rather than specifically enhance competition performances.
When was it banned: The World Anti-Doping Association placed meldonium on its watch list in 2015 and banned it from 1 January 2016. Athletes were advised of this last September.
What is Sharapova's defence: The tennis ace said she was using it under the name mildronate for 10 years and was unaware it was the same drug as meldonium. For most of this time the drug was allowed to be used and Sharapova said she didn't check an email that specified meldonium was being banned this year. Her legal team claim the dosages she took would not enhance performance.
Is this a legitimate excuse: No. Professional athletes are heavily monitored, tested and must be aware of everything they consume - it is their job. To her credit, Sharapova has accepted it was her responsibility, but with the spotlight firmly on Russian athletes, she should have been extra vigilant.
What is the likely outcome: Sharapova will receive a ban of up to four years, reduced to one or two years if her use is ruled unintentional. Her PR offensive is clearly designed to minimise the severity of the punishment. It is likely she will lose considerable commercial backing from sponsors, but may retain Russian sponsors. At the age of 28 and with a long injury record, a full ban could lead to an early retirement.
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