The old maxim that any publicity is good publicity doesn't seem to hold up as well today as it once supposedly did, but companies always seem shocked -- shocked! -- when one of their celebrity spokespeople becomes embroiled in a controversy.
I mean, what exactly did Reebok think it was getting when it signed on rapper Rick Ross to promote its sneakers? Didn't the company listen to the lyrics of his music before handing over millions of dollars to him? And now that one of his songs blew up in its face -- promoting date rape doesn't exactly sit well with many people -- the sneaker maker is suddenly distressed by all the negative publicity being showered on it. The company ended up severing its ties with the rapper, saying, "Reebok holds our partners to a high standard, and we expect them to live up to the values of our brand."
Ah! I guess the fact that Rick Ross uses the stage name of a convicted drug trafficker didn't make an impression on them, nor did the fact that his lyrics glorify crime and drug use. No, that's all OK, undoubtedly because Reebok figured it would give the company "street cred" to sell sneakers. But the denigration of women finally crossed the line.
Be a good sport
There's a difference between the controversy wracking Reebok now and that, say, of Nike (NYSE:NKE), which has gone out of its way to manufacture controversy at times, standing by Tiger Woods during his personal divorce problems. Sports figures tend to have a more wholesome image, which is why they're among the biggest endorsers of products, but they, too, become embroiled in situations that leave the companies that sign their paychecks running for the exits.
Basketball star Kobe Bryant had deals with Nutella and McDonald's because of a family-friendly persona, until he was accused of rape. Kellogg ended its deal with Olympic swimmer Michael Phelps after he was photographed smoking marijuana. And steroid or other performance-enhancing drug use has ended contracts for baseball player Barry Bonds, Olympic sprinter Ben Johnson, and, most infamously, Lance Armstrong.
A bridge too far
At the risk of sounding like I'm trivializing sexual assault, in one sense Rick Ross' lyrics can be seen in the light of simply being artistic excess, though he did subsequently apologize twice for them. Video-game makers have often been accused of glorifying crime, such as Take-Two Interactive's popular Grand Theft Auto franchise, where the whole goal of the game is to commit crime, even murder. But in the end it's only a game. In the case of the rap song, the lyrics might be offensive, but it's still just a song.
Yet Reebok really can't plead ignorance that it didn't know the risks it faced. So-called "gangsta rap" is built on a foundation of criminality, misogyny, and abuse. And despite the negative connotations associated with the flap, it can't be denied that Reebok is on the tongues of many people these days.
Yet it's not really what Reebok parent Adidas (NASDAQOTH:ADDYY) was really looking for at the moment. Ever since the sneaker maker was acquired in 2006, it's served as a drag on Adidas' performance. It was looking for Reebok to finally turn to growth this year with new footwear and clothing-line introductions.
Perhaps P.T. Barnum was right after all when he purportedly said, "I don't care what the newspapers say about me as long as they spell my name right." For me, I choose not to invest in companies that seek to cynically exploit the worst in people. You can forgive a company for the social faux pas its celebrity spokespeople make, as they are not choices the companies themselves made, but when a company pursues a person with a particular lifestyle and then feigns outrage when that person lives up to the persona, it leaves a foul taste in my mouth for the stock.
Fool contributor Rich Duprey owns shares of Nike. The Motley Fool recommends McDonald's, Nike, and Take-Two Interactive and owns shares of McDonald's and Nike. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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