Channel: DailyFinance.com
Viewing all articles
Browse latest Browse all 9760

Paula Deen and Aaron Hernandez: A Tale of Two Celebrity Endorsers


Filed under: , ,

Paula Deen
Two very different stars, two very different purported misdeeds. But the concurrent troubles of celebrity cook Paula Deen and NFL standout Aaron Hernandez will cost both of them millions -- in Hernandez's case, on top of the prison sentence he faces if convicted of murder and gun charges. And together, these stories show how endorsement deals, sources of enormous wealth and power, can be liabilities for both companies and celebrities in times of crisis.

It's obvious that a spokesperson engulfed by scandal becomes undesirable in the eyes of a corporation. But as Deen's example suggests, a star's business partnerships can be feet of clay for the celebrity herself, as ties to PR-conscious companies tend to amplify a negative news cycle.

After Deen admitted to having used a racial slur, the cascade of famous brands distancing themselves from her soon became its own story: first the Food Network, her bread and butter, then Smithfield Foods (SFD), the world's largest producer and processor of pork, followed by Walmart (WMT), Caesar's Entertainment (CZR), Target (TGT), Home Depot (HD), diabetes drugmaker Novo Nordisk (NVO), QVC, Sears (SHC), Walgreens (WAG), and JCPenney (JCP).

It's hard to say which is more remarkable: that Deen, 66, lost such a constellation of sponsors in so brief a period, or that she managed to build her commercial empire in the first place, starting with a catering service run from her home in Savannah, Georgia. The much younger Hernandez, 23 years old and three seasons into his NFL career, had less to lose in the way of endorsements: His only deals were with CytoSport, maker of the Muscle Milk brand of protein supplements, and Puma, the world's third-largest sports apparel company. Both contracts are now moot. On Thursday, Puma announced in a terse statement that it had ended its relationship with Hernandez "in light of the current situation," voiding a two-year agreement with the athlete to promote the company's "men's training initiatives," according to USA Today. CytoSport took action last week, cutting ties days after news broke that Hernandez was involved in a homicide investigation.

The Possibility of a Comeback

Although Deen has suffered a spectacular collapse of corporate relationships, she has retained some support among the public. In fact, preorders of her upcoming book, "Paula Deen's New Testament," have surged, sending it to the top of the Amazon (AMZN) and Barnes & Noble (BKS) online bestseller lists. Perhaps the old adage about there being no such thing as bad publicity holds true in publishing.

Random House didn't see it that way. The company announced on Friday it was canceling "New Testament," along with four other planned releases. But Deen's agent says other publishers are interested, and if Deen
can learn to talk about race and her changing attitudes in a different way -- abandoning the weird mix of defiance of self-pity she showed on her "Today" appearance -- continued success as an author could provide a platform for public redemption.

Hernandez, who obviously stands accused of far graver offenses --
repellent as it is to contemplate an antebellum South-themed wedding, as Deen reportedly did -- has already been cut off from the source of his success. The Patriots released him 90 minutes after his arrest on Wednesday, before it was known what charges he would be facing. As Ben Volin of The Boston Globe argues, the team's decision to dump Hernandez so quickly was "rash," from a financial perspective:

The prudent move, at least as it relates to the business of the football team, would have been to wait for NFL commissioner Roger Goodell to suspend Hernandez under the personal conduct policy, which would have given the Patriots clear avenues to recover money and avoid cap penalties.

That's the approach the Atlanta Falcons took when Michael Vick pleaded guilty in connection with a dogfighting ring in 2007. The Falcons were able to recoup $20 million of the $37 million they paid Vick -- at the cost of keeping an animal-abusing felon on the roster for two years after his guilty plea. The Patriots opted to wash their hands right away, but will now have to work harder to get some of their money back. Hernandez signed a $40 million contract extension in August;
his 2015-2018 salaries, which totaled $19.3 million, were unguaranteed and are already gone, but guarantees and signing bonuses don't automatically vanish.

Though fiscally the Pats may have "complicated matters," in Volin's words, their decision looks significantly wiser by now: since Wednesday, it's been reported that Hernandez is also suspected of involvement in a 2012 drive-by shooting that killed two men in Boston. Sources have even suggested that Odin Lloyd, Hernandez's friend and the victim of this latest murder, may have been shot because of his knowledge that Hernandez had a hand in the previous killings. On Friday, the Globe mentioned "the chilling possibility that the region's beloved NFL franchise carried a double murderer on the roster last season." Owner Bob Kraft and coach Bill Belichick at least ensured Hernandez was not a Patriot when this other shoe dropped.

And the damage control continues. In a striking move, the Patriots will hold a free jersey exchange on the weekend of July 6-7 at their stadium in Foxborough, Mass., when Hernandez #81 jerseys purchased on the team website or at its ProShop can be turned in for any new Pats shirt. "We know that children love wearing their Patriots jerseys, but may not understand why parents don't want them wearing their Hernandez jerseys anymore," said team spokesperson Stacey James. "We hope this opportunity to exchange those jerseys at the Patriots ProShop for another player's jersey will be well received by parents."

So there will be no going back for Hernandez. In theory he could be signed by another team even now, although NFL Commissioner Roger Goodell has said he would have to approve any new contract. But even if Hernandez finds another football home and beats the charges, it seems unlikely that he'll be able to repeat the success he had with New England. As a Patriot, Hernandez played with the league's number one ranked offense, partnering with fellow tight end Rob Gronkowski and catching passes from one of the game's best quarterbacks, Tom Brady. The Pats were in fact unlike other teams in their willingness to roll the dice on Hernandez, who was said to have been a second-round talent but got drafted in the fourth, his stock lowered by "character" concerns (i.e. a failed drug test and rumors of bad friends). Describing the structure of the contract back in 2010, Alex Breer said, "Hernandez can wind up getting the money a third-rounder would over four years, but he's gotta walk the straight and narrow to do so." We know how that turned out, and the Patriots are having to pay the price for a bet that looked as though it would pay off nicely.

You can't rule anything out in professional sports: In 2000 Baltimore Raven Ray Lewis was indicted in a double-murder case, took a plea deal and spent a year in jail for obstruction of justice. One year later he was Super Bowl MVP, and though Disney (DIS) and General Mills (GIS) declined to use him them in their traditional promotions, Lewis gained other advertising gigs in time. But it's hard to see Hernandez repeating that feat, as he lacks Lewis's stature and outsized personality.

Personality is one thing Paula Deen's still got going for her. As cynical as it sounds, she could be just one crisis management professional away from turning things around. No less an august Georgia native than Jimmy Carter, for one, has offered his help.


Permalink | Email this | Linking Blogs | Comments

Viewing all articles
Browse latest Browse all 9760

Latest Images

Trending Articles

Latest Images