Marketers watched with astonishment this year as the Subway restaurant chain’s brand - once valued by Forbes at $6.8 billion, putting it on the magazine’s list of Most Valuable Brands - imploded, as the company flailed about when spokesperson Jared Fogle agreed to a plea deal involving child sex and porn. Our public relations world promptly erupted with crisis advice, recommending what Subway - which had featured the now self-admitted molester in some 300 ads over 15 years - should have done after it learned that the face of its brand had committed acts which guarantee that its $5 foot-long will forever be associated with a pedophile.
Were Subway’s tight-lipped tweet responses too little too late?
We no longer have a relationship with Jared and have no further comment.— SUBWAY® (@SUBWAY) August 18, 2015
Jared Fogle’s actions are inexcusable and do not represent our brand’s values. We had already ended our relationship with Jared.— SUBWAY® (@SUBWAY) August 19, 2015
Should Subway try to reverse the damage by giving money to charities that protect children? Did Subway distance themselves from their spokesperson too fast or too slow - or is it now impossible to separate the prison-bound Jared from his distraught sponsor?
Yet, few have asked the more urgent question that faces all brands in this era when smartphones guarantee that a spokes-celebrity’s scandals will be documented for viral eternity: Why wait to act until a brand’s spokesperson is arrested, convicted and imprisoned, his perp walk (and your brand’s collapse) documented across America?
Were there protective steps that companies like Subway, Jell-O (Bill Cosby’s former patron); Wal-Mart, Target and Home Depot (sponsors of disgraced Southern cooking belle, Paula Deen); Nike, AT&T, Gillette, Gatorade and Tag Heuer (which hired Tiger Woods to endorse their products) and RadioShack and 24-Hour Fitness (sponsors of cyclist Lance Armstrong) could have taken before their endorsers caused collateral damage to their reputations?
For answers, we visited with Minneapolis sports and entertainment attorney Lee Hutton, whose clients have included singer Puff Daddy, ex-Kardashian family member and NBA player Kris Humphrey and NFL’er Hank and wife Kendra “The Girls Next Door” Baskett. We expect that Lee’s advice for marketers considering an endorsement deal with a celebrity will intrigue you:
#1 - Negotiate a Contract That Sets Boundaries of Celebrity Behavior
First off, Hutton (below right) underscores that an effective endorsement contract between a brand and a celebrity or athlete should be written broadly so it sets parameters on what is acceptable and unacceptable behavior by the Famous One. “It’s good to set those boundaries of behavior in your brand’s contract,” says Hutton, “because otherwise, a courtroom will decide if the actions of your celebrity endorser warrant consequences - and once you’re in court, the dispute gets into the public eye, with exposure that’s bad for both the celebrity and your brand.” Hutton recommends that brands insert a morals clause which, in his words, “sets out ‘what ifs’ protecting both the celebrity and the brand if the endorser engages in something scandalous.“The devil is in the details,” says Hutton. “What, for example, would happen if your spokesperson is merely accused of some salacious activity, but that malfeasance is never proven? Your contract should address that.”
#2 - Identify Who Speaks To The Press If Everything Hits the Fan
PR executives take note of Huttons’ next advice about celebrity agreements. “I insert a clause in these contracts that identifies who controls communications with the media during a crisis,” says Hutton. “Face it, the message that the brand wants to get out may not be the same that the athlete or celebrity wants to share during a crisis. Who speaks to the press often depends upon money - the brand may pay the celebrity more money so that his or her contract requires your PR director to be the point of contact with media in the event of a crisis, rather than the athlete or his/her team.”
#3 - Decide In Advance Who Controls Media Outreach During A Crisis
Hutton says that an endorsement contract can specify what happens if a crisis occurs - not just who is authorized to speak to the media, but also who issues any press releases. Who makes strategic decisions on the message to be distributed, as the scandal gathers steam? An endorsement contract may even specify whether your brand can publicly announce that you’ve terminated your contract with a celebrity who transgressed, or if that termination must be done confidentially, behind closed doors.
#4 - Go Sherlock Holmes On Your Endorser
Could Subway have detected ominous warnings about Jared’s deviant behavior, or could Jell-O have uncovered hints about Bill Cosby’s nefarious activities, long before their scandals sullied Subway and Jell-O’s brands? “You must do your due diligence and investigate a celebrity or athlete before you sign a contract - it’s negligent not to,” warns Hutton. “If you hire an athlete to do a TV event involving children, and it comes out that your celebrity is a sex offender - your company could be sued along with the athlete.” (Note: Subway’s spokesperson, Jared, appeared at elementary schools to speak to children about obesity).
#5 - Establish Warranties Tied to A Celebrity’s Past Behavior
Hutton recommends that marketers interview a potential celebrity or athlete to establish what entertainment lawyers call ‘warranties’ - representations that the celebrity makes about their own personal lives which, in legal terms, ‘induces a brand to hire them.’ If a spokesperson represents that they have no secrets pertaining to drugs or criminal activity, for example, “you can establish fraud if they lie about those representations - and when there’s fraud, the judicial system works to make things whole again for your company, which could include rescinding the contract if it was violated.”
#6 - Watch For Red Flags on Social Media and Beyond
“Before you sign a deal, ask the athlete or celebrity to sign an authorization allowing you to perform a full background check,” urges Hutton. “Will he or she refuse and if they do, is that refusal a red flag for you? In fact, sometimes when you discuss a background check, the celebrity will come out and disclose something in their past that they expect you’ll find out anyway.” Hutton suggests requesting that a celebrity share their social media codes, so your company can delve into how they use Facebook and other social channels before signing. “Is the celebrity doing impulsive tweeting that could embarrass your brand? Are their thousands of followers real people? Has the celebrity posted offensive images on Instagram that suggest red flags?” asks Hutton.
#7 - Even With Celebrities, The Past is Prologue
ICON Global CEO Elijah Shaw (left), a Los Angeles-based corporate security and personal protection expert whose clients have included Usher, Prince and Naomi Campbell, adds his own counsel. “Celebrity by nature has a built-in ‘trust factor’ - the assumption that because these people are in the public eye, any tarnishes would have already come to light and therefore, more extensive vetting gets overlooked,” says Shaw. “That opinion is changing as new scandals come to light that have their roots in the past. “
Although celebrities appear to live under a media microscope, doing a background check on a celebrity is no easy task, adds Shaw. “Being a celebrity opens up a treasure trove of potential research material, as their movements, associations and history are usually documented. With that said, notable celebrities take great lengths to protect their privacy and sanitize information.”
According to federal law enforcement documents, Subway spokesperson Fogle had begun soliciting prostitutes as far back as 2007. Bill Cosby had served as spokesperson for Jell-O for 25 years after his first spot aired in 1974, meaning that accusations of sexual assault overlapped directly with his years as Jell-O’s spokesperson. It’s likely that a background check by a competent private investigator could have alerted both brands to the dark clouds soon to engulf them.
#8 - Understanding What Makes The Celebrity Of Value To Your Brand
Hutton suggests that what brands want most from a celebrity is one thing: stability. That means not only avoiding scandals, but also ensuring that nothing changes in an athlete’s performance as a champion. “Brands can put a clause into a contract that prohibits any action taken by the athlete that prevents the company from making money off their celebrity,” says Hutton. “For example, sponsors hired Tiger Woods because he was #1 in golf. The brands didn’t want to say to their consumers - wear our shoes or our watch and you’ll be a runner-up. No, marketers want to say, use our product and you too will be #1.”
#9 - Know What Your Brand And Your Celebrity Stand For
“Before your brand signs a contract with a celebrity, you have to understand the culture of your consumer,” says Hutton. If your company sells beer, snuff and guns, then incidents involving a brand ambassador abusing alcohol, tobacco and weapons may not sully your brand with that particular audience. “But if your company’s brand stands for healthy living and wellness, then your spokesperson's arrest for driving while intoxicated or on drugs would be a big violation. Or, what if they ride a motorcycle under the influence, and the celebrity is an endorser for Harley-Davidson?”
Yet, the moral sense of each generation changes, along with what might become a deal-breaking scandal for a brand. On one hand, General Mills hired Cheech & Chong, America’s most famous marijuana tokers, to promote Fiber One “magic” brownies in a hilarious 2.5-minute fake movie trailer. Meanwhile, Olympic gold medalist Michael Phelps lost an endorsement with Kellogg when he was seen on video with a bong, followed in 2014 by a drunk driving plea.
Would the revelation that Hollywood leading men Tab Hunter (an endorser for Gillette) and Rock Hudson (a spokesperson for Desoto automobiles and other brands) were secretly gay be devastating for their sponsors today as it might have been in their 1950s heydays? No one thinks twice today about Ellen DeGeneres endorsing American Express, Covergirl, J.C. Penney and Galceau VitaminWater - her coming out was barely an issue with her millions of fans.
#10 - All Scandals Are Not Created Equal
“Consequences can be very individual,” notes Hutton. “Both Tiger Woods and Michael Jordan were number one in their respective sports; and it came out that both had been promiscuous with women. Nike kept their sponsorship active with Jordan, but not with Tiger Woods.” The sponsors of the Rolling Stones’ world tours (Citi, Jovan perfume, E-Trade) know well that they’re attaching their brands to the Bad Boys of Rock - if notoriously dissolute Keith Richards (above) were arrested at an orgy in Paris tonight splashing in a cocaine fountain with three nubile, tattooed 17-year-olds, it would only increase the guitarist’s value for sponsors. But acceptance of a celebrity’s transgressions have limits: Will anyone be able to watch the TV spots of O.J. Simpson running through airports for Hertz without thinking of his white Ford Bronco police chase and subsequent trial for a double-murder?
#11 - Be In Direct Contact With Your Celebrity Endorser
“Your brand should have someone in direct daily contact with the celebrity, long after the contract is signed,”
urges Hutton. “Face it, the success of a brand can be completely intertwined with the success of an athlete or performer’s career - a Tiger Woods virtually becomes an extension or a department of your company.” How could sponsors know about Tiger Woods’ personal issues if they weren’t in daily contact with him?
#12 - Know Your Celebrity’s Entourage
Finally, Hutton advises brands to meet with the entire team around a celebrity - his or her agent, manager, and publicist. “Is there a sleaze factor? What relationship does your celebrity have with their entertainment attorney - who will the athlete turn to for advice before or during a crisis?”
So, are the benefits worth the hazards of linking your brands to a superstar?
“Celebrity endorsements are riskier than ever,” grumbled ad agency SVP Jim Gentleman in AdAge recently. “When they go bad, the costs are immeasurable and the brand damage is difficult to overcome. Don’t be surprised if Subway’s next campaign features a talking sandwich...that is sure to never embarrass the company.”
Given the propensity of some celebrities to indulge in illicit and/or illegal behavior, some brands may indeed find animated spokes-toons like Geico’s talking Gecko, dead celebrities like Elvis and Marilyn Monroe, and even fictional spokespeople like Allstate’s Mayhem and Progressive’s Flo more appealing. Face it, Charlie the Tuna, Mr. Clean and the Geico cavemen won’t be arrested in a brothel or heroin den anytime soon.
should brands be wary of hitching their product to a celebrity’s fame?
“No question, the situations with Lance and Tiger caused many brands to be more cautious about endorsements,” sighs Hutton. “But I tell my clients - don’t fear what isn’t inevitable.
“First off, Millennial consumers see celebrities as an essential component of the personality of a brand.” But more importantly, Hutton notes that it’s virtually impossible for a brand to perform a national social media marketing campaign without a celebrity as the voice of their social channels. The Rolling Stones’ 2013 “50 and Counting” tour partnership generated 747 million social media impressions for the band and its sponsors, according to AdWeek - with Mssr. Jagger and Company engaging with more than 5 million users on Twitter alone. “You need a celebrity and you need their social media followers,” concludes Hutton, even if there are risks.
“How can you tweet out to millions of consumers without having a human face - a celebrity or an athlete’s face - to bring your brand’s social media messages to life? You just can’t!”
Paul Maccabee is president of Maccabee, a Minneapolis public relations, social media marketing and online communications agency. His firm has worked with celebrities including actor Jeff Bridges, NFL legend Walter Payton and country music singer Trisha Yearwood.