As company after company has cancelled sponsorships with Hockey Canada over its mishandling of gang–rape allegations and millions in payouts to complainants with sexual misconduct claims, communications experts are not sure the organization can ever recover with advertisers.
“This is probably a textbook case of the worst brand crisis that an organization could be in,” said Prof. Ann Pegoraro, the Lang Chair in Sport Management at the University of Guelph.
On Thursday, after weeks of controversy during which sponsors temporarily paused support, Hockey Canada was battered by big-name brands fully backing out of deals with the organization.
Canadian Tire announced it is permanently ending its partnership, while the telecom giant Telus, grocery chain Sobeys and food delivery app Skip the Dishes also pulled the plug on elements of their support.
In recent days, Tim Horton’s, Scotiabank, and Esso parent company Imperial Oil have also cut ties with Hockey Canada.
Meanwhile, the federal government has ratcheted up criticism of the organization, while Hockey Quebec said it will no longer transfer funds to the national body.
The damage to the brand is adding up so fast that Pegoraro wonders if the very name Hockey Canada could soon be too toxic to be rehabilitated with sponsors.
“I think they have limited time left that they could salvage it and by limited time I mean, days at best, if they don’t make wholesale changes.”
Pegoraro believes Hockey Canada’s name could still be a positive association for sponsors if it acts fast.
But, she says, because it hasn’t installed new leadership and offered what she sees as a true apology, “they’re still sliding down.”
Megan Matthews, a communications strategist and co-founder of Instinct Brand Equity in Toronto says Hockey Canada can’t rehab their brand by resisting change.
“They’re digging their heels in, in a way that’s almost reinforcing the culture that is bubbling up here. Not looking at a leadership change, not looking at an internal review that they’re going to publish the results of,” she said.
“I think that they are missing their window of opportunity.”
This week, interim board chair Andrea Skinner said Hockey Canada won’t be making changes to its management, and told a parliamentary committee that the organization has an “excellent reputation.”
Brian Levine, the president of Envision Sports & Entertainment, a Toronto communications agency that works with elite athletes, companies, and charities, said the clock is ticking on a comeback for the Hockey Canada name.
And not just with past sponsors but future supporters as well.
“I can’t imagine anyone wanting to start a relationship with Hockey Canada. So that’s where definitely there’s been some serious damage done.”
The values factor
Levine, Matthews and Pegoraro all said that Hockey Canada’s sponsors are responding to consumer pressure as customers show an increasing interest in aligning themselves with companies they feel share or promote their values.
“Consumers nowadays are really interested in ethical brands in brands that are meaningful in their community and that resonate with them,” explained Pegoraro.
David Chong has worked with both Canadian Tire and Scotiabank on marketing projects in the past.
The managing director of MKTG Canada, a Toronto company that specializes in sponsorship, says the big brands had practically no choice but to cut ties with Hockey Canada.
“To do nothing in this regard is almost complicit,” he said. “It’s almost like saying we accept what they did is OK and we’re going to continue to fund them.
Potential fallout for the whole sport
Levine says that while companies that make hockey equipment or sports will stick with the game, the damage related to Hockey Canada could impact marketing for the whole sport.
With banks or telcos or car companies he wonders: “Do they say, well, there’s another sport in Canada that’s on the rise called soccer, right?”
He says any company looking at an endorsement deal with a male hockey player will vet the athlete more carefully than ever.
“That scrutiny is going to be challenging for agents representing male hockey players, for sure.”
Pegoraro, however, believes the draw of hockey is too powerful for many advertisers to resist but agrees the landscape has changed for sponsorships and endorsements with male players.
“I would hope it’s changed for the positive for women and for our para athletes so they are seen as the places to go.”
Sponsors will have new power
Pegoraro says Hockey Canada has made many mistakes in handling the allegations and complaints about junior hockey players and failing women.
She also says they made a huge miscalculation in not protecting their sponsors.
“This is not what a partner does, when you have this kind of a relationship where we have millions of dollars, exchanging hands.”
Matthews says whether Hockey Canada is overhauled and saves its name or a new body is created with a new name, sponsors will have a greater level of influence going forward then ever before.
“I think that if a brand was brave enough to put their hands up and say, ‘Let us help you, let us help fix this,’ then Hockey Canada would have to do everything they say.
“They’re going to have a real trouble with sponsorship for many years to come.”