Under Armour received a dose of good news Sunday after the company endured a week of criticism when several of its top celebrity endorsers broke ranks with the Baltimore-based athletic wear firm after chairman Kevin Plank spoke positively about President Trump’s effect on business.
Jordan Spieth, clad top to bottom in Under Armour, won the AT&T Pebble Beach Pro-Am — and didn’t utter a peep about politics, Plank or Trump. In that way, the golfer gave some relief to UA and Plank, which are in damage-control mode after having been darlings of Wall Street for years.
The rough patch began with disappointing earnings last month that reflected the company’s slowest growth in eight years. Then the company’s chief financial officer left. Several analysts downgraded the shares. And Standard & Poor’s downgraded the company’s debt to junk. Even so, Under Armour says its “brand has never been stronger.”
While attempting to explain the company’s financial challenges, Plank inadvertently launched a public relations firestorm last week when he appeared on CNBC. Then the interview moved on to Trump, whom Plank called “bold” and “decisive.” Plank said “to have a such a pro-business president is something that’s a real asset for this country.”
That kicked off a backlash in UA’s celebrity ranks, starting with Stephen Curry of the NBA Golden State Warriors, who is the face of UA’s basketball business and whose endorsement contract runs through 2024. He appeared to take issue with his business partner’s comments. “I agree with that [Plank] description, if you remove the ‘et’ ” from asset, said Curry, who endorsed Hillary Clinton.
Ideally companies and their celebrities stay on the same page. But not lately. “Today is such a crazy time in our society,” said Lisa Delpy Neirotti, professor of tourism and sport management at George Washington University. “There are a lot of firsts going on. Sometimes the athletes don’t always think from a business perspective. Kevin is talking from a businessman’s perspective, looking out for his company.”
In another approach, Under Armour’s rival Nike rolled out an ambitious ad campaign over the weekend touting “Equality,” with its own star power from LeBron James, Serena Williams, Kevin Durant, Victor Cruz, Gabby Douglas, Megan Rapinoe and Dalilah Muhammad. The launch included a splashy four-page spread in the Sunday New York Times.
The fortunes of a company and its endorsers are closely tied. Curry owns equity in Under Amour as part of his lucrative UA endorsement deal. His shoe is key to the company’s success.
“It’s a major shoe,” said John Horan, publisher of Sporting Goods Intelligence. “It’s not Under Armour’s whole shoe business, but basketball is pretty key for [Plank] because it opened a channel of distribution that he didn’t have much penetration in,” including mall and urban stores.
Curry’s position as one of the highest-paid and celebrated players in the NBA gives him a more secure platform from which to speak out, said Jim Tanner, who represents current and former NBA athletes, including Jeremy Lin, Grant Hill and Tim Duncan.
“Steph is in a unique position,” Tanner said in an email. “He is considered one of the best and most marketable athletes in the world. If he loses an endorsement, he has innumerable other companies, particularly athletic footwear and apparel companies, waiting in line for him to endorse their brand.”
In an interview with the San Jose Mercury News last week, Curry said he was surprised at Plank’s comments. The Warriors’ star shooting guard said he had spoken with Under Armour people and with Plank and was comfortable with the company’s values. He said he intended to maintain his association with Under Armour “as of Wednesday afternoon.”
Curry’s reaction prompted a statement from Under Armour clarifying Plank’s position on Trump, which included: “Under Armour and Kevin Plank are for job creation and American manufacturing capability. We are against a travel ban and believe that immigration is a source of strength, diversity and innovation for global companies based in America like Under Armour.”
Neirotti acknowledged that nuance can get lost with so many hot-button political issues.
“Too many people are seeing Kevin’s comments from one perspective and not understanding you can be pro some aspects and totally against other aspects in the current political climate,” she said. “If he can get a better trade deal that can bring more revenue to Under Armour, he has a reason for saying it.”
Other Under Armour celebrities also distanced themselves from Plank after Curry’s comments. They include ballerina Misty Copeland and actor and former pro wrestler Dwayne “The Rock” Johnson, who has a signature shoe line with the firm.
On Friday, a German soccer team sponsored by the Baltimore-based athletic wear company released a statement criticizing Plank’s comments.
Many of the complaints have arisen in the wake of Trump’s executive order last month placing a temporary ban on the entry of immigrants and on refugees from seven mostly Muslim countries. A federal appeals panel unanimously ruled last week that the ban be frozen, allowing people from those countries to continue entering the United States.
“As someone who takes my responsibility as a role model very seriously, it is important to me that he, and UA, take public action to clearly communicate and reflect our common values,” Copeland said.
Johnson said Plank’s “words were divisive,” and went on: “I partner with brands I trust and with people who share my same values. That means a commitment to diversity, inclusion, community, open-mindedness and some serious hard work.”
The Under Armour backlash follows a rash of socially charged ads during Super Bowl LI, including companies such as 84 Lumber, Anheuser-Busch InBev, and Audi and Kia autos.
Last fall, San Francisco 49ers quarterback Colin Kaepernick refused to stand during the playing of the national anthem before games to protest the treatment of African Americans and other minorities in the United States. More recently, several members of the New England Patriots, winners of the Super Bowl, said they would not attend a Trump White House celebration to honor the team.
The sporting goods business has been disproportionately hit by the national split over Trump, who defeated Clinton after a highly divisive general election. The industry’s two big constituencies include fishermen and hunters on one side (known as the “cast and blast” crowd) and the hikers and crunchy granola types on the other. The hunters/fishermen tend to be Republican, and the hikers who buy North Face, Patagonia and other camping gear tend to be Democrats and liberals, said Horan of Sporting Goods Intelligence.
“The other big group are millennials, who buy Nike, Under Armour and Adidas, who are responding to the idea of using your wallet to advance the conversation. Just about everything seems to take a pro- or anti-Trump connotation,” Horan said. “There are all kinds of things where athletes and CEOs disagree.”