For reasons known only to psychologists and PhDs in media and mass marketing, consumers strongly identify with "celebrity endorsements," which is why advertising companies continue to use them. It can be as subtle as a faceless, although familiar voice like George Clooney, Julia Roberts, Sean Connery or Kevin Spacey narrating a television commercial for Internet service providers, automobiles, or credit card companies. And just as often, the voice is identified with the face of the celebrity. Matthew McConaughey for Lincoln. Pierce Brosnan for Kia. Nicole Kidman for Chanel.
But what happens when the celebrity endorser, or indeed, the celebrity "partner" goes off-message and off-the-wall, and stands to ruin not only his or her personal brand, but the brand the endorser is associated with?
Nike, Trek Bicycles, RadioShack, Honey Stinger and numerous others used endorsements from disgraced cyclist Lance Armstrong, who regularly denied that doping helped him win his Tour de France and other cycling victories, but was subsequently found to have shamelessly doped (and brazenly) lied about it. Kellogg's dropped Olympic gold medalist Michael Phelps, who was well paid to endorse Kellogg's Corn Flakes, after someone took the photograph of him smoking hash from a bong at a party. Tiger Woods lost $22-million (U.S.) worth of endorsement contracts after his marital infidelities (and intimate preferences) became well known. More recently, Subway divorced itself from its relationship with long-time spokesperson Jared Fogle after he pleaded guilty to child pornography and other sexual offences. Fogel is serving 15 years in prison.
The most perplexing "bad spokesman" at the moment must be Republican presidential candidate Donald Trump, particularly with respect to his racial allegations against Mexicans and now his well-publicized demand that all Muslims be banned from entering the United States. He has also demanded surveillance on mosques in the U.S. and called for database on all Muslims living in the United States.
And now, in Canada, his brand is poison.
I do not envy Vancouver's Holborn Group. It's about to open a 63-storey condominium and hotel tower in the centre of the city, called the Trump International Hotel and Tower designed by renowned Vancouver architect Arthur Erickson. Holborn negotiated a management and branding contract with the Trump organization for the management of the 147 hotel rooms in the Tower. Although Mr. Trump doesn't own the tower (Holborn and its owners and partners do) if it's like any of the other Trump Towers in the world, the word "Trump" will be predominantly displayed as part of a trademark and branding license with Holborn.
And after Trump's most recent racist outbursts, it is not inconceivable that the "Trump" name on the front of the hotel could lead visitors to Vancouver to book their rooms elsewhere and effectively vote with their feet to boycott not only the hotel, but the restaurants and bars in the facility.
This will have an adverse effect on management and staff at the hotel, who I bet don't share Mr. Trump's views on anything. Other talented managers and staff may not want to work under such a tainted brand. Besides, if people are not going to stay in the hotel, eat in the restaurants or drink in the bar, better tips can be made elsewhere, so Trump's racist outbursts may well have an effect on the employees at the hotel who work behind the desk, or servers in the restaurants and bars. The brand suicide being committed by Mr. Trump may well affect those who have purchased units on the condominium floors (and who might well be considering class action lawsuits). Any third-party commercial tenants who have rented space in the complex conceivably stand to lose if consumers stay away from the hotel in protest.
The City of Vancouver has entered the fray. One city counsellor, Kerry Jang, has encouraged Holborn to remove the "Trump" name from the Tower because the brand will give Vancouver a black eye. Others, including a former Vancouver city planner, are also speaking out on this, and a snowball effect is expected to try to force a name change. There is even a petition at change.org to compel a name change.
The city, the province, and indeed the federal government lack the legal authority to force such a change. It's really a business issue. Under its management and licensing agreement with Trump, Holborn has the same right to use and display the "Trump" name as consumers have the right to boycott the premises because of the name.
(Mind you, if I were the City, I would simply require the removal of the letter "T" from all outdoor signage.)
Although his business partners likely didn't predict Mr. Trump's racist rants, it's probably a good lesson for any business, large or small, thinking about engaging a spokesperson or celebrity to endorse its products, or to enter into any other transaction (like a management agreement) where the partner has the ability to drag your company's reputation down the drain with it, and jeopardize your investment.
Whether it's Lance Armstrong, Jared Fogle, or now, Donald Trump, your contracts with celebrities and "celebrity partners" should allow you to dump them when the clown goes bad.
Tony Wilson is a franchising, licensing and intellectual property lawyer at Boughton Law Corp. in Vancouver and adjunct professor at Simon Fraser University (SFU). His opinions do not reflect those of the Law Society of British Columbia, SFU or any other organization.
Tony Wilson