Archive for the ‘sponsorship’ Category

McDonald’s and the Ethics of Olympic Sponsorship

McDonald’s has been taking some heat over its continuing sponsorship of the Olympics. The fast-food chain recently announced that it would remain a top sponsor of the Olympic games through 2020.

The main charge here seems to be some form of hypocrisy. Critics suppose that there’s some sort of contradiction involved in a sporting event being sponsored by a fast-food chain. But there is, of course, no contradiction at all — at least not for those of use who take both our sports and our junk food in moderation. True, a diet that includes frequent trips to McDonald’s (or Burger King or Wendy’s, etc. etc.) seems inconsistent with a lifestyle aimed at maximal athletic output. There’s a real conflict there. But few of us are aiming at elite sporting status, and relatively few of us (thankfully) make Big Macs a staple. Most of us enjoy both sport and junk food in moderation. For us, the occasional serving of greasy fries does absolutely no harm at all to our athletic aspirations. There’s no contradiction in loving, say, both a Quarter Pounder With Cheese and training for a Half Marathon. So there’s no inherent contradiction involved in McD’s sponsoring the Olympics.

And really, if anyone is to blame, it’s not McDonald’s but the International Olympic Committee, and/or whatever subcommittees or functionaries are assigned the task of signing sponsors. After all, it’s their supposed values, not the fast-food chain’s, that this sponsorship deal presumably violates.

But supposed value-conflicts aside: what about the effect of such the McDonalds/Olympics alliance on, for example, kids? Well, note to start that kids don’t watch the olympics much. As for the rest of us, well we need to come to grips with the fact that our economic system features certain warts. And one of those warts is that the freedom to buy-and-sell means the freedom to sell things the over-consumption of which is harmful. And the freedom to sell such things implies the freedom to advertise them. Is affiliation with McDonald’s jeopardizing the positive impact of the Olympics? So be it. Our system of free commerce is a system that brings with it enormous benefits, far more benefits than will ever be derived from one hypertrophied sporting event.

Pepsi Makes the Best of a Super Bowl-Free Sunday

Talk about making a silk purse out of a sow’s ear. PepsiCo has managed to make a win out of not sponsoring the biggest advertising event of the year.

See the story here, by Jennifer Preston of the NYT: Pepsi Bets on Local Grants, Not the Super Bowl

What’s better than reaching more than 100 million viewers during last year’s Super Bowl? For Pepsi, it could be 6,000 football fans during a high school game on Friday night in central Texas. Or a group of parents who wanted a new playground in their Las Vegas neighborhood.

That is the bet that PepsiCo made when it walked away from spending $20 million on television spots for Pepsi during last year’s Super Bowl and plowed the money into a monthly online contest for people to submit their ideas and compete for votes to win grants….

This is the first time in 23 years that Pepsi isn’t a sponsor of the Super Bowl. How did this happen? Who knows. Maybe the price-tag got too rich for them. Maybe they got outbid. (Though it’s worth noting that PepsiCo won’t be entirely absent from the Super Bowl: the game will feature ads for two of the company’s other brands, Pepsi Max and Doritos.) At any rate, Pepsi says it’s just a new strategy. Interestingly, they say — despite the fact that this new strategy involves giving millions of dollars to good causes — it’s not a philanthropic strategy:

“This was not a corporate philanthropy effort,” said Shiv Singh, head of digital for PepsiCo Beverages America. “This was using brand dollars with the belief that when you use these brand dollars to have consumers share ideas to change the world, the consumers will win, the brand will win, and the community will win.

It’s an interesting move. For one thing, it brings together cause-based marketing and social media on a supersized scale. And to me, whatever the motivation for the move, it’s a true-and-justified instance of corporate social responsibility. It’s not ethically obligatory: I don’t think there’s anything wrong with doing things the old way. It’s not unethical to spend $20 million-plus on commercials for the Super Bowl, like they did last year. And it’s not obligatory to support dozens or hundreds of local causes. So think of it this way: PepsiCo has $20 million to spend on building its brand. It had to choose a strategy, a choice regarding how to spend that money. They could give it to the NFL, or they could give it to a bunch of worthy charities. If they can achieve their objectives (and hence fulfill obligations to shareholders) while at the same time doing some social good, that’s a good example of CSR.

As the company says, though, it’s a gamble. But as gambles go, they’re sure making the best of it. PepsiCo is turning not sponsoring the Super Bowl into a straight-up victory, rather than a defeat. And notice also that, with the right media coverage, Pepsi still gets its name associated with the Super Bowl.

Ethical Issues for the Chilean Miners

On August 5, 33 miners went down into the San José copper-gold mine; over two months later, 33 entrepreneurs emerged from the mine. They were labourers once. Now they’re businessmen, and celebrities.

Their fame is already being used by major corporations for public relations purposes. The New York Times reported, for instance, that Apple has sent each of the miners a brand new iPod.

But the miners themselves will have decisions to make, about how (and indeed whether) to make use of their new fame. Hollywood will surely come knocking, for instance. Book deals have already been announced. How will they (and how should they) handle fame and fortune? And the miners have already made a good start on their entrepreneurial careers. While still down in the mine, they drew up a contract “ensuring they will equally profit from the lucrative media deals they expect to secure for sharing the story of their two month survival in the hope that they never have to work again.”

But a question arises about such a contract. Is it, in fact, legally binding? To get an indication of why that’s a real question, see this piece by Andrew Potter: Chilean miners: That far down, who decides what’s law?

What is striking about the situation in Chile is how much it resembles one of the most famous thought experiments in the philosophy of law, known as “The Case of the Speluncean Explorers.” Written by the Harvard law professor Lon Fuller and published in 1949, the paper explores the fictional case of five men who embarked on the exploration of a system of caves in a country known as the Commonwealth of Newgarth. When a landslide covers the entrance and traps the men, they sit down to await rescue….

In Fuller’s thought experiment, the miners are eventually driven to cannibalism, in order to survive. Fuller’s article is about whether such cannibalism would rightly be considered illegal, under those circumstances. Fuller makes the case that it is (at very least) possible to argue that it would not be. Laws are social artefacts, and miners trapped underground for an extended period are effectively cut off from, and hence no longer part of, any particular society. Andrew notes:

…trapped miners are living in what amounts to a mini society of their own. All sorts of problems could arise in such a cramped space, from disputes over the allocation of food and medical supplies to rules over respect for privacy to procedures for dealing with crimes like theft or assault. If sovereignty is defined by the ability to exercise a monopoly over the use of force, then whatever legal authority currently exists in the San Jose mine, it is not the Chilean government.

Now, Andrew’s hypothetical is about the reach of Chilean criminal law. As it turns out (as far as we know) no significant violence erupted among the 33, so that question remains hypothetical. But, as I noted above, other kinds of legal questions arise, including the bindingness of the contract the men made while down there.

I won’t speculate further on the question of legality, but even if the legality of the contract were to be successfully challenged, the question of whether the contract is morally binding would remain a live one. After all, 33 men gave their word, and honourable men should want to keep their promise. On the other hand, if we consider the circumstances under which the contract was arrived at, we quickly see that those circumstances were very far from the ideal circumstances for giving free and informed consent. Many things can render a contract both legally and morally suspect, including such things as undue influence and duress. It’s easy to imagine that men trapped, in close quarters, half a mile underground being subject to both of those.

At any rate, my aim here is not to cast a pall over what seems, so far, to be a happy ending to the miners’ ordeal. My aim is simply to point out that, as newly-minted celebrity-entrepreneurs, “los 33” will face a range of ethical issues. What they have to learn, and what we have to learn from them, did not end when the last man finally saw the light of day.

Soccer Ball Ethics

Amidst all the excitement over the start of the FIFA World Cup, one of the oddest bits of excitement has surrounded the innovative ball being used in the tournament, namely Adidas’ new “Jabulani.” Although the ball was designed to have superior aerodynamic properties, critics have attacked the ball for the particular way it flies though the air. Here, for example, cites Brazilian goalkeeper Julio Cesar as saying “It’s terrible, horrible. It’s like one of those balls you buy in the supermarket.”

Two things are interesting about this controversy.

One has to do with fairness. The controversy over the Jabulani — the ball that all teams will play with during the tournament — reminds us that the “level playing-field” metaphor so often appealed to in business is a sporting metaphor. It’s a reference to the fact that we think it desirable, generally, to make sure that no team has an unfair advantage. We want a level playing-field because if we play on a hill, one team is seriously disadvantaged by having to attempt to advance the ball up-hill, which requires considerably more effort. The point generalizes to any factors (including changes in the game) that give one side an unfair (dis)advantage. A change in the game is one thing, but a change that creates a differential advantage is quite another. And with regard to the Jabulani, even some critics have admitted that the fact that this change affects everyone equally mitigates the criticism. As English goalkeeper David James put it, “It’s horrible, but it’s horrible for everyone.”

But it’s worth noting the limits of this level-playingfield argument. While it’s true that all teams are subject to the same change, it’s not true that everyone is affected equally. First, it seems to be goalkeepers that are complaining most, suggesting that there’s a differential impact on them compared to other players — and that matters, at very least in terms of the ego of goalkeepers vs the egos of those scoring the goals. (In fact some suspect that this is an intentional outcome of the change in the ball: it will result in more goals, and hence more excitement, hence making it a better TV sport for North American viewers in particular.) Second, it’s not clear that all teams will be affected equally. Particular ball characteristics are liable to suit some teams’ strengths and strategies better than others. So why the “field” may be “level” at a superficial level, we may need to look deeper if we’re really interested in deciding whether this particular change is, in fact, a fair one.

The second interesting thing about the controversy has been the response from Adidas, the company that designed the ball. The response from Adidas has mainly focused on the science, and on pointing out that change is always difficult at first. But Adidas also had a more interesting defence, namely accusing (some) critics of conflict of interest. (See this definition of ‘conflict of interest’.) In particular, the claim is that most of the critics are subject to a possible financial bias. According to this story,

[Adidas spokesman Brueggen] pointed out that if you look closely at the players and goalies making these accusations you’ll notice one common thread among them: the all have contracts with Adidas’ competitors.

Now certainly not all critics have been affiliated with Adidas’ competitors. The soccer-gear website ‘Soccer Cleats 101,’ for example, reviewed the Jabulani back in January, and expressed some of the same concerns. Still, it’s an interesting accusation. And as always with such accusations, interesting questions arise. First, can Adidas’ claim be backed up empirically? If we actually count up the critics and look at what companies they’re sponsored by, will we see the pattern that Adidas claims? If Adidas hasn’t done such a tally (but is simply working from a rough impression) is it fair to make the accusation? Is the suspicion enough? And if we do confirm such a pattern of bias, what’s the specific explanation for it? Is it a matter of players consciously promoting the interests of companies they’re affiliated with, or is it more likely to be a more subtle, subconscious bias? And, finally — setting aside the fact that professional sport is, itself, a big business — what lessons can we learn from this sports story, and apply to the world of business more generally?

(p.s. Those of you with an interest in ethical dimensions of sports should be sure to check out Wayne Norman’s blog, This Sporting Life.)

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