Penn State Scandal is Bad Publicity for Nike

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Since the recent Penn State child rape scandal, head football coach Joe Paterno has been disgraced in the media and public view. He was fired from his position and his name was removed from the Big Ten championship trophy. The same day, at least six advertisers cancelled their broadcasts on ESPN during Penn State games. However, Nike has decided to stand by both Penn State University and Joe Paterno. Not only is the company continuing their sponsorship of the PSU football team, but it has shown no signs of renaming the building on its Oregon corporate campus named for the formerly beloved coach. Ironically, the building is the Joe Paterno Child Development Center.

Despite the fact that Nike has remained loyal to disgraced public figures before (remember Tiger Woods?), and it paid off, this situation seems to be different. The irony of the building's purpose and the current situation is incredibly alarming to critics, and will be to consumers as they become aware. If a prominent university's name can be tarnished so quickly, so can a leading sports company's.
No matter what your stance or viewpoint is about Paterno and Nike's support, Nike, in my view, has three options: rename the building, put into effect a huge public relations plan, or do nothing. With option 1, if the company decides to rename the building, it would mean going against their past decisions to stay loyal. Nike can't rename the building and not withdraw their sponsorship of the football team. It contradicts itself, and both critics and consumers alike would notice. With option 2, Nike would need to keep their decision to remain loyal as quiet as possible. The more it spreads, the more Nike's name can go down with PSU's. This however, not only will cost time and money, but it's also awfully hard to do, especially in a world where social media helps spread news so quickly.
Option 3, on the other hand, seems to be what Nike is doing now: riding it out and waiting, just as they've done before. They can wait for the storm to blow over and for people to forget. And even if Nike comes under attack for their decision in continuing their sponsorship, bad publicity is still publicity, right? 
Still, whichever decision Nike makes, this scandal is dangerous for the company.



For further reading: http://www.forbes.com/sites/clareoconnor/2011/11/14/nike-wont-drop-penn-states-paterno-so-we-should-drop-nike/