Kellogg
The Kellogg Company’s stock took an immediate dive following its decision to drop Michael Phelps after the news of the swimmers bong hit photo came out to the public. Come to find out, drug reform organizations make up a big amount of the Kellogg stock. What began as a coordinated boycott, quickly escalated into full-blown media frenzy as major news outlets picked up the story. Digg.com (a pot friendly website) began directing massive traffic to news coverage that was critical of Kellogg’s anti-marijuana posturing; which increased the campaigns visibility among likely supporters.The negative publicity has impacted the company. Before Kellogg got rid of Phelps, it was ranked ninth out of the 5,600 Vanno Reputation Index monitors; now it’s ranked 83. Dropping Phelps has hurt their company a lot more than Kellogg had expected, and I believe it was a decision on a business side; but for the reputation and the “good name” of Kellogg, I think the decision was good. If Kellogg would have kept Phelps with their company it would have sent a bad image to children about drug use.
Speedo
Speedo decided against dropping Phelps after his marijuana incident. I think this was a good decision for the Speedo Company because it is a big force in the swimming world, and Michael Phelps is the best swimmer in the world. To drop one of the biggest swimmers would have been drastic drop for the Speedo name. Speedo understands that Phelps is at an age where he is going to experiment. Phelps is more in the spot light than the average college student; but he is still a human being who is going to want to go out and party and have a good time. Mistakes will be made and it would be difficult to look at Phelps any different during the off season.
Moral Clauses
Olympic athlete’s sports contracts do have moral clauses which attempt to keep athletes in line while under contract. This gives the endorser of marketer the right to break a contract if an athlete acts up in some way. How contracts work when an athlete messes up is that they with-hold payments to the athlete. Armstrong was with-held $5 million after winning his sixth Tour following allegations of doping. US Anti-Doping Agency has stripped Armstrong of his titles. The implications that are put on Olympians are made so that those athletes can be looked at as idols and models for the younger generation and place good morals to young athletes around the world.
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