Ronaldo’s Coca Cola Controversy
Many soccer lovers are no stranger to the recent Coke controversy that happened during the Euro 2020 (The 2020 UEFA European Football Championship). At a press conference ahead of Portugal's game against Hungary on Monday, Cristiano Ronaldo removed two Coke bottles that were placed in front of him. Instead he reached out for his water bottle and said “agua”. This gesture was blamed as the reason for knocking off $4 billion in Coca-Cola’s market share. It also led to a ripple effect as other soccer players also followed Ronaldo.
However, despite being heavily blamed by the media, Coca-Cola's market value had already dropped by $4billion before Ronaldo. By Friday, June 11, Coca-Cola had 4.3 billion shares with a share price of $56.16, which accounted for a market value of $242 billion. At 9:40 a.m. EST, its stock price dropped by 1.6% to $55.26 and the market value had dipped from previous $242 billion to $238 billion, while Cristiano Ronaldo moved the Coca-Cola bottles at 9.43 a.m. EST.
In fact, many factors could contribute to the drop of Coca Cola’s market value. “For instance, at 9.40 a.m. EST, the whole US stock market was trading low. Ford Motor Company was down more than $2 billion in market value” (IESE Business School).
Although Cristiano Ronaldo’s gesture did not affect Coca-Cola’s market value directly, the Euro 2020 governing body told other soccer players not to reject sponsor’s (Coca-Cola) products in public. It is important to respect sponsors and their products, services used in the tournaments, because sponsors play an important role in any sporting events, by providing hospitality services, covering publicity, programmes, officials’ costs just to name a few. Sponsors also value their partnerships with sporting events and celebrities, as the partnership can advertise products and services, raise awareness of brand reputation and increase sales.
Speaking of which, let’s take a look at Cristiano Ronaldo again. Ronaldo has about 215 million followers on social media including Facebook, Instagram and Twitter. Through his interactions with his fans (massive amounts of likes, shares, comments or retweets), Ronaldo promoted his partners’ brands and products effectively. “All of Ronaldo's partners got a total of $176 million in media value from his promotional work on social platforms” (Badenhausen).
On the other hand, the pandemic makes everything harder for sports as in-person events cannot attract as many people as in previous years due to Covid restrictions. Transformation to digital sponsoring is on trend. For instance, JP Morgan Chase, the long sponsor of the US Open, published a series of virtual special events around its credit card unit. These events include “a virtual concert hosted by Serena Williams featuring the music of Khalid, Chloe x Halle, and Kane Brown, and a daily “Warm Up show” previewing the day’s matches” (Taylor). Chase also provides Chase Card holders with opportunities to meet with tennis celebrities and NBA players in a digital lounge for financial health chatting. By doing this, JP Morgan is able to reach a high number of viewers and promote engagement with current or potential customers, all of which is beneficial to increase customer loyalty and promote brand reputation.
A healthy sponsorship is a win-win for both holders and sponsors, while the stability of the partnership may be tested by player’s radicalism and the pandemic.