BrandRepublic's MediaBulletin has an article that mentions in passing the use of scenario planning in the highly volitile sports market. I believe that scenario planning can help substantially reduce, but never completely eliminate, the likelihood of "out of the blue" events (see below).
In short, when the mud flies, does it stick to the brands?
According to David Abrahams, senior vice-president of Marsh Risk Consulting Practice and an expert in brand risk, there is often a demonstrable link between the way in which a crisis is handled by a company and what happens to that business and its associated brand. 'The way in which any crisis is handled becomes a visible test of management capability,' he says.
'If that crisis arises from a fundamental breach of trust or performance, the compound effect of the bad handling can be devastating.'
The size of the problem faced by sponsors relates closely to an incident's shock value in media terms. For Alun James, formerly group managing director of Hill & Knowlton Sports Marketing, who recently left to set up FourGritti Sports and Sponsorship, there are two distinct types of crisis in sports sponsorship.
'The first can be reasonably anticipated while the second is totally out of the blue,' he says. 'If you are a sponsor of a sport, such as sailing or motor racing, where accidents regularly happen, then it is straightforward to undertake scenario planning and have a rigorous and robust response prepared.
'The unexpected crisis, such as Gary Neville's observations on the obtrusive nature of commercialism in charity football initiatives...is more difficult to deal with. The impact can be mitigated by clear processes and lines of responsibility, even if the specific nature of the crisis could not have been anticipated,' James adds.
In these instances of crises that cannot be anticipated, he believes that logic takes over to a certain degree. 'In many ways, the laws of physics apply when in a crisis: every action should have an equal and opposite reaction,' he argues. 'If the crisis is serious, then the reaction of the sponsors should demonstrate concern and action. An overreaction can create an issue when little exists, while an underreaction can make the sponsoring company look indifferent, disorganised and out of touch.'