Dealing With Celebrity Controversy

Last week, Ivanka Trump announced that she would shut down her signature lifestyle brand, stating as the reason her full-time focus, for the foreseeable future, on her political and advocacy work in Washington D.C.

Many analysts noted another likely factor, however, namely that sales of her branded goods had plummeted over the past two years as some consumers boycotted the line to protest her politics and a growing number of retailers discontinued the program. Her father’s Trump brand has also suffered since the start of the Trump presidency; several retailers ended their support, either because of weakening sales or as a statement against some of the Administration’s more controversial positions, or a combination of the two.

In both of these cases, controversies and divisiveness surrounding the two celebrities have had an impact on sales of their namesake brands. But that is not always the case in the current environment. Times have changed from the days when any whiff of controversy—from scandals to strong political views—would kill a celebrity licensing program, as the landscape of celebrity licensing has become much more vast and varied, and as consumers have become more divided in their views.

As a result, the thought process licensees must go through as they deal with celebrity controversy has become much more complicated. Some of the factors at play include:

• The type of infraction. Racist or homophobic comments often cause a big hit to a licensing program and other commercial activities, at least in the short term, while licking a donut displayed in a shop (which Ariane Grande once did) may have little effect. With the list of bad behaviors—lying, political views, dog fighting, affairs, doping, etc.—growing daily, licensees need to take a look at where they believe a particular infraction falls along a spectrum from career-ending to minor, or more importantly, where their customers perceive it to fall.
• The nature of the audience. Some celebrities have fan bases that are very loyal, do not care about controversy, and/or are following these personalities because of their beliefs or on-the-edge lifestyle. When some of Paula Deen’s past comments that were widely considered racist came to light, a portion of her licensee roster and fan base cut ties, but a percentage of both stayed with her. Phil Robertson’s anti-gay comments did not seem to make any difference to many fans of him and his show, Duck Dynasty, from which he was briefly suspended. And comedian-influencers such as PewDiePie and Logan Paul have been embroiled in controversies (many times, in the case of the former) that would likely end the career of a mainstream celebrity. But they remain among the most popular social media influencers and retain some of their commercial partners as well.
• Expectations for the celebrity. When Miley Cyrus began behaving in a way that was contradictory to her reputation as one of the Disney Channel’s leading stars, her reputation suffered (although she now has a high-profile collaboration with Converse, among other partnerships). When Kanye West puts forth divisive views on Twitter or is otherwise caught in controversy, on the other hand, his fashion empire does not seem to be affected at all; his fans may in part be attracted to him and his products due to his outspokenness.
• How close the controversy is to the celebrity’s core expertise. The revelation that Lance Armstrong had been doping resulted not only in the wiping of his Tour de France wins from the history of cycling. It also ended his product partnerships, notably his exclusive fitness equipment line with Dick’s Sporting Goods. A number of baseball players have seen their commercial prospects virtually disappear due to admitted or alleged steroid use. There are certainly exceptions to this rule, however. In the world of chefs, Paula Deen faced controversy when it was discovered that she was being treated for diabetes even while promoting a diet of fried foods and desserts, while Robert Irvine admitted to dissembling on his resume. Both still oversee licensing programs, although Deen’s, as noted, is more limited than in the past for multiple reasons.
• Factors outside of the scandal itself. Martha Stewart’s licensing program has seen declines since she spent time in jail for insider trading. But many observers attribute that to factors such as challenges in the magazine business, competition in the lifestyle space, and business decisions (e.g., her parallel Macy’s and JCPenney exclusives and subsequent lawsuits). Her crime did not seem to bother most of her fans much. Similarly, the discovery of issues such as substance abuse and affairs in Tiger Woods’ personal life caused many (but not all) of his licensing and endorsement partners to break with him; however, the decline of his golf game has at least something to do with his inability to bounce back commercially (so far).
• When and how often the behavior occurred. Time heals, and many celebrities recover, at least in part, after the initial shock has worn off. Giuliana Rancic lost some of her TV gigs after a 2015 on-air comment that many interpreted as racist—she said that impression was due to editing of the taped segment—but she has gotten those jobs back and currently lends her name to products from fashion to prosecco. The relatively new #MeToo movement has ended the licensing activities of celebrities such as Mario Batali and Russell Simmons, but it may be that some of their fans forgive and forget over time.

Typically, a licensee’s or collaborator’s decision-making process when it comes to controversies surrounding the celebrities they work with requires a careful analysis of all of these factors. Bear in mind that—given the polarized opinions of the public on almost any topic and the ability of social media to amplify these divisions—the decision to cut ties, or not, is often nearly as controversial as the celebrity behavior itself.