If you watched any television this past weekend, you know all about the national-anthem protests. On Friday, September 22, President Trump blasted the National Football League, stating that any player who kneels during the anthem should be fired. Trump doubled-down on his assertion using language not fit for print. His faithful followers then proceeded to call for a boycott of NFL sponsors.
Silence is sometimes deafening. Prime NFL sponsors largely remain silent on this issue, and for very good reason. The organizations that make professional football possible reads like a “who’s who” of blue-chip stocks. Iconic names such as Visa Inc (NYSE:V), Ford Motor Company (NYSE:F), Nike Inc (NYSE:NKE), McDonald’s Corporation (NYSE:MCD) and Anheuser Busch Inbev NV (ADR) (NYSE:BUD) are routinely featured throughout NFL broadcasts.
Furthermore, some NFL sponsors are organically integrated within the game. A great example is Microsoft Corporation (NASDAQ:MSFT), whose Surface tablets are deployed during video reviews for contested referee calls. Football fans consciously or subconsciously associate marketed products with the league.
Unfortunately, the catalyst for the anthem protest is extremely controversial and digs deeply into painful racial overtones. Any business would ordinarily be wise to punt this away with innocuous PR statements. However, President Trump’s influence reaches far and wide. NFL sponsors can’t risk alienating its minority consumers, but they can’t take conservative voices for granted, either.
NFL Sponsors Between a Rock and a Hard Place
On the surface, the anthem protest seems like the worst thing that could happen to NFL sponsors. Punting on the issue risks offending not only conservatives, but also service members and veterans (a big no-no). Standing in solidarity with the protesters would obviously exacerbate the situation.
But siding with President Trump is just as bad from a PR perspective. First, it’s Trump. If only he could have conveyed his disappointment in an evenhanded tone! Instead, our Commander-in-Chief deployed regrettable language that poured gasoline on smoldering flames. Even his many messages through Twitter Inc (NYSE:TWTR) are comparatively tame.
Second, and more important, the concept of “America” and “American” has multiple meanings. The African-American experience is different from white America, or other ethnic groups. Naturally, everyone views the anthem protest from an array of angles and opinions. Thus, making a strong-sided political or racial statement could be catastrophic for NFL sponsors.
To further add to the complexity is the real-time case study of Under Armour Inc (NYSE:UAA). One of few NFL sponsors to voice an opinion, Under Armour said nothing by saying everything. UAA tweeted that it “stands for the flag and by our Athletes for free speech, expression and a unified America.” Few were happy with such useless platitudes. Coincidentally, UAA stock is a real stinker.
In reality, NFL sponsors can’t afford to speak out about the anthem protest. V stock or NKE stock may be at nearer-term risk from angry conservatives, but saying anything would lead to disaster. UAA proved that point well.
So are major backers of professional football up a creek without a paddle? Not really.
The Anthem Protest Controversy Will Fade
The bark is always the loudest during the immediate aftermath of a controversy. But over time, Americans will get over it. As I argued before about the recent Equifax Inc (NYSE:EFX) scandal, “there’s nothing like coupons and commercials to sway American fury.”
Pro football is our nation’s most popular sport. I’m supposed to believe that Americans will tune out altogether and boycott NFL sponsors? Yeah, right!
Moreover, animus towards America was not the catalyst for the anthem protest. Rather, it’s law-enforcement agencies targeting people based on their skin color. This is an issue that goes back well before Colin Kaepernick first “took a knee.”
As an Asian American, I’ve never been targeted by police unjustly, and therefore, I never felt the compulsion to dissent. But I imagine that if I were black, and I was frequently accused of committing a crime, then the long stares and unfair stop-and-searches would be infuriating. But I suspect that the people attacking participants of the anthem protest have never been tested this way.
Finally, we should all consider that the protests are peaceful: no rioting, no incitement to violence. The act of taking a knee is also tame. No NFL player to my knowledge has burnt the flag or desecrated it. They are simply affirming that the Constitution should provide equal protection under the law, irrespective of skin color.
For now, the issue is an extremely contentious one. NFL sponsors may even take a revenue hit in the immediate time frame. But eventually, the controversy will fade like all controversies do. At that point, investors can get back to the business of winning, unless, of course, you own UAA stock.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.