Why businesses are ditching Australian sport

Sponsors have been dropping like flies, following a contentious few months for Australian sport. Photo / Photosport

Businesses are fleeing Australian sport following several high-profile scandals that have rocked the country's sporting landscape.

The latest to do so is Land Rover, which has taken back a sponsored vehicle from Australia's factious fullback Israel Folau.

According to the Daily Telegraph, the car was part of an $850,000 deal Land Rover had with Rugby Australia.

The British brand - which said Folau was never an official ambassador - reportedly repossessed the car within a week of Folau's anti-gay sentiments on social media.

This is the first financial hit for the rugby star who escaped punishment from Rugby Australia.

Land Rover also dropped former All Black Dan Carter in February last year following his drink-driving incident in France.

Massey University marketing professor Valentyna Melnyk says associations with celebrities and athletes can often have negative consequences for companies, which is why Land Rover elected to distance itself from Folau.

"From the company's point of view, it's actually not always a great idea to cooperate with celebrities because they're extremely expensive and any little damage would be very public and therefore spill over to the company as well," says Melnyk.

"It comes with upsides and downsides. So on the upside, [companies can gain] the spill over effects of all the positive associations [with celebrities].

"But if something goes wrong for the celebrity - we've had cases where Nike had problems with Tiger Woods and [Lance] Armstrong and with other celebrities - it can go [the other way]."

Wallabies fullback Israel Folau in action against the All Blacks. Photo / Brett Phibbs

Land Rover follows several other large companies who have chosen to end their associations with Australian sport, in some shape or form.

Cricket Australia's test sponsor Magellan ended its deal following the ball-tampering scandal involving David Warner, Steve Smith and Cameron Bancroft during Australia's series with South Africa earlier this year.

The investment firm said the actions of the Australian players was "so inconsistent with our values", and ended its three-year deal with the side.

Athletics company ASICS was the next brand to jump from Australian sport's sinking ship.

"[The actions of the players] are not something that ASICS tolerates and are contrary to the values the company stands for," it said in a statement.

The age of incessant social media has brought athletes and fans closer than ever before but it has also meant the actions of athletes are under greater scrutiny.

Folau is just the latest in a string of high-profile athletes who have wound up in trouble for their actions on social media, which has impacted them personally and professionally.

"A lot of companies underestimate how badly it could really backfire if they associate themselves with a celebrity," says Melnyk.

"Especially nowadays when there is social media, any little thing could really backfire. If a celebrity has a downfall in the consumer's eyes for whatever reason, or has some controversy, if the company has built those associations with the celebrity in the consumer's eyes, whatever damages happen to the celebrity also still goes over to the company."

Folau's initial comment that sparked public uproar was made on Instagram, six months after tweeting his opposition to marriage equality.

"HELL," he responded to a fan's comment asking about God's plan for gay people. "Unless they repent of their sins and turn to God."

Folau then doubled down on his initial comments by posting an 11-minute video to his 124,000 followers on Twitter, claiming that homosexuality would be punished by God.

Australian cricketers David Warner and Steve Smith. Photo / Alan Gibson

Melnyk says controversies like the Folau furore and Australian cricket's cheating scandal can also affect the brand of the teams themselves.

"We also see similar things in New Zealand, where we've had issues with the All Blacks after some of the toilet scandals and [other controversies].

"It definitely damages both, it would damage the team … but it can also damage the companies that they have been associated with.

"However, for companies the damage could be even larger because it's kind of one-on-one.

"They act as a human face for the company, a proxy, but with any team, people are aware there's more than one player, so if you talk about a sports team, unless it's individual sports, there's many players so therefore the damage for the actual team is diluted compared to say a company that has publicly associated itself with the particular celebrity."

Rugby Australia has chosen to stick by their controversial star, and didn't punish Folau despite these new reports that it might cost them financially to do so.

While RA disagrees with Folau, chief executive Raelene Castle said they must also respect his right to express his religious beliefs. She also said that penalising him would alienate a large section of their Christian supporter base.

Meanwhile, Wallabies coach Michael Cheika says Folau would refrain from posting further inflammatory content for the sake of his teammates as they prepare for the three-test June series against Ireland.

"What's happened has happened, it's been dealt with now and it's not going to be ongoing, so it's not going to be an issue," Cheika told Macquarie Sports Radio.

"He understands that he doesn't want to affect the team around those sort of things. And like I said, if it's not ongoing then it's not going to be an issue.

"Izzy wants to be part of the team, not just now but in the future as well. Some people think he's using it as some kind of tactic to get out of playing but if he wanted to go, he could go easily.

"He wants to play rugby."