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AT&T Cuts Ties with USA Gymnastics after Sexual Abuse

The Dallas Morning News, January 24, 2018

AT&T announced that it is cutting ties with USA Gymnastics, after more than 160 women said they were sexually abused by Dr. Larry Nassar and some questioned whether the governing body did enough to stop him.

In a statement, the Dallas-based telecom giant said it is "suspending our sponsorship of the organization until it is re-built and we know that the athletes are in a safe environment."

AT&T was supposed to be the title sponsor of a USA Gymnastics competition in early March. Its name will be removed from the event, an AT&T representative said.

AT&T is one of at least five major corporate partners to distance itself from the sport's national governing body. Under Armour ended its sponsorship deal earlier. Hershey, Kellogg and Procter & Gamble have declined to renew existing sponsorships, according to ESPN.

“The terrible abuse suffered by these young women is unconscionable,” AT&T said in a statement. “We remain committed to helping these young athletes pursue their dreams and hope to find other ways to do so. We stand ready to step back in when USAG has fully addressed these tragic events.”

USA Gymnastics has been called for comment.

Nasser was sentenced by a Michigan judge Wednesday to up to 175 years in prison for his crimes. He was the USA Gymnastics team doctor for almost 20 years, ending in 2015. Numerous Olympic medal winners, including Aly Raisman, Gabby Douglas and Simone Biles, have said they were abused by him.

Raisman issued a blistering criticism of USA Gymnastics and the U.S. Olympic Committee and called for an independent investigation of both organizations.

In her victim statement to Nassar, she said USA Gymnastics was "rotting from the inside."

"To believe in the future of gymnastics is to believe in change," she said in court last week. "But how are we to believe in change when these organizations aren't even willing to acknowledge the problem? It's easy to put out statements talking about how athlete care is the highest priority. But they've been saying that for years, and all the while, this nightmare was happening."

USA Gymnastics, based in Indianapolis, has been reeling in the wake of the sexual abuse scandal. It has been sued by some of the gymnasts abused by Nassar. Its former president, Steve Penny, was ousted last year. Earlier this week, three of its board members stepped down.

It has ended its affiliation with the Karolyi Ranch in Huntsville about 170 miles southeast of Dallas. Some of Nassar’s sexual abuse of the young gymnasts took place at the ranch, which was the official team training center.

USA Gymnastics reported total revenue of nearly $34.5 million in 2016, according to financial records filed with the IRS. Marketing revenue has accounted for up to $9.4 million — or more than a fourth — of USA Gymnastics' total revenue, according to The Orange County Register.

AT&T is one of the most active corporate sponsors in the country. It spent nearly $200 million on sponsorships in 2016, tying for fifth place with athletic apparel company Adidas, according to ESP Properties, a Chicago-based firm that tracks brand sponsorships. AT&T's name is on numerous athletic complexes, including the stadium of the Dallas Cowboys, the arena of the San Antonio Spurs and the ballpark of the San Francisco Giants.

By sponsoring sports competitions or other events, companies can "borrow the imagery, the loyalty and the goodwill of those organizations," said Jim Andrews, senior vice president of ESP Properties. For example, a brand can become associated with the hard work and patriotism of Olympic athletes, he said.

When crisis or scandal strikes, corporate sponsors sometimes respond by abandoning the sponsored athlete or organization. AT&T and Gatorade were among the brands that dropped Tiger Woods after he crashed his SUV and admitted he was unfaithful to his wife in 2009. Sony is one of the brands that has shunned FIFA, the soccer governing body, after reports of corruption in its ranks.

Andrews said it's "a prudent move" for companies to back away from USA Gymnastics.

"The sponsors will take their lead from the public and the athletes," he said. "When those stakeholders say, 'We are now comfortable being part of USA Gymnastics and we trust the horrible things that have happened in the past will never happen again,' that’s when it is safe for the sponsors to return.”