Nike Inc. (NYSE: NKE) has a long history sponsoring players and making an extremely powerful brand for itself. However the Swoosh could be losing one of the world’s most popular and followed tennis players due to a drug test violation. The company suspended its ties with Russian tennis star Maria Sharapova after she announced a failed drug test at the Australian Open.
This is not the first time that Nike has taken precautionary moves like this. Other athletes have seen similar pitfalls and recoveries.
The deal that Nike has suspended is perhaps the most lucrative that Sharapova has going for her, valued up to $12.5 million annually. With an eight-year life to the contract, its total value is estimated to be about $100 million.
According to Forbes, Sharapova was the highest-paid female athlete between June 2014 and June 2015, earning nearly $30 million in just that one-year span. An even more staggering feat is that Sharapova has held this title of the highest-paid female athlete for the past 11 years.
It is no doubt that her name is synonymous with brand strength and Nike is willfully suspending a powerful ally. So how will Nike handle this situation?
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