USA Shooting Auction Debacle Shows Importance of Vetting Partners
14 Nov, 2018By: Mary Helen Sprecher
Vetting your sponsors and business partners carefully has perhaps never been as much of an issue as it has over the past week.
National governing bodies and sponsors have shown they can be quick to distance themselves from athletes who commit high-profile faux pas (as an example: Speedo and Ralph Lauren dropped swimmer Ryan Lochte after his embarrassing “LochMess” incident at the Olympics in Rio). But what about high-profile issues where the sponsor becomes the problem? And where the NGB refuses to back down?
USA Shooting got an unpleasant taste of that recently. The organization proudly announced that its national team, which is officially backed by the United States Olympic Committee, was "partnering with Gunbroker.com and the nation’s gun manufacturers to support America’s shooting team” with a series of fundraising gun auctions.
Problem was, the Gunbroker.com site, it was quickly noted in the mainstream media, is an outlet for Holocaust and Nazi memorabilia sales.
The news broke on the heels of the shooting at the Tree of Life Synagogue in Pittsburgh, heightening the firestorm of attention. NBC News noted that among the materials being sold on the site were the following:
A replica Nazi canister of Zyklon B, a type of cyanide gas used to kill thousands of Jewish prisoners in the Holocaust that the sellers says “would definitely get people’s attention on a desk top or mantle!”
A concentration camp prisoner uniform billed as “all original and in good used condition” for $75,000.
A book called Holocaust Hoax Exposed. The seller encourages people “read the truth and get the facts as you never knew before about the biggest lie ever told!!!”
Objections to the site came from the Anti-Defamation League, as well as from federal lawmakers, who called upon USA Shooting to cut ties. And even the USOC chimed in.
“Paraphernalia that celebrates hatred should be rejected in every form," said Patrick Sandusky, a USOC spokesman. "We encourage all members of the movement to demonstrate the Olympic values every day and we are discouraged by this action."
For its part, USA Shooting told SDM, “Our relationship with Gunbroker in no way signifies our approval of these items, just as we don’t approve of every item or the editorial on the websites and social media platforms that we use to promote our sport. We use Gunbroker.com with a very specific purpose of hosting auctions of donated firearms to raise money for our team and athletes. That is the current partnership arrangement.”
The organization did not respond to a further query as to whether the partnership with Gunbroker would be re-evaluated down the line, or perhaps terminated later.
With this problem standing as one of the leading examples of “what not to do,” the question becomes where and how to investigate possible sponsors. And obviously, in an era of social media and the 24/7 news cycle, it has never been as important.
So what are some steps event owners and rights holders can take? According to every source out there, there is simply no substitute for due diligence. And it’s essential to apply the same type of oversight that could be used when taking on any business partner.
“The best way to prepare for a journey into a new business partnership is to do just that—prepare, says Fabian Kaempfer, Chocomize, as quoted in ReadWrite. “Examine the relationship from every possible angle and be very technical from the beginning about what you aim to achieve. This will save you a lot of heartache down the road. Make sure this will result in a mutually beneficial relationship for both parties by eliminating any doubts, questions and concerns you may have. Assign an experienced liaison to the task of vetting these opportunities. They should be well equipped to catch any “holes” in proposals and understand how the new relationship will fit into the company’s existing infrastructure.”
Doing a background check is also essential, says Peter Minton of the Minton Law Group, PC, also in the ReadWrite article.
“One of the most surprising aspects of the community is the amount of unsavory and downright fraudulent characters there are lurking in the weeds who want to take your money, equity or time,” Minton notes. “To protect your company or investment, do a thorough job diligencing the backgrounds of anyone who will be in a position of power within your company. A Google search is a good first step, but a knowledgeable agency can dig up whatever black marks your potential partner would rather you not know about. Hopefully their record is clean, but if not, there is no excuse for not finding out until it is too late.”
Making mistakes in establishing partnerships is nothing new. Inc. Magazine featured an article, “11 Questions to Ask a Potential Business Partner.” In it, it noted, “Thirty-two percent of Inc. 500 CEOs say their biggest mistake in the first year of business was either a bad fit with an employee (20%) or a partner (12%). (The only other startup problem that was more common was not having enough capital.) And these are the problems of successful entrepreneurs.”
The article notes that in terms of partner fit, there are two potential hazards, “one mundane and one more nefarious. The mundane is when there's a miscommunication or lack of communication about the business. The nefarious is when one party is willfully withholding or distorting important information from the other.”
Among the questions recommended, two stand out; these may be the most relevant:
What exactly does (will) this company do?
What behavioral values are most important to this company?
Are these values nonnegotiable? (Will we actively get rid of people who don't exhibit our values?)
How important is culture to us? Do we want to invest in it? At the expense of other investment?
Do we have a preferred exit plan? Timeframe?
In the ReadWrite blog, Shawn Porat of Fortune Cookie Advertising notes that nothing, but nothing, can take the place of research:
It’s very important to choose the right people to partner with. The wrong choice in this area can have disastrous consequences. That’s why I avoid making rash decisions based solely on obvious factors such as how successful and experienced the partner is. While these are important things to consider, I also look more deeply at their core values and long-term goals.
Some of this can be done by researching their history, online presence and overall reputation. More than anything else, however, I make sure that I talk to them a great deal before signing any agreements. I spend plenty of time communicating back and forth with them online, by phone, Skype or however is convenient. This gives me a good overall sense of who I’m dealing with and how compatible we are.
Throughout the history of sports, there have been numerous examples of corporate sponsorships and partnerships that went wrong. Those range from simply missing the mark to going epically bad. USA Shooting isn’t the first company to make a questionable alliance. And as a smaller Olympic sport, it struggles for visibility and funds, unlike more mainstream pursuits. What remains to be seen, however, is what it will do in the face of mounting criticism.