Will Iger do anything about ESPN’s ‘corrupt’ shoe deals?

Romenesko Letters
If Disney CEO Bob Iger does nothing about the shoe deals at ESPN, writes David Cay Johnston, “his inaction will only arouse suspicions about every journalistic enterprise Disney is engaged in, leaving doubt as to who may be on the take, whose agenda is being advanced by greasing palms and which critical stories are fueled by under-the-table payments to on-air employees or maybe those unseen producers who direct much of what gets on the air.” (Full letter after the jump.)

From DAVID CAY JOHNSTON: The payments that Disney lets some of its ESPN on-air reporters take can be described in one word: corrupt.

ESPN spokesman Josh Krulewitz asserts, “by any objective measure, Chris, Kirk and Lee’s on-air work is unassailable. Their content has not been compromised by this relationship.” That is simply not true. If the shoe were on the other foot Mr. Krulewitz would be telling a very different story.


What if Citibank paid the Wall Street Journal’s David Wessel? The Patton Boggs lobbying firm paid ABC’s Jake Tapper? PBS Newshour’s Paul Solmon by Moody’s? Their unassailable work would no longer be trustworthy. Indeed, imagine that Richard Sandomir, the NYTimes sports reporter who broke this story, was being secretly paid by Fox Sports and that news broke right after his piece on the secret payments to ESPN reporters was published. Oh, the howls we could expect from Mr. Krulewitz, whose employer competes with Fox to air games.


Chris Fowler, Kirk Herbstreit and Lee Corso (who were or are on Nike’s payroll) and Erin Andrews (on Reebok’s payroll) are doing work that is entirely assailable every time footwear comes up, whether in reports about those ethically challenged deals footwear companies make with supposedly amateur college teams or during color commentary on whose feet slipped on wet turf.


But the Unethical ESPN Four are just part of a much bigger problem, one that now casts a shadow of doubt on all of the news operations of the Walt Disney Company, which owns ESPN and also ABC News.


That the other networks evidently let their “color” commentators take money from sources and advertisers only adds to the problem. It does not excuse what Disney allows.

Sandomir’s article hints that these deals to take money from two of the most powerful and influential companies in sports may not have been covered by any policy at Disney. As Sandomir reported:

“Corso, Fowler and Herbstreit’s deals with Nike were never announced or disclosed to viewers. ‘We were unaware of these deals,’ Krulewitz said” and then Sandomir reports “ESPN said it allowed reporters and personalities to sign endorsement deals on a case-by-case basis.”

So were these deals secret arrangements between the footwear companies and the sports journalists? Or were they Disney-approved? If so, by whom? And if unapproved, what will be done about it?

What ethical standards, if any, does Disney CEO Bob Iger apply to Disney journalists? Surely as a highly paid manager Iger understands the need for consistent written policies on the conduct of employees and contractors so these questions should not require some ad hoc response, but must be already written down in a manual from the personnel office, right? The Disney board has ethical standards, including who can pay Disney directors, so its not like ethics is an ignored issue at the highest levels of Disney.) Just what policy, if any, does ESPN have on its reporters and commentators taking money from people who are inherently part of what they cover? What distinctions does it draw between “reporters” and “personalities” who appear side-by-side covering the same games, the same events, the teams, all influencing public perceptions? And what would be the rationale for any such differences, if they exist, among its on-air talents?

Of course, Iger can do nothing. He can look the other way. But if Iger does nothing his inaction will only arouse suspicions about every journalistic enterprise Disney is engaged in, leaving doubt as to who may be on the take, whose agenda is being advanced by greasing palms and which critical stories are fueled by under-the-table payments to on-air employees or maybe those unseen producers who direct much of what gets on the air. In such an environment the scrupulously honest get smeared by the dishonest, both among their peers and their superiors who do not articulate, teach and enforce clear and unambiguous policies.

And where does Bob Iger’s Disney draw the line? Would Disney let a quarterback hire one of its ESPN personalities as master of ceremonies at his family or college team reunion? How about getting paid by a firm that managers the money of players, coaches and team executives?

All organizations make mistakes. All organizations have employees whose actions raise questions. The test of integrity is how you deal with them — forthrightly or by trying to explain them away with nonsense, as ESPN is trying to do.

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  • Anonymous

    The difference is simple. When Bartiromo pleases a CEO or a company as she rides on a private jet she is using the name of the company in the report on air. If Cramer has a buddy at a company and he pushed their stock he is using the name of that company and their stock symbol.

    If Corso interviews a coach that has a shoe deal with Nike that coach may wear the swag of Nike but there’s a line that the interview doesn’t cross and that’s mentioning the name of Nike. And really do people watching a coach with a Nike cap on truly say to themselves “he’s being paid by Nike?”

    More than likely not. Sports viewers aren’t that smart. The suckers are over at Bartiromo and Cramer where it is quite blatant when they promote a company on the air. After getting a ride on a corporate, private jet, don’t expect Bartiromo to ask difficult questions. No way. There’s no direct connection with the football concept that you can clearly make.

    And this is simply about a pair of sneakers. This is how this conversation and the article by Jim develops. We may be in total agreement with the institutional portion of your statement. But let’s stick to these anchors wearing and selling sneakers.

    All else is irrelevant.

  • http://pulse.yahoo.com/_4J2BCY6BWPCDVUNY5DPUVFRZLQ Joe

    We’re in agreement that this isn’t about the ESPN anchors shilling for Nike. But I don’t understand why you don’t think they can’t influence stories the way Cramer or Bartiromo can? Doesn’t the glowing feature they might do on a college football coach who also has a deal with Nike become suspect the same way Bartiromo’s CEO piece would be? Shoe companies are so entrenched and influential in college sports that having any journalist with an endorsement deal from those companies immediately poisons the well when it comes to their coverage. This isn’t simply about selling a pair of sneakers. It’s about reaping billions of dollars from the success of institutions (public and private) and coaches and investing in future professional athletes they can also profit on.

  • Anonymous

    I hear you Joe but no matter whether these sports anchors have shoe deals or not they still have to report what’s going on during the game and not what the players or they are wearing. That’s the difference I see. Anchors verbally promoting Nike or anchors verbally promoting athletes wearing Nike, well that just isn’t going to happen without Disney ABC’s approval. They have the most solid group of attorneys there so that type of integration will not happen unless it is termed product placement for which any brand would pay a fee. I see no issue with that approach as it is done all the time. Where I do see as an issue is from the area of influence. If Maria Bartiromo is on a plane with a company CEO, she will no doubt do a positive story on that CEO. That’s a huge conflict of interest. If Jim Cramer says to purchase a stock and he has some interest in that company, then there’s a conflict of interest. Because it is directly connected to what they say on the air.

    In this case I see no problem. As long as they are not wearing swatch from any of the companies they represent on screen and if they do that it is understood (not necessarily from the viewer standpoint) that there is some sort of payment for that integration.

    One of ESPN’s college football analysts lost a beer deal because of the liquor connection. That one is purely simple. College kids and a sports analyst on a network promoting beer in any way is way beyond appropriate. But one with a sneaker deal?

    In addition networks these days OK deals like this in in lieu of paying them big salaries that are non-existent in broadcasting these days. The bottom line in all of this is Lee Corso or any of the other people mentioned with deals could sell me water at a fire.

  • Anonymous

    I hear you Joe but no matter whether these sports anchors have shoe deals or not they still have to report what’s going on during the game and not what the players or they are wearing. That’s the difference I see. Anchors verbally promoting Nike or anchors verbally promoting athletes wearing Nike, well that just isn’t going to happen without Disney ABC’s approval. They have the most solid group of attorneys there so that type of integration will not happen unless it is termed product placement for which any brand would pay a fee. I see no issue with that approach as it is done all the time. Where I do see as an issue is from the area of influence. If Maria Bartiromo is on a plane with a company CEO, she will no doubt do a positive story on that CEO. That’s a huge conflict of interest. If Jim Cramer says to purchase a stock and he has some interest in that company, then there’s a conflict of interest. Because it is directly connected to what they say on the air.

    In this case I see no problem. As long as they are not wearing swatch from any of the companies they represent on screen and if they do that it is understood (not necessarily from the viewer standpoint) that there is some sort of payment for that integration.

    One of ESPN’s college football analysts lost a beer deal because of the liquor connection. That one is purely simple. College kids and a sports analyst on a network promoting beer in any way is way beyond appropriate. But one with a sneaker deal?

    In addition networks these days OK deals like this in in lieu of paying them big salaries that are non-existent in broadcasting these days. The bottom line in all of this is Lee Corso or any of the other people mentioned with deals could sell me water at a fire.

  • Anonymous

    This is a good story that some good investigative team needs to take even further. The corrupt shoe deals are something that have stunk up collegiate and pro sports for years. When a college coach can draw in megabucks for touting and requiring his players to wear a certain shoe, there is something indeed wrong. As for my myself, I refuse to buy products sold by the blatant payola pushers. And when I was a golfer that included a lot of lost golf balls.

  • http://pulse.yahoo.com/_4J2BCY6BWPCDVUNY5DPUVFRZLQ Joe

    I disagree. ESPN personalities report on stories that directly affect viewers. College and professional sports teams have very lucrative deals with these shoes companies, and what these teams do can affect people on a very direct financial level from getting public funds for a new stadium to destroying a city’s economy by moving. To think that sports is just about game scores and highlights is shortsighted.

    It’s not that a reporter is going to shill the new Air Jordan; it’s that he or she is going to slant or sotten coverage about these large institutions–or at least have that appearance. And really, that’s the whole point of conflict of interest: the appearance of impropriety.

  • Anonymous

    Great story but limited in what the effect these deals will have on the actual on-air reporting by these ESPN anchors. There’s nothing these sports reporters can do to effect what goes on the air at ESPN. Let’s think about how CNBC got in hot water for Maria Bartiromo accepting flights from the CEO’s of a company she covered in her segments. And if we look at Jim Cramer’s antics that put him in hot water by giving advice on stocks from companies he was intimately involved with, these mistakes are much more critical. These two have access to the air to report stories that directly affect viewers. These people over at ESPN do not. What can they do to promote a sneaker? Lift their feet up and show off their kicks? Let’s focus on the people who can effect real issues related to those watching television. Not a bunch of sports anchors.