By Douglas Price
July 16, 2020
Last month, FedEx submitted a Form 8-K current report to the Securities and Exchange Commission regarding a one-time charge for impairment of goodwill. Since then, the company has also been forced to confront potential damage to its most important intangible asset: its brand and name. More specifically, the association with another name…the Washington Redskins.
Now that Washington D.C.’s NFL franchise has retired the offensive name after nearly ninety years, the latest and potentially last iteration of the long-running controversy over the name of is the same as it always has been. A struggle between those who saw the team’s name and its helmet emblem as a racist caricature of Native American heritage, and others who believed the name represented football heritage that became an integral part of the history of not only Washington, DC proper, but the entire DMV region.
Back in 2014, FedEx’s Board of Directors voted down a proposal from the floor of the annual meeting requesting the company “take the steps necessary to drop or distance ties with the NFL Washington Redskins team, logos and/or stadium sponsorship until the franchise changes the team’s name.” However, nearly six years later as the reckoning of racial injustice continues to reverberate across the nation, FedEx decided to revisit their earlier decision.
On July 2nd, ESPN.com reported FedEx formally requested the team change its name. This article also reported that the company paid $205 million to the Redskins for naming rights to the stadium in 1998 in a deal that runs through 2025. Frederick Smith, the chairman, Chief Executive Officer, and president of FedEx Corp., also owns a minority stake. On July 3rd, Adweek reported that three separate letters signed by 87 investment firms and shareholders worth a combined $620 billion asked FedEx, Nike, and PepsiCo to terminate their business relationships with the Redskins. The same day, the team issued a press release announcing the beginning of “a thorough review of the team’s name.”
On this past Monday, the team took the next step in a follow-up press release. Announcing retirement of the team name and logo, majority team owner Daniel Snyder and new head coach Ron Rivera will work “closely together to determine a new name and design approach that will enhance the standing of our proud, tradition rich franchise and inspire our sponsors, fans and community for the next 100 years.” Presumably, the design approach is a reference to replacement of the prominent logo on the team helmet.
Clearly, salvaging the franchise brand is front-and-center on Mr. Snyder’s agenda. As the “thorough review process” continues, Mr. Smith, as part-owner and sponsor C.E.O. may give FedEx some added leverage in the final outcome. However, FedEx’s continued association with a high-profile partner steeped in controversy may bring potential damage to its own brand. It remains to be seen whether the marketing risk is more than the board and shareholders are willing to bear.
Corporate QnK 