Outstanding athletic skills can equate to multi-million dollar endorsement deals and the creation of a brand. Major companies gravitate toward sport stars with unique, stellar talent and a clean-cut image that will help sell their product. Damage to the image via a human misstep, self-inflicted or not, can initiate crisis mode among sponsors. Contracts are downgraded or reneged and millions of dollars are lost. Here's a look at the financial repercussions of five sports stars' dishonorable moments, and whether they were able to rebuild their brand.

In Pictures: 6 Biggest Millionaire Flops

Tiger Woods
Pepsi Cola's (NYSE: PEP) Gatorade became the latest major company to end its sponsorship with star golfer Tiger Woods. When revelations of Woods' admitted infidelities were initially made known to the public, telecommunications giant AT&T (NYSE: T), and Accenture (NYSE: ACN), a global consulting firm, backed out of their endorsements. In addition to those that dropped out of endorsements, Gillette and Swiss watchmaker Tag Heuer downgraded his image.

Woods, who has made more than $100 million a year in endorsement deals, offered a public apology for his sexual indiscretions, took accountability, and laid out a course of action for a remedy in a televised event. Nike Inc. (NYSE: NKE) and Electronic Arts Inc (Nasdaq: ERTS), which have made hundreds of millions of dollars around the golfer, supported him, claiming Woods' historic athleticism as the focus of their long-standing partnership. (Read more about Tiger's financial mishaps in The Tiger Woods Effect - $12 Billion Wiped.)

Serena Williams
Tennis star Serena Williams' cursing tirade last summer barely rattled her sponsors though her wallet still took a hit. William's unsportsmanlike verbal lashing occurred at the U.S. Open during the singles semifinal against Kim Clijsters. When a line judge called Williams out for a foot fault on a second serve, an angered William's unleashed a verbal attack while wielding her tennis racket. In Williams' statement, she indicated her behavior was inappropriate stating she was a "very prideful," " intense" and "emotional" individual.

Major sponsor Nike stood behind Williams. In 2004, Williams inked a $40 million five-year endorsement deal with the sportswear maker and has been among the highest paid female athletes in the world. Kraft Foods and most recent sponsor, Tampax, also continued their endorsements. In spite of their support, Williams was still required to pay a maximum fine of $10,000 for her threatening language and gestures and another $500 for racket abuse. (Learn more about what happens when fame goes wrong. Read Stars Behaving Badly: Disastrous Celebrity Hirings.)

Michael Phelps
Olympic swimmer Michael Phelps racked up numerous endorsements following his record winning of eight gold medals in the 2008 Beijing Olympics. However, these endorsements were endangered by a misstep caught on camera. A photo showing Phelps inhaling from a marijuana pipe was published by a British tabloid and soon circulated on the internet. Phelps admitted his actions were "regrettable" and demonstrated "bad judgment." Speedo, a sportswear company, and Omega watches considered it a non-issue, while Subway condoned the behavior. The U.S. Anti-Doping Agency, which has athletes prove they compete drug-free, had second thoughts and will evaluate its future relationships with Phelps.

Michael Vick
The majority of former Atlanta Falcons star quarterback Michael Vick's sponsors fled when he was convicted for participating in a dog-fighting operation in 2007. The reported atrocities committed against underperforming dogs sent the once highest paid football player to prison for 18 months. Nike first suspended then terminated its contract with the football star after he pleaded guilty. Upper Deck removed autographed memorabilia and Reebok stopped sales of Vick's #7 Jersey. Vick was extended offers to play for the Cincinnati Bengals and the Philadelphia Eagles upon leaving prison. However, it was the Eagles that awarded him the second chance and a $1.6 million one-year deal with a team option for the second year at $5.2 million. Sponsors of the team voiced concern, indicating that they would have preferred advance notice in order to inform their customers.

Kobe Bryant
L.A. Lakers star Kobe Bryant's sexual assault charges in 2003 scared off sponsors. The charges were dismissed and the woman agreed to an out-of-court settlement in a civil suit. McDonald's (NYSE: MCD), Sprite and Nutella all terminated or did not renew contracts with the NBA basketball player; Bryant lost $6 million in deals. Nike, which had made an endorsement deal with Bryant worth $40 million, scaled down his image but resurrected it three years later in a Nike commercial.

Bottom Line
A celebrity sports stars' brand can be damaged when their image is scarred by human error. Some sports stars begin hemmorhaging endorsement deals while others have their sponsors' full support. Either way, as long as sports stars apologize and take responsibility for their mistakes, their star power and cash flow can be resurrected. (These stars were able to save their endorsements, but it's not always so easy. Read about it in 7 Costly Pro Athlete Screw-Ups.)

Related Articles
  1. Economics

    What is a Complement?

    A good or service that’s used in conjunction with another good or service is a complement.
  2. Investing News

    Super Savings for Your Super Bowl Party? Bet on It

    Prices for wings, avocados and TVs are all coming down, which will make your Super Bowl 50 festivities less costly.
  3. Investing News

    Chipotle Served with Criminal Probe

    Chipotle's beat muted expectations and got a clear bill from the CDC, but it now appears that an investigation into its E.coli breakout has expanded.
  4. Investing News

    Are Super Bowl Ads Worth Their High Cost?

    Are Super Bowl ads worth the investment? A look at the cost and how they're received.
  5. Stock Analysis

    From Shampoo to Soup, Unilever Has it Covered (UL)

    Open your fridge, your pantry, your bathroom cabinet and you'll find the Unilever logo. Here's how the company got so enormous.
  6. Stock Analysis

    JNJ vs. PG: Which is the Better Bet Right Now?

    These two stocks are long-term powerhouses, but one has the edge over the other right now.
  7. Stock Analysis

    The Top 5 Small Cap Restaurant Stocks for 2016 (BLMN,DENN)

    Learn about the market conditions that could help continue pushing restaurant stocks higher in 2016 and the five small-cap restaurants that are worth a look.
  8. Investing Basics

    This is What Donald Trump's Portfolio Looks Like

    Find out what Donald Trump's portfolio looks like and gain some interesting insights into the way the billionaire's investment mind works.
  9. Economics

    Why Commodities Aren't to Blame for Market Malaise

    Commodities are taking the brunt of the blame for poor investment performance. Are they the real villain?
  10. Economics

    Has IKEA Reached 'Peak Curtains?'

    An IKEA executive made a comment that would have rankled investors (were IKEA not privately held). Here's what he (probably) really meant.
  1. Marginal propensity to Consume (MPC) Vs. Save (MPS)

    Historically, because people in the United States have shown a higher propensity to consume, this is likely the more important ... Read Full Answer >>
  2. Is Japan an emerging market economy?

    Japan is not an emerging market economy. Emerging market economies are characterized by low per capita incomes, poor infrastructure ... Read Full Answer >>
  3. Are Social Security payments included in the US GDP calculation?

    Social Security payments are not included in the U.S. definition of the gross domestic product (GDP). Transfer Payments For ... Read Full Answer >>
  4. What economic indicators are important to consider when investing in the retail sector?

    The unemployment rate and Consumer Confidence Index (CCI) rank as two of the most important economic indicators to consider ... Read Full Answer >>
  5. How do changes in interest rates affect the spending habits in the economy?

    Changes in interest rates can have different effects on consumer spending habits depending on a number of factors, including ... Read Full Answer >>
  6. What is the difference between an OEM (original equipment manufacturer) and a VAR ...

    An original equipment manufacturer (OEM) is a company that manufactures a basic product or a component product, such as a ... Read Full Answer >>
Hot Definitions
  1. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  2. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  3. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  4. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  5. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  6. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
Trading Center