Under Armour Needs Distance|Plank Has Two Options

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Every week there is a new issue affecting the UA “House”. The interesting thing is the issues primarily stem from Kevin Plank being completely out of touch with the position of the endorsers of the brand and the stance that most people who wear or could potentially wear the clothing have about Trump’s political policies.

A bit of clarity: Plank is a part of the American Manufacturing Council. A group of CEOs selected to discuss business policy with Trump. Consider this panel an offshoot of The Apprentice. Trump surrounds himself with smart people in order to shape his business without actually paying anyone for months of work. As a point of reference when Uber began having a backlash due to their CEO being on this panel, Uber’s CEO quit.

Basically, being on the panel can’t be distinguished by potential customers from the policies being implemented politically. I discovered this while on Twitter yesterday.

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potential customers, like the athletes, don’t separate politics and business

In the above discussion, I attempted to get the person posting to separate the politics from the business. His sentiment is being echoed by everyone. Most important the sentiment is being shared by Under Armour’s most important endorsers. Steph Curry, Misty Copeland, and The Rock have all released comments about their lack of support of Trump and his policies. The business policies of Trump are tied into the politics. There isn’t any difference. Trump’s politics are his business policies.

At a time where the shares of this company have tanked, sales are not being presented honestly in regard to footwear, and UA is taking a lot of heat, Plank should not be speaking or doing the things he is doing. He is actually a detriment to the company and he is hurting shareholders.

In a situation like this usually the board can vote to get rid of the CEO. The problem here is Plank has placed himself in a position of complete control. There are three share classes of stock. Class A ($UAA) is a voting class. Plank owns the majority share there. Class B is non voting and is owned completely by Plank. Class C ($UA) is non voting as well. Plank is the face and voice of the brand, but someone in that chain of command needs to tell him to look to his endorsers and place his shareholders first. Plank has two options, repurchase a healthy share of stock to inspire confidence in the brand, or he needs to step down from the council.

Note: When discussing this issue people are saying the athletes should break the contract. This is not a possibility especially for Steph Curry. There is no moral clause on the side of the athlete with a company. The athletes/endorsers can be sued. This is not an issue for the athletes to be asked to forego money however. This is an issue with the owners. If there is any ire, it should be directed at Plank, not Steph or Misty.

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