Hockey Canada recently approached some of its largest sponsors to gauge whether ousting some top executives and board members would be enough to win back their support – and sponsorship dollars – amid an ongoing sexual-assault scandal.
The organization has been under fire over its handling of sexual-assault allegations against players. This has led major sponsors – among them Bank of Nova Scotia, Canadian Tire, Tim Hortons, Telus and Esso – to announce in June that they would suspend support for Hockey Canada, including at this year’s World Junior Championship.
As that tournament proceeded in Edmonton this month with many high-profile brands visibly absent, representatives of Hockey Canada contacted certain sponsors to inquire about measures the organization could take in order to restore their support, according to multiple sources with knowledge of the conversations. Some of those talks, which occurred within the past week, floated the idea of high-level departures, including some but not all of Hockey Canada’s board members, as well as executives such as chief executive officer Scott Smith.
So far, the sponsors who were contacted have not changed their positions, according to the sources, whom The Globe is not naming because they were not authorized to discuss sensitive conversations with business partners. Some said the departures on offer would not be sufficient, and that wholesale change to Hockey Canada’s operations is needed.
“Hockey Canada is grateful for the ongoing support and feedback from our sponsors,” Hockey Canada spokesperson Esther Madziya wrote in a statement on Monday, adding that the organization knows sponsors and the wider public want to see the organization make meaningful progress before the next world juniors. “We are working diligently to do exactly that and will be reporting publicly on our progress over the months to come.”
Hockey Canada did not respond to questions from The Globe about its recent conversations with sponsors, including questions about whether companies are withholding payments related to their sponsorships. In a follow-up statement Monday evening, Hockey Canada’s interim board chair, Andrea Skinner, wrote that the board supports the CEO and other executives.
Under normal circumstances, companies submit payments at regular intervals to organizations they sponsor, although the timing can vary depending on the contract. According to sources, some sponsors have decided to withhold those payments to Hockey Canada until it makes substantial changes. Even in that case, sponsors would likely demand make-good negotiations for the lost value of those sponsorship dollars during the current scandal.
“We need Hockey Canada to regain the faith and trust of Canadians before we can restore our support for Hockey Canada. We continue to fund women’s hockey and kids’ hockey programs,” Tim Hortons spokesperson Michael Oliveira wrote in a statement on Monday. But he declined to answer questions about any recent conversations with the organization.
Hockey Canada continues to face backlash for paying to settle a lawsuit involving allegations from 2018. The plaintiff in that case claims she was sexually assaulted by eight Canadian Hockey League players, including members of that year’s Canadian world junior team. The settlement, first revealed in late May, has led to an audit by the federal government to determine whether Hockey Canada made the payment using public funds.
In June, Bank of Nova Scotia announced it was pulling its support for the world juniors, and that it would not resume sponsorship activities until the company was “confident the right steps are being taken to improve the culture within the sport – both on and off the ice.”
Following Scotiabank’s announcement, a number of other high-profile sponsors also announced that they would suspend support, including Restaurant Brands International Inc., whose Tim Hortons brand has used various hockey sponsorships extensively in its advertising over the years. The company has been a Hockey Canada sponsor since 2018.
The recent conversations with sponsors occurred after Mr. Smith, the Hockey Canada CEO, told a parliamentary committee last month that he had no plans to resign, despite growing calls for a leadership overhaul at the organization. The former chair of Hockey Canada’s board of directors, Michael Brind’Amour, resigned earlier this month.
In July, a Globe and Mail investigation revealed that Hockey Canada kept a special fund, fed by player registration fees from across the country. The money was used to pay settlements in cases of alleged sexual assault, with minimal outside scrutiny. Hockey Canada did not disclose details of the fund in its annual report, or in its handbook for parents and players, which outlined how registration fees were spent.
“The initial allegations and response, as well as new information that continues to come to light, are extremely disturbing and raise questions about our partnership moving forward,” Bauer Hockey’s vice-president of global marketing, Mary-Kay Messier, wrote in a statement on Monday. The company, an international sponsor of Hockey Canada, was among those that pulled support for the world juniors. She added that Bauer may have more to add after a meeting with the organization and its interim board chair, Ms. Skinner, next week.
“We have been and will continue to have conversations with Hockey Canada and other partners about the future. ... Our focus is holding Hockey Canada accountable and beginning the collective effort to move the game forward for the good of the kids and their families,” Ms. Messier said.
Sponsors pay money to associate their brands with the “halo effect” of a team or organization, but the value of such investments can diminish when those associations turn negative. Sponsorships typically give companies the right to use an organization’s name and logo in their own advertising, such as by calling themselves the “official bank” of a sports team. And sponsors’ brands are also highly visible at major events – for instance, on rink boards. A sponsorship could also include naming rights to certain events, like tournaments.
Sponsors’ ads were notably missing from rink boards at the world junior tournament, which concluded this past weekend. Hockey Canada confirmed that the ongoing controversy was affecting audience attendance at the event.
The Globe contacted Hockey Canada sponsors Scotiabank, Canadian Tire, Telus, Esso owner Imperial Oil, Nike and Recipe Unlimited on Monday. The companies either declined to comment or did not respond to questions about the recent conversations and about their sponsorship plans.
The conversations about sponsorship support are urgent for Hockey Canada, which is holding another World Junior Championship just four months from now, in Halifax and Moncton.
The women’s world hockey championship will kick off in Denmark this Thursday, and Hockey Canada said in its statement that many of its sponsors will be visible there. Bauer confirmed that it will have a presence in the tournament, including as the presenting sponsor for the NHL Network. It will also run an advertising campaign and have on-site content for fans at the tournament.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.