Wednesday, August 10, 2022

‘They didn’t game it out:’ CCM Hockey’s debacle over its Russian players shows there’s no hiding from politics

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CCM’s decision to drop all Russian players has raised questions about its business ethics and strategy

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Patrick Cartlidge has been a fan of Montreal-based company Canada Cycle & Motor Co. Ltd., known these days as CCM Hockey, for three decades. When he is not working as a high school English teacher, he collects and customizes vintage CCM jerseys.

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One rare gem in his collection is a 1996 LA Kings 3rd “Burger King” jersey, in purple, grey and white, with a fierce, purple-bearded Kings logo over the heart. Another is a pro version of the 1995 NY Islanders jersey with the blue, orange, and white logo on both shoulders.

Missing from his collection is anything bearing the name of one of CCM’s biggest stars: Alexander Ovechkin. Cartilage had no issue with the company’s decision this week to drop the Washington Capitals captain and other Russian hockey players from its global advertising campaigns in reaction to President Vladimir Putin’s invasion of Ukraine.

“Ovechkin has aligned himself politically with Putin and the Russian state, so it is fair in his case,” Cartlidge said. “As for the other players, it’s tough to say.”

TSN was the first to report that CCM was putting distance between itself and its Russian athletes, citing chief executive Marrouane Nabhih. The company confirmed the report, but declined to name the other Russian players on its promotional roster besides Ovechkin.

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“CCM hockey feel(s) very sad for the Ukraine population & hope(s]) for a peaceful resolution as quickly as possible,” the company, owned by Toronto-based Birch Hill Equity Partners, said in a statement. “In the meantime, we are suspending the utilization of any Russian player[s] from our Global Marketing [and] advertising.”

Among the players of Russian descent with ties to CCM are Pittsburgh Penguins forward Evgeni Malkin of the Pittsburgh Penguins, a former MVP and three-time winner of the Stanley Cup; Dmitry Orlov, who has played internationally for Russia and is a teammate of Ovechkin’s on the Capitals; and Artemi Panarin of the New York Rangers, among the NHL’s top scorers and highest paid players.

CCM’s move was part of a broad backlash by the hockey establishment against Russia — and Russians — over Vladimir Putin’s decision to invade Ukraine last week. The NHL, Hockey Canada, USA Hockey, and the International Ice Hockey Foundation (IIHF) have all taken steps to condemn Russia’s invasion of Ukraine. The IIHF, for example, has suspended the Belarussian and Russian national teams and clubs teams until further notice.

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While understandable on the surface, CCM’s decision to drop all Russian players, not just Ovechkin, has raised questions about its business ethics and strategy. One issue was discrimination. CCM didn’t have to go as far as it did. Its main rival, Bauer Hockey LLC, whose roster includes Russian star Kirill Kaprizov of the Minnesota Wild, condemned the invasion, but stuck by its players.

“We support the decisions made by the NHL, IIHF, Hockey Canada and USA Hockey regarding international team competitions,” a Bauer spokesperson said. “With respect to athletes at any level – including NHL players – we believe that no individual should be indiscriminately judged by their nationality, race or sexual orientation.”

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Alison Kemper, an expert in business ethics at the Ted Rogers School of Management at Ryerson University, said any any response the indiscriminately targets all Russian players is cause for concern.

“I don’t know how you can tell the difference between a Putin supporter and a non-Putin supporter,” said Kemper, adding that Russian athletes are unlikely to openly express distaste for the regime because it would put themselves and their families in danger.

At the same time, companies such as CCM are learning the hard way that there is no escaping politics now, not even at the ice rink. Companies, which are generally risk-averse, need to try and “game out” geopolitical crises like the Ukraine war in advance, trying to predict them beforehand, said Kemper.

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“Probably most marketing departments are not that geopolitically savvy or sophisticated,” she said. When the social tides turn, “you’re paying a lot of money to have your reputation harmed,” she said.

Russian President Vladimir Putin holds a certificate along with Russian national ice hockey team member Alexander Ovechkin, at the Novo-Ogarevo residence outside Moscow on May 29, 2012.
Russian President Vladimir Putin holds a certificate along with Russian national ice hockey team member Alexander Ovechkin, at the Novo-Ogarevo residence outside Moscow on May 29, 2012. Photo by SERGEI KARPUKHIN/RIA NOVOSTI/AFP via Getty Images files

CCM may have missed key warning signs with Ovechkin, who has always been close to Putin; in a 2011 interview, he mentioned that he had the president’s personal phone number. Putin gave Ovechkin a call to congratulate him regarding he and his wife’s nuptials and even sent them a wedding gift. In November 2017, just weeks after he signed the endorsement deal with CCM, Ovechkin published an Instagram post kicking off a social movement called “PutinTeam,” calling it a “privilege” to be associated with the initiative.

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At a press conference on Feb. 25, Ovechkin’s demeanor was far less cheerful. He appeared weary as reporters questioned him on his views on Putin and the war.

“I’m Russian, right? It’s something I can’t control. It’s not in my hands,” he said. “[Like] I said, I hope [the war is] going to end soon, and there’s going to be peace in both countries.”

When asked if he still supported Putin, he said, “Well, he’s my president. But [like] I said, I’m not in politics, I’m an athlete… it’s a hard situation now, for both sides.”

CCM fan Cartlidge said it wasn’t enough. “I appreciate the difficulty of his position, but feel he needs to make a stronger statement; he is the face of Russian hockey,” he said.

Cartlidge takes pains to avoid companies that support unethical practices—and he’s not alone. He is reflective of the broader trend of conscious consumerism among Canadians. These days, consumers not only like to see their favourite brands getting involved in social issues, they expect it.

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Consulting firm PwC noted in its 2021 Consumer Insights Report that consumers, governments and shareholders now consider environmental, social, and governance initiatives as a “must-have, rather than a nice-to-have.”

CCM’s decision is part of a broader global trend of social responsibility, as companies step forward to take a stance on issues like Black Lives Matter, and most recently, the Russian-Ukrainian war. It may be inauthentic, but Kemper said it doesn’t matter.

“The modern notion of a corporation is not about authenticity,” Kemper said. Corporations aren’t thinking, feeling entities but a “nexus of contracts,” she said

And when you peel back the curtain, CCM debacle is not about social responsibility at all, but about strategy. The company made a crucial miscalculation when they signed the endorsement deals with Ovechkin and the other Russian players, said Kemper.

“They didn’t game it out.”

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