Here is the list of the year’s biggest PR disasters that I shared during an interview with 850 KOA’s April Zesbaugh this morning:
Penn State University
Two years ago, Tiger Woods was the gold standard for PR debacles. Last year, it was the BP Gulf Coast oil spill. This year, that “honor” belongs to Penn State. In a matter of weeks, the university went from one of the nation’s most revered to one of the most reviled following its response – or more accurately its lack of a response – to a horrible child sex abuse scandal that saw two administrators indicted, a former assistant coach arrested and football coaching legend Joe Paterno fired. Making the situation even worse from a public relations perspective, the university had access to grand jury information for months and was still unprepared to deal with the fallout.
Netflix was riding high as one of the few positive business stories in 2011. Subscriber numbers were up and the stock continued to defy the bleak economy. And then Netflix got cocky. The company inexplicably surprised customers and Wall Street by announcing a huge price increase as part of a plan to separate its streaming and DVD-by-mail services. Consumers reacted by canceling their service in droves, forcing Netflix to quickly backtrack and abandon its plans. But the damage was already done. The company lost more than a million subscribers and its stock price has dropped 75 percent from its highs this past summer.
Bank of America
Banks have joined oil companies as the businesses that people love to hate, and Bank of America felt that wrath in 2011. Bank of America badly underestimated the populist outrage that existed due to the bank bailouts when it announced a plan to introduce a $5 monthly fee for its debit card users. Bank of America expected other banks to quickly join it in charging the fee, but consumer outrage spread almost virally, leaving the bank on its own as a target for what its critics said was an outrageous example of corporate greed. Bank of America quickly backtracked and announced it would not implement the monthly fee.
The reputations of News International and its parent company’s CEO Rupert Murdoch took enormous hits this year when British tabloid newspapers owned by News International were accused of bribing police and illegally wiretapping the phone lines of celebrities, politicians and crime victims in an effort to scoop the competition. Outrage in Britain and around the world peaked when reporters and editors were accused of listening to and deleting the phone messages for a young girl who had gone missing. The actions gave false hope to police and family members who thought the girl was retrieving her own messages when, in fact, she had been murdered. As a result of the allegations, Rupert Murdoch and his son James, CEO of News International, faced a parliamentary hearing in London, where Rupert steadfastly refused to accept responsibility for the scandal
Sony learned the hard way that the worst public relations crises are those that just don’t seem to end. In April, the company shut down 77 million PlayStation Network accounts after it discovered that it had been hacked. The company promised the problem would be solved within two weeks, but a series of announcements of new security breaches pushed that projection back another six weeks. Sony’s initial refusal to be forthcoming angered millions of customers and cost the company an estimated $24 billion in expenses and lost revenue.
Lowes endured a miserable November when a lax and poorly articulated advertising policy turned the nationwide home-improvement chain into a pawn between pro- and anti-Muslim advocates. The controversy started when Lowes pulled its ads from a TLC reality show called “All-American Muslim” after the Florida Family Association demanded that Lowes stop and accused the show of being “propaganda that riskily hides the Islamic agenda’s clear and present danger to American liberties and traditional values.” Lowes denied that the FFA had anything to do with its decision, but could not offer a clear explanation as to why it stopped advertising. The result was a confusing, months-long mess that turned Lowes into a political football.
Having the highest-rated television show and being the highest-paid television star in the world weren’t enough for Charlie Sheen. He needed to be “respected.” And when he felt he wasn’t getting it from the creator of Two and a Half Men, a world-class pissing match ensued. Sheen was fired and the show’s ratings plummeted. Neither look to recover any time soon. So much for #winning.
U.S. Rep. Anthony Weiner
Anthony Weiner was a rising star in the Democratic party, a passionate and fiery advocate for liberal causes who was safely entrenched in one of the most solidly Democratic Congressional districts in the country. And then he got caught behaving like a 12-year-old. It started with an accidental Tweet that included a crotch-shot, and then a series of non-denial denials followed that served only to stoke the media firestorm. When it was over, Rep. Weiner had resigned and a Republican won his seat in a special election.
Colorado Symphony Orchestra Musicians
Members of the Colorado Symphony Orchestra musicians union had a pretty nice deal going: An average salary of nearly $50,000 for a job that requires 20-hour work weeks and offers up to 26 weeks of vacation, sick days and personal time during its 43-week season. In fact, the schedule is so musician-friendly that more than 70 percent of the musicians have day jobs in the community. So you would think that when the CSO announced that cutbacks would be required because donations had dropped significantly, the musicians would chip in to try to get through the tough times. After all, its not like there are a lot of other symphony jobs open in Colorado or even nationwide. But the musicians played hardball, which resulted in 25 CSO trustees resigning. The trustees, by the way, represented about $1.5 million in annual donations, or 12 percent of the CSO’s annual budget.
Romer for Mayor Campaign
Chris Romer was the early favorite to succeed John Hickenlooper as mayor of Denver. He was a Stanford graduate with a career with banking firm JPMorgan, and he had great name recognition as the son of former Colorado Gov. Roy Romer. But Romer badly misread the mood of Denver voters when he panicked over stalled polling numbers and started attacking fellow frontrunner Michael Hancock. Several of his advisors quit over the negative attacks, and Gov. Hickenlooper was among the chorus of people who publicly criticized Romer. When the dust settled, Romer lost to Hancock 57 percent to 43 percent.