March 2nd, 2011
07:39 AM GMT
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(CNN) – It’s been a tough week for the celebrity business.

The bizarre behavior of Charlie Sheen, the highest paid star on U.S. television, has – for now – pulled the plug on the popular “Two and a Half Men” television series.

A profanity-laced video put online Tuesday showing a drunken John Galliano – the famed chief fashion designer for Dior – expressing his love of Hitler was the final straw for the company, which plans to terminate his contract following his arrest for allegedly making racist remarks.

Businesses tie their fortunes to star employees, star executives, star entertainers, because it works: Despite (or, perhaps, because of) Sheen’s checkered past, the troubled star has powered the CBS television show for eight years, earning him a reported $2 million an episode as the ne’erdowell foil to his live-in brother and nephew.

Galliano joined Dior in 1996 and turned its moribund fashion into an industry driver; Dior is a division of LVMH, which made more than $4.3 billion euros last year – half from its fashion division, its most profitable business.

CBS didn’t waste time in pulling the plug on the rest of the season after Sheen’s scathing comments on a U.S. radio show, including an attack on the show’s creator. Dior’s reaction was equally swift (it didn’t help that the Galliano incidents exploded in between two of Dior’s largest events of the year – Sunday’s Oscars show and Dior’s ready-to-wear show at Paris Fashion Week).

“I think the more that [the video] spread across the internet … they weren’t really left with any choice,” said James Fallon, editor of Women’s Wear Daily, of Dior’s decision to pull Galliano’s plug.

“[Dior] acted swiftly and decisively, and that’s what you need to do in a situation where you’re facing pressure in this case, and there is something that was so horrific and disgusting, the roadmap for the company was clear,” said Jeremy Robinson-Leon, COO of Group Gordon, a crisis management firm.

“Ultimately Dior’s biggest problem right now is that the brand is inextricably linked with Galliano,” Robinson-Leon said. “Galliano is Dior, and Dior is Galliano … Dior’s going to need to move beyond this by finding a replacement for Galliano rather quickly."

Sheen’s media drive, including a live one-hour interview with CNN’s Piers Morgan, has been described as his “Scorched Earth Media Tour.” The show – which is to say, the product – was created around Sheen. It’s difficult to imagine the product surviving without him.

We live in an era where consumer brands in mature markets and industries are less able to differentiate themselves on product, and focus more on brand experience – of which, association with celebrity is increasingly important. Yet these debacles cost companies real money.

Look at Tiger Woods and the financial fallout to his sponsors following his well-publicized marital troubles in 2009. A study by the University of California, Davis, shows that the loss of shareholder value to eight of Wood’s sponsors in the wake of scandal was $12 billion.

Years of work building a celebrity’s brand can be eviscerated in one drunken outburst caught on a mobile phone camera. But celebrity careers are known for redemption and resurrection – Sheen’s career already has had more lives than your average feline. But can Sheen and Galliano bounce back from this week’s events? Should companies still be beholden to celebrity branding?

soundoff (25 Responses)
  1. John

    Bernard Arnault and Dior should be congratulated for moving swiftly and dismissing Galliano for his anti-semitic remarks.
    Instead of being an example as a personality and a "creator" he behaves like a thug and his production should be boycotted

    March 2, 2011 at 8:00 am |
  2. Chris

    The funny thing about this Galliano-loving-Hitler outbreak is that Galliano, with his excentric looks and lifestyle, would probably have been a prime target for Hitler's wolves.

    March 2, 2011 at 8:09 am |
  3. NadePaulKuciGravMcKi

    What did Michael Jackson try to say?
    Charlie Sheen questions Obama about 9/11
    despite AIPAC controlled media censorship.
    Mel Gibson does not play dumb about 9/11 either.

    March 2, 2011 at 8:15 am |
  4. Mark

    well, your analogy doesn´t quite work, does it? Warner Bros doesn´t have one star, neither does Christian Dior

    March 2, 2011 at 8:43 am |
  5. piscesdragon

    The genius is in the brand and not in the person; but when all hopes are pinned on a singular feature, it's hard to separate the vice from the brand. Ejection is then the key. Pity that Galliano talks rot and that Sheen spews more vitriolic but they should be ejected just for their vanity and self-centredness.

    March 2, 2011 at 9:01 am |
  6. Brian

    So is the media going to assault Sheen like they did Mel Gibson for his mild comment on the professional victims.

    March 2, 2011 at 10:53 am |
  7. John

    I agree.

    March 2, 2011 at 10:59 am |
  8. James Huntly

    Unfortunately I think we're going to see more cases like this, as the line blurs between personal brand and brand endorsement. Opinions and personalities are being spread across Twitter and Facebook in real time, and are increasingly difficult to control and manage. Brands are going to have to work a great deal harder and be cleverer at protecting themselves from things like this if they're going to trust one person to carry and represent their brand image.

    March 2, 2011 at 11:27 am |
  9. Mynah

    The Galliano case is really interesting. The way that the fashion industry is sitting around hugging poor Galliano for his "terrible public mistake" (three of them that are known about thus far). Probably some of these people were the same ones that were very clear in their condemnation of Mel Gibson when he lost it very publicly. I guess it's different if you make pretty dresses. Good for Natalie Portman standing up against anti-semitism – but she is a bit of a hypocrite – she was quite fine with making out at the wailing wall in 2005 and offending the religious Jews. And quickly forgiven. The lesson I am getting here is that it's easier to forgive a beautiful person, or one who dresses the beautiful than it is to forgive the less appealing Mel Gibson.

    March 2, 2011 at 12:52 pm |
  10. Sheridan

    Actually no one cares about the anti-semitic remarks at all, as nowadays everything is called as anti-semitic when you have a different opinion. It's clearly a defaming campaign against Sheen and Dior, because they had an opinion. When someone is also making anti-christian remarks, somehow the media stays silent and that event is never existed. Strange, isn't it? So why anyone should care with these remarks? They had an opinion; prejudice or by experience, no one knows and no one cares. Don't use double standards or don't be surprised, when people say things like Sheen and Dior.

    March 2, 2011 at 1:13 pm |
  11. Salt-n-Pepper

    When a Christian speak against Muhammad PBUH and announces to burn the Holy Quran, the State says it can't put any pressure because of freedom of expression. But when Galliano, albeit being drunk, says he loves Hitler he is fired and arrested and the whole world is against him.

    Aren't we sort of hostage to Jews?

    March 2, 2011 at 1:15 pm |
  12. Susan Edmunds

    It is offensive that the media makes excuses for these people, saying that they are bipolar. Most people with bipolar disorder are not monsters. Many are kind, loving people with a disorder that is being demonized in the media. The difference, which the media does not touch on, is narcissim and anti social personality disorders which are characterized by remorselessness and a lack of a moral compass and compassion

    March 2, 2011 at 1:19 pm |
  13. cw

    Yes very strange from this "guy" ? Galliano
    The nazist would killed anyone and anything like him in an instant,so is he totally crazy or what ?

    March 2, 2011 at 3:35 pm |
  14. BEE

    Human nature dictates that these stars, pampered by fawning companies, will be brought down by arrogance and the perception that they are invincible

    March 2, 2011 at 3:40 pm |
  15. imeanwhat

    I get it, he's terrible for making anti Semitic remarks, but what the hell is going on with his hat? Very more @imeanwhat

    March 2, 2011 at 4:25 pm |
  16. tim

    Jesus Christ, stop moralizing. Considering that Galliano is gay, I doubt he was actually serious about his remarks. It has nothing to do with whether these comments were wrong, it is just a matter of PR.

    March 2, 2011 at 4:39 pm |
  17. giles clarke

    this is a lame article...stick to a business you understand

    March 2, 2011 at 4:58 pm |
  18. whatta hubba

    Thank God we have seen the last of Sheen.

    March 2, 2011 at 4:59 pm |
  19. David E.

    If the theory of Hitler being a Jew is true, then, what's the big deal anyway?

    March 2, 2011 at 5:23 pm |
  20. TallGrrl

    This is the key phrase in this piece, and it says a lot about why people are paid the money they are:

    "The show – which is to say, THE PRODUCT– was created around Sheen. It’s difficult to imagine THE PRODUCT surviving without him."

    TV shows like CSI, L&O, Friends, 2 and 1/2 Men, The Tonight Show...are Product.
    Multi-BILLION dollar Product.
    Stars of these shows are paid what would be considered as pocket change to the people who run the Networks.
    Charlie Sheen, Galliano, Tiger Woods, and others, either can make or lose millions of dollars to Corporation Shareholders.
    What people don't realise is that Sheen's antics also have caused pain to people who support his show: camera operators, craftspeople, stand-ins, stage crewmembers.
    These people don't make a fraction of the money Sheen makes, and when he causes production to be shut down because of some b.s. nonsense, he hurts them.
    That's the shame: Not that he hurts himself...he hurts people (and their families) who depend on him.

    March 2, 2011 at 8:16 pm |
  21. Lilly

    I've been trying to find an exact transcript of what Galliano said. I saw part of a clip where he said he 'loved Hitler' but it was impossible to tell the context. To me it seemed he was saying it just for the shock value. What I have not seen is any evidence that he was known to have anti-semitic feelings that have been expressed before. Also what has not been shown is that he was using anti-semitic remarks to spread hatred against Jews. One thing that is forgotten whenever someone uses a derogatory remark is that they may be saying it as a pure insult to bug one or more people. When we fight verbally we often will purposely pick an insult to hurt someone on a personal level – such as calling someone fat, bald, short, ugly or stupid. To say that someone is anti-semitic based upon one insult is ridiculous and as one person pointed out, if you insult a Christian then it seems to be just fine – for the record I'm an aetheist.

    March 2, 2011 at 8:48 pm |
  22. Luis

    I've seen Galliano's video, and the women talking to him while recording the scene didn't seem to be offended at all. In fact, they were joking and laughing. I don't like Galliano's comments, but it seems to me that they were just silly jokes made by a drunk man, trying to be funny in a private setting. He didn't mention jews, but "ugly people" instead.
    Today, being slightly anti-semitic end your career in a heart bit. But I really think the man has a case if he wants to counter sue Dior and the women who accused him.

    March 3, 2011 at 12:57 am |
  23. nanostring

    I've never watched Sheen's show, nor have much respect for him. But he obviously "sells" very well: in 24hrs he gets 1M followers on twitter + his show in rerun wins the night's ratings. If Les Moonves cares about CBS shareholders and not just about his ego, he should swallow hard and resume production. Unfortunately, given his track record I doubt that will be the case. Moonves' fight with Howard Stern was a pure ego-trip an an absolute fiasco for CBS, as far as I can see. What did CBS shareholders get from it?

    March 3, 2011 at 4:27 am |
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