Liu Xiang, Chinas biggest celebrity sports icon, withdrew from the 110-metre hurdles event at the 2008 Beijing summer Olympic Games due to an Achilles injury. Liu was Chinas first-ever Olympic gold medalist in mens track and field, his victory at the 2004 Athens Olympics had made him an instant national hero. Since then, he had become the most marketed individual in China.

Lius withdrawal from the Beijing Olympics not only caused disappointment amongst Chinese people who had high expectations of him defending his title on their home soil, but was also a blow to his sponsors, including Nike, who had invested millions of dollars in his celebrity status.

Against the backdrop of increasing nationalist sentiment in China, what were the implications of Lius withdrawal?

As a sponsorship manager at Nike what would you do in similar situations?