In these times of multiple threats of league lockouts and increasing salary caps, many athletes are finding themselves searching for alternative revenue streams. Even pros whose sports continue to keep them working are steadily looking to supplement income, primarily through business deals based exclusively on name recognition. As a result, brand protection is of increasing and paramount importance. Once an athlete steps into the business sector, that athlete must remain cognizant of the public’s perception of his or her image. Thinking of oneself as a brand has been a widely covered topic of late. While many understand the need for brand protection theoretically from a PR perspective, many fail to see it practically from a legal perspective.
The general public, including prospective employers, get to know athletes by the personality traits captured on tape, manifested through commonly observed technical and social skill sets displayed on and off the court (or field as the case may be) – which goes to the heart of branding. While brand development typically starts in high school and travels with the athlete all the way through to post-professional play, it is the public’s perception that dictates the pervasiveness of athlete brand recognition. Ultimately, surviving in the business sector necessitates that when an athlete leaves competitive sports for the business world, the athlete must carry a strong brand along with a (different kind of) team eager to protect it.
High school-aged athletes are typically still learning their craft when audiences begin watching them and making decisions about the athlete’s likeability. During this time, most athletes do not have handlers, media trainers, lawyers and other consultants whose jobs are to create and cultivate what will one day become the athlete’s brand.
Athletes who go on to compete in college under NCAA guidelines assign to the association all rights to the commercial use of their names, pictures or likeness, while in college, and arguably in perpetuity. (See, Holmes, J. & Corley, K., “Defining Liability for Likeness of Athlete Avatars in Video Games,” Los Angeles Lawyer Magazine (May 2011).)
A slightly less extensive grant of rights is assigned by pro athletes who seek to compete in leagues, tournaments, circuits and tours. The major distinction here is that the pro maintains some rights to also license likeness, although such a contract cannot conflict with the primary agreement. As such, it is in this time frame, when an athlete turns pro, that the athlete is permitted to earn money from the commercial use of likeness.
These days athletes are lending their likenesses to the promotion of consumer goods and services such as clothing, shoes, and insurance; social events, including parties and charity tournaments; and even reality TV shows. What many do not understand is that the value of the athlete’s likeness to the company employing that athlete is usually multiplied by the athlete’s failure to negotiate greater protections for the use of the athlete’s brand, in conjunction with that of the employer’s.
Following the 2011 NBA Finals, there were rumblings that a multinational company might replace one athlete’s endorsement contract with another player. (This article will not speculate on the legality of such a move.) Evident from this notion of a seemingly unilateral decision by one contracting party to completely nullify an agreement is that the athlete might not have taken control of certain key terms when the agreement was initially negotiated. While it is typically the case that one party to an agreement will have slightly better bargaining power than another, he who holds the weaker position must fight for as much control in the negotiations as possible.
The Key Elements
Being asked to sponsor and/or endorse a consumer good or service is quite an accomplishment; it’s also a testament to the brand you and your team have created. However, don’t get caught up in the glitz and glam! Protect your brand by focusing on five key elements over which negotiation is both warranted and expected: scope, duration, territory, enforcement and price.