Just as with ownership of any significant asset, being the owner of a sports team comes with complex legal concerns....
A divorce impacts so many areas of your life, from parenting time to alimony payments. But what about your sponsorship contracts? Yes, you could actually lose a supporter over separation proceedings if they are not handled with care, although not automatically.
The Riley Divorce & Family Law Firm could guide you to help you understand the impact of divorce on sponsorship deals and endorsements. Whether there is a morality clause or other factor, a divorce could definitely affect your deals. Here is what to know.
Many high-profile endorsement agreements include a morality clause. If your contract prohibits certain behaviors, like a messy public divorce, the company could terminate your deal. The role of this clause is to protect the brand’s reputation, and a scandal may negatively impact its image, particularly if other allegations are involved.
The endorser may choose to simply cut ties with you to avoid a controversy. However, some morality clauses are narrowly defined, while some are very broad. In that case, you may have some legal recourse to protect your endorsements.
The impact of divorce on sponsorship and endorsement deals depends on several factors, such as the nature of the proceedings. A quiet, amicable separation is less likely to lead to the termination of your agreement. As well, your persona may also come into play. If you are well known for your rebellious spirit, a contentious divorce may not be affected by scandal. Whereas someone who portrays themselves as a dedicated family person would likely trigger the brand’s morality clause.
However, many sponsors have a robust risk management plan, with a higher tolerance for controversy than others. It is possible the company would take other, less dramatic actions, such as financial sanctions or contract revisions, before simply terminating your deal. For example, golfer Tiger Woods lost sponsorships with AT&T, Gillette, and Gatorade, while Nike chose to maintain their contract with him.
Now that you have a better understanding of the impact of divorce on sponsorship deals and endorsements, it is time to reach out to one of our Ontario-based offices. We could review your contracts to determine how the dissolution of your marriage could affect your agreements.
At The Riley Divorce & Family Law Firm, our team of experienced and compassionate legal professionals is available 24 hours a day to better serve you. Your high-net-worth divorce comes with unique challenges, and as a CDS Law Firm, we are well-equipped to successfully manage your divorce.
The Riley Divorce & Family Law Firm
