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Lance Armstrong won the Tour de France seven times and an Olympic bronze medal during his career. This success brought him fame and substantial sponsorships. However, as evidence mounted that Armstrong used illicit substances to better his performance, sponsors quickly disassociated themselves by likely utilizing a morals clause in the sponsorship contract.
As in the case of Lance Armstrong, morals clauses allow a brand or business the ability to cancel a sponsorship with the athlete/celebrity should they act in a way that damages their own brand substantially enough to hurt the sponsoring business or brand's reputation. Importantly, morals clauses are not reserved for the elite sponsors. Morals clauses can also be found in TV show contracts, teachers' contracts, and appearance contracts. Oftentimes, sports businesses schedule athlete appearances to boost their brands and bring in consumers. Regardless of the size of the sports business, a morals clause should not be overlooked in the appearance contract. In today's hyper-connected society, all it takes to start a controversy is a singe Tweet, which probably takes less than a minute to create and send. No business, especially a small business, wants to be stuck with an appearance by a controversial athlete amidst a scandal for fear that the business would be associated with the athlete.
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One of the topics heavily discussed at last week's Sports Lawyers Association Annual Conference was ambush marketing. In case you are unaware, ambush marketing is a strategy where a brand associates themselves with an event or persons to capitalize on their fame without paying sponsorship fees. Take a look at this ad by Nike that was released around the 2012 Summer Olympics in London, England: Nike was not a sponsor of the 2012 Olympic Games in London, England, yet cleverly utilized the public's knowledge of the games by showing sports being played in towns also called London in the United States, Norway, Jamaica, and Nigeria. Additionally the voice-over about greatness certainly conjures the image of the Olympic athlete. This ad was used as part of a larger campaign, with the ad appearing on the homepage of Youtube for a day, as well as engaging users on Twitter with the hashtag at the end of the video. Cleverly, the ad relies upon the viewer to make the association between the images, Nike's brand, and the knowledge that the Olympics were taking place in London.
Most important is what Nike does not do in this ad. Nike never shows London, England, the Olympic rings, or even says the words Olympics or games. In other words, Nike did not use any protected intellectual property associated with the Summer Olympics in London, England. Doing so would have left Nike on the wrong end of an extremely costly infringement lawsuit. So what can businesses learn from this Nike commercial about ambush marketing?
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AuthorQuiles Law is an esports and content creator law firm headquartered in New York City, representing a global clientele. Archives
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