[MUSIC] Welcome back. Today we're going to discuss product endorsement agreements. You can see from the PowerPoint that will accompany this lesson. That this is the most important cornerstone deal that an agent or an attorney representing a professional athlete will negotiate and have drafted for his celebrity athlete client. So in the first PowerPoint you can see how important it is when we're talking about drafting a product endorsement agreement for a superstar athlete. That there be a suitability clause. Now what does that mean? That would mean that the athlete, in agreeing to wear a basketball shoe, a Nike basketball shoe, or an athlete agreeing to wear a certain sort of baseball glove, would agree that the sponsor and company's products would be used in his professional play in exchange for the company providing the firm with products that the athlete determined to be suitable for his or her use in his or her professional play. That would give an escape clause to an athlete who would not be able to play the product, who found it not to be suitable as well as other escape clauses if the products result in sub-par performance. Neither the sponsor nor the athlete will want to continue using the product, the hockey stick for the hockey player, the golf club for the golfer, the tennis racket for the tennis professional, if there was a sub-par performance associated therewith. So not only must it be suitable for use and the discretion reasonable discretion of the athlete, but there must be escape clauses, in the event. And looking at it the other way, if the athlete achieves unparalleled success, perhaps a renegotiation on the up side. Throughout the term of the product endorsement agreement, of course, the sponsor will want to protect itself against the player disparaging the product or the company which he or she has committed to use. So in another words, we can't be saying, gee, this racket might be okay for somebody else I just can't play it because it's not quite what I had hoped it would be. that, that's not consistent. That would be cons, considered a, a potential material breach of the agreement. If the athlete started to disparage the product, which he or she had otherwise agreed to use during the term of the product endorsement agreement. Perhaps the most important escape clause is the morals clause. A sponsor certainly would want to use what's called a morals clause to anticipate the right to terminate. That would perhaps match the athletes history, if any of what I call nonconforming behavior. You can see examples of that across this PowerPoint, Lance Armstrong, Tiger Woods, Ben Roethlisberger, and Michael Vick. I think you're familiar with each of those situations. Sponsors more and more anything that would damage, materially damage the reputation of the sponsor is going to be a clause that could result in a cancellation by the sponsor for anything any non conforming behavior that is going to be reputationally harmful to the sponsor. Vice versa, reverse morals clauses. For athletes that no longer want to be associated with a damaged brand, are becoming an important part of the reverse drafting of the product endorsement agreement as, as the attorney agent is representing the super star athletes. as, as you go through the product endorsement agreement, so that everyone will know exactly how much would or could have to be paid, if there is a breach, limitation of liability clauses. Essentially monetizing that which would happen in the event of a breach by either party is a best practice that you see run throughout these agreements you have to provide. Next PowerPoint bullet point is the unforeseen events called Force Majeure clauses. This will preclude the athlete, perhaps from using the product do to acts of God or interruptions, disability, injury. God forbid it be a death the player could no longer play or participate in his or her sport throughout the term of the agreement. So that's another important escape clause that's found in virtually all negotiating, negotiated and drafted product endorsement agreements. The Use Clause is important. When and where must the athlete use or wear the contracted product. This is something that's heavily negotiated as well. Depending on the leverage, the athlete, perhaps in any public appearance more to the point, any time the athlete is using, that, playing a game of golf, must use that particular club that he has endorsed. the, the tennis athlete must use the racket that he or she has agreed to endorse, while participating in professional play. Now when you get into other product endorsement agreements that would include things like clothing, well must Tiger Woods wear Nike wherever he goes? That's another close question, but the use clause generally talks about, must be used when in professional play. That product, that is the instrument with which the athlete earns his or her living. We next get into publicity rights, this is really what's being sold, so it's the right of publicity. It originates from the right of privacy, and it is what the athlete is selling. It is his persona or her persona and it is that which allows the athlete's identity to be used in connection, the name, image, likeness, any persona rights. And we're going to pursue this history of publicity rights, through and including a series of cases, which Professor Craig Nard is going to pursue with me, in a separate part of this lesson. But welcome to the, the part of this course in which we're going to pursue negotiating a drafting product endorsement agreements, publicity rights the monetization and commercialization of same. And we're going to go through some litigations that'll show you how the First Amendment is going to intersect with others who are attempting to trade off the name, image, and likeness of superstar athletes. Such as we're going to encounter in the rest of this lesson. So thanks for being with us. And that's a short primer on product endorsement agreements in representing the professional athlete. [MUSIC]
