Breaking endorsements for sports stars and sporting teams

Are there any reasons why  – is it legal to do so?

The sporting endorsements market

Both sport stars and sports teams make huge amounts of income through sponsorship deals in relation to the sporting side of their profession, such as football players being sponsored by a specific sporting company who will provide them with football boots.

However, since the onset of sporting players into the celebrity arena there has been much more scope for sports stars to enter into commercial deals which are not involved with the sporting side of their profession. These deals will be termed endorsements.

What is an endorsement?

An endorsement is a deal whereby a company will pay an individual for their brand to be associated with that individual. Often if a sporting star is a world renowned individual who is seen by many as a role model and who has value such as integrity shown by his actions on the pitch brands feel that it will be good for their business to be associated with that person. They will therefore pay that individual for them to endorse their product.

How will that individual endorse the product?

The individual will be seen to be endorsing the product by appearing in advertising campaigns both on television and in the print media for that particular product.

Is this a valuable market for companies?

Endorsement by celebrities and sporting stars is an extremely valuable market for brands as the already existing public opinion of a sports star will be something that the individual has created themselves so there is little market research required on the part of the company. Furthermore the sway that sporting stars have with the public is extremely high, often more so than other forms of celebrity which will often cause a dramatic increase in sales of the product following an endorsement.

How are endorsements created legally?

Legally endorsements will be created through an endorsement agreement between the individual sporting star and the brand which they are endorsing. The following issue will be covered in the endorsement agreement:

  • The term of the agreement
  • Payment to be made to the individual
  • What promotional work will be required
  • Issues in relation to competitors of the brand – usually the individual will not be able to wear or be seen to use any products of a competitor

The agreement will be agreed upon by the company and the individual sportsperson’s representatives. In the case of a footballer if they are represented by an agent, the agent will be used to negotiate the best terms of the deal for the player and in most cases will take a percentage of the fee.

It is for this reason that many footballers are represented by an agency rather than just one agent meaning that different agents can negotiate different deals for them relying on specific expertise.

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For more information on:

  • Can an endorsement contract be broken by the company throughout the term of the agreement?
  • What were the reasons for the contract being terminated?
  • If a contract is terminated on those grounds, will it have been done legally?
  • Can sports teams have their endorsement agreements terminated?
  • Under what circumstances could these agreements be terminated?
  • When will this occur?
  • What effect can the loss of endorsements have?