3 DePaul J. Sports L. & Contemp. Probs. 1 (2005-2006)

handle is hein.journals/jspocpd3 and id is 1 raw text is: MORALS CLAUSES AS CORPORATE PROTECTION
IN ATHLETE ENDORSEMENT CONTRACTS
Daniel Auerbach*
INTRODUCTION
In the rapidly expanding realm of endorsement agreements, corporations are increasingly
exposed to greater financial and other related risks. The increase in quantity and severity of such
risks is a product of various factors, namely the evolution of the athlete endorsement industry in
terms of size and customer appeal. As a result of these changes, corporations are forced to place
greater emphasis on hedging such risks through tougher negotiation and enforcement of long-
dormant contractual provisions. Several agreements, including those involving Latrell Sprewell
and Kobe Bryant, illustrate the practical roles of corporate protections once an athlete has acted
in a manner inapposite to the company's will. The changes occurring in the athlete endorsement
arena and the associated risks have led to one inevitable conclusion: tougher contractual
provisions, notably a forceful morals clause, may be the supreme safeguard for corporate
endorsees.
Endorsement contracts, as defined by California State law, are any contract or
agreement pursuant to which a person is employed or receives remuneration for any value or
utility that the person may have because of publicity, reputation, fame, or following obtained
because of athletic ability or performance.' Athlete endorsement deals typically fall into one of
two categories of licensing agreements: (1) the athlete grants the right to use his or her identify
* Mr. Auerbach is a 2005 graduate of the University of Oregon School of Law and is currently an associate with the
firm Browning, Kaleczyc, Berry & Hoven, P.C. in Helena, Montana. He would like to sincerely thank John M.
McCormack of Kolisch Hartwell, P.C. for his trusted advice and assistance in compiling this article.
' CAL. Bus. & PROF. CODE § 18895.2(d) (West 1997 & Supp. 1998).

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