Sports Marketing/Trademarks

A celebrity should maximize the value of their brand by strategically monetizing every aspect of it.  For example, one who becomes famous through the recording industry would consider a career in front of and behind a television camera, through endorsement opportunities that are equity-based, along with employment and other business ventures. This is precisely the path taken by recording artists such as Will Smith and Queen Latifah.  Others, such as Michael Strahan, have taken a different path.  Strahan, a former pro football player, intelligently leveraged the NFL’s platform to build a successful on-camera television career, a television production company and numerous endorsement opportunities. This blog covers key considerations for a celebrity that seeks to avail herself or himself of ancillary revenue streams and how to go about protecting and preserving that brand.

BUILDING A BRAND – DNA MATCHING

For any celebrity, monetizing a successful brand requires that you develop, enhance and market your organic DNA and match it with brands with a substantially similar DNA. In many respects, you are who you are. A product is what it is. For the DNAs to work together, they have to match.

If you are uncharacteristically big, strong and powerful like LeBron James, Ezekiel Elliot or Kristaps Porzingis, you should be purposeful in pursuing opportunities that are consistent with those personal characteristics. Examples of those opportunities may be a Porsche, BMW or Dodge’s RAM Truck. Those brands symbolize strength and power and, therefore, share the same DNA as the aforementioned celebrities.

If you are strikingly beautiful and graceful like Beyoncé, Jennifer Lopez or Skylar Diggins, you should pursue opportunities that match that DNA.  Examples of matching DNA may be found in clothing lines, makeup and fragrances.

The first steps for a celebrity that desires to monetize their brand is to assess their organic DNA, be purposeful about enhancing that DNA and marketing it to companies that sell products or services that share the same DNA.

WHAT ARE YOU ENDORSING?

Once the celebrity matches their DNA with that of a company, the objective is to maximize the brand. Because celebrities will be paid more for endorsing multiple products instead of just one, they should consider narrowing the scope of an endorsement obligation. For example, if an athlete intends to endorse only “sneakers,” the endorsement agreement should not say the athlete is endorsing “footwear.” An athlete who has unknowingly signed an endorsement agreement for footwear could find himself or herself obligated to endorse everything one wears on their feet: sneakers, shoes, boots, flip flops, etc. Unintentionally including these additional categories foreclose the athlete’s opportunity to be paid an endorsement fee for endorsing, by way of example, shoes in addition to sneakers.

The same applies to actors and musicians.  An actress that expects to endorse “makeup” should not allow the endorsement agreement to be so broad that it includes all products considered to be in the “glamour category”.  The “glamour category” arguably includes hair products and is beyond what is intended by the term “makeup”.  While this might not be problematic for the athlete, additional compensation is warranted for the additional products. Simply put, there is an opportunity cost associated with every micro-product or service that a celebrity endorses and celebrities should seek to be compensated for each area.

A company may tell a celebrity that although the product category in an endorsement agreement precludes them from endorsing a broad range of products, their practice has been to grant a waiver to allow the celebrity to endorse pretty much whatever they want. In the end however, the agreement says what it means and means what it says. Don’t expect the endorsement agreement to be enforced any differently than what is written.

REVERSE MORALS CLAUSES

Companies that ask celebrities to serve as pitchperson typically require morals clauses in contracts, which give them the right to terminate an agreement in the event an athlete engages in conduct that contrasts with community standards of honesty or good morals (for example, convictions for DUI or use of banned substances).  It is understandable that a company would not want to continue its affiliation with a celebrity whose poor conduct has diminished the value of their brand. Similarly, celebrities must protect their brands against wrongdoing on the part of the companies (or their executives) they have agreed to endorse. For instance, if a celebrity is endorsing a product that has unintended health consequences, the celebrity may want to cease supporting the company. Including reverse morals clauses in an endorsement contract empowers a celebrity to terminate his or her agreement with a company in the same manner in which a company may disengage.

PROTECTING THE BRAND FROM ATTACK

Very often, unscrupulous individuals seek to attack celebrity brands. This may include everything from late night telephone calls threatening prosecution for a false sexual assault allegation to a claim that the celebrity figure allegedly offered to pay the claimant to abort an unborn child. There is simply no limit to the way in which individuals may seek to attack and, in some circumstances, extort the brand. An assessment has to be made on the validity of the claim.  At the same time, there is a critical step that must be taken as soon as the brand comes under attack.  Every reasonable step must be taken to make the brand unassailable.  The best way to achieve that is to quickly determine instances in which the claimant has been dishonest or misleading in matters relating to the celebrity. Armed with that information, the celebrity must swiftly utilize that information in court, in the media or such other strategically determined intended audience.

 

We are in March.  The minds of many turn to March Madness as the NCAA hosts its annual tournament to crown college basketball’s national champion.  Of these, many want to take advantage of the tournament to promote their products or services.  However, this phrase is trademarked, and the owners are active in policing and protecting their mark, as sponsors pay large amounts for association with the championship.  It is important therefore to be careful of using “March Madness” in promotions and advertisements, as these uses could bring trouble.

“March Madness” – a Trademarked Term?

Yes, it is.  This, however, does not mean that newscasters, sports reporters or morning DJs can’t talk about the tournament using the name of the event. Instead, what it means is that commercial uses of the term that could imply some association with the event for which sponsors pay money, can be problematic – and could cost you or your sponsor money or time defending the use. So the safest way to avoid issues is to avoid the trademarked phrase in promotions and advertisements.

The NCAA was not the first to employ the March Madness theme for a basketball championship.  That honor goes to the Illinois High School Association. But those rights have been acquired, and are now protected vigorously by the NCAA (including associated marks such as “Final Four” and “Elite Eight”).  Marks objected to in the past by the NCAA include “April Madness” (for entertainment service), “Markdown Madness” (for auto sales services), “Skate Madness” (for skateboarding competitions) and “Freestyle Madness” (for various entertainment services).

Safe use.

In considering how best to use “March Madness” in a commercial setting, it is important to note that using the term in a manner where it is simply describing the event rather than for an attention-getting headline is more likely to be perceived as fair.  For example, in noting a list of events and other features, an ad may say, “During the March Madness tournament, we will be serving flights and celebrating the individual athletes from our home team.”  Using the term close to the event date rather than well in advance is also more likely to be perceived as fair, and not trading on the excitement that surrounds the games outside the context of the tournament itself.  The same considerations apply to sales of merchandise.

So be careful out there, and enjoy the games.

The Cleveland Indians are back in the World Series for the first time in nineteen years, and with it have come renewed protests over the team’s name and Chief Wahoo logo, a depiction some consider a highly offensive caricature.  This puts the team into the middle of a sustained and often emotional debate. Many people vigorously oppose the use of Native North American names and images as mascots and logos, saying they are demeaning and worse. The Chief Wahoo logo in particular stands out because it is a caricature.

It’s no secret that brands are big business and that most established businesses, large or small, make great effort to create brand awareness through consistent use of logos with their name. The names and logos are usually legally protected with a registered trademark. Creating brand recognition takes time, so it is not something that should be changed often.  When Tropicana tried to rebrand their orange juice packaging, sales plummeted and it was “a customer-relations fiasco” according to Advertising Age.  A SmartPlanet article analyzed some failed attempts at rebranding. The Gap’s brief logo change is one for the history books. All these brands ended up returning to logos that were tried and true.

All of this may soon be coming to a head.

Last December, the United States Court of Appeals for the Federal Circuit decided a case called In re Tam, in which it overruled the Trademark Office’s refusal to register “The Slants” as a trademark for a music group, finding that the term was disparaging to individuals of Japanese extraction. In a 9-3 decision, the Federal Circuit ruled that by barring registration of such trademarks, the disparagement provisions of Section 2(a) violates the First Amendment’s protection of freedom of speech. Tacitly acknowledging that their ruling would likely unleash a torrent of trademarks that many consider offensive, the court concluded:

Whatever our personal feelings about the mark at issue here, or other disparaging marks, the First Amendment forbids government regulators to deny registration because they find the speech likely to offend others. Even when speech “inflict[s] great pain,” our Constitution protects it “to ensure that we do not stifle public debate.”

The Trademark Office was widely expected to, and last month did, ask the Supreme Court to review the Federal Circuit’s decision in In re Tam. In a related move, Pro-Football, Inc. took the unusual step of asking the Supreme Court to hear its appeal of the federal district court decision cancelling six registrations for the Washington Redskins trademarks – which has not been ruled upon yet by the Court of Appeals – as part of the Slants appeal.

The Slants and Redskins cases both turn on the “disparaging” clause of Section 2(a). But if the Supreme Court decides to take on one or both of these cases, the statute’s bar on “immoral” and “scandalous” marks could easily be addressed at the same time: the constitutional issues are pretty much identical.  In the meantime, the Trademark Office – presumably seeking to avoid getting itself into any more controversy – has announced that action on applications that raise any of these Section 2(a) issues will be indefinitely suspended pending further court action.