|Friday, July 18
Updated: August 21, 6:41 PM ET
No ringing endorsement from corporate sponsors
By Darren Rovell
Kobe Bryant is paid handsomely to dribble a Spalding basketball. Eat McDonald's food. Drink Sprite.
Nike recently agreed to pay him at least $40 million over the next five years to wear its shoes and apparel.
As the star guard of the Los Angeles Lakers, which won three consecutive championships with him on the team, Bryant has become one of the most recognizable and highly marketable athletes in sports. Collectively, corporations pay him between $11 million and $15 million annually to attach his image, from his wide smile to his winning ways, to the products it sells.
At its very essence, they are buying his reputation. To enhance theirs.
But with news that Bryant has been charged for allegedly sexually assaulting a 19-year-old woman in Colorado, now is a time of crisis for both Bryant and the companies whose products he endorses. Brief, carefully worded statements were the order of the day, and accordingly corporate spokesmen offered support that neither distances nor draws itself closer to their high-paid pitchman.
"We have worked successfully with Kobe Bryant since 1997 and he remains under contract with us through 2005," said Scott Williamson, spokesman for soft-drink maker Coca-Cola, which produces Sprite. "We will have no further comment on this matter as it proceeds through the legal system."
"McDonald's has a relationship with Kobe Bryant; however, it will be inappropriate to comment or speculate about pending legal matters," said McDonald's spokesman Bill Whitman.
After hearing of the news, Upper Deck officials declined comment.
Since corporations have been down this road before, as athletes before Bryant have faced charges that put the companies they represent in uncomfortable positions, often there is a clause inserted into endorsement contracts that allow a company to sever its ties with the athlete. Whether such a clause may be included in any of Bryant's contracts has not been made public, but those familiar with the structure of such deals say it has become standard language in endorsement deals.
"Ten years ago, not many endorsement contracts had a morality clause," said Bob Williams, president of Burns Sports, a sports marketing agency. "Five years ago, about half of them did and in recent times, most of the contracts have a clause of some sort relating to behavior."
Save for traffic tickets, criminal convictions are usually grounds for a company to terminate an endorsement deal. But immoral behavior that tarnishes the company's image could be reason to slash the remaining years on a deal. In either case, a settlement may be reached between the athlete and company, though some contracts may specify the return of money already paid to the endorser.
Exercising such power is not unprecedented. The two most recent cases in which companies terminated deals citing behavior clauses included Latrell Sprewell and Chris Webber.
In 1997, Converse terminated Sprewell after he choked Golden State Warriors coach P.J. Carlesimo, an incident that resulted in Sprewell's 68-game suspension. Sprewell, who was making a reported $300,000 to $600,000 annually from the shoe company, sued Converse for firing him without just cause, but a court ruled in the shoemaker's favor.
In 1999, Chris Webber won a $2.61 million judgment from Fila, which terminated Webber after he was charged with marijuana possession while on a promotional trip for the company.
"The contract said that had he been convicted of a crime, we could terminate him," said Howe Burch, Fila's senior vice president of marketing. "But since he only paid an administrative fine and wasn't technically convicted, the court ruled in his favor."
Still, the legalese in endorsement deals offers corporations an escape hatch it may need should its representing athlete no longer maintain the image it sought to buy.
"The morality clause is where the rubber meets the road in contract negotiations," said Peter Land, general manager of Edelman's sports and entertainment practice, which negotiates endorsement deals on behalf of companies. "You're done with all of the terms and the company has done their background check on the player, but they still want to make sure that they are protected.
"If a company is willing to pay an athlete a lot of money to enhance the brand, some companies might expect that there is some form of compensation in addition to termination if the athlete hurts that brand," he said.
Since losing its case against Webber, Burch said his company has made it easier to terminate an athlete's contract if a similar situation occurs in the future. He said he believes that Bryant's current endorsers can stand by the Lakers star, but have to be careful with their marketing plans.
"If he's convicted of sexual assault, it will be hard to market him at retail," Burch said. "I can't imagine Nike promoting the guy who was convicted of a crime of that nature to kids."
A Nike official, though, was not prepared to distance the shoe maker from Bryant, at least as yet.
"As we've said before, we're pleased to have a relationship with Kobe Bryant; he's a great player," said Nigel Powell, spokesman for Nike. "Kobe has stated that he is innocent of the charges filed today. Understand that this is a legal matter and we cannot comment further at this time."
Fred Schreyer, who served as Nike's director of marketing from 1987 through 1992 and helped negotiate LeBron James' recent $90 million deal with the company, said he doesn't expect Nike to make a hasty decision.
"Nike worked hard to make sure they got Kobe and I don't think they are in any rush to get rid of him," Schreyer said. "This would have to play out further in order for them to terminate him. It would probably have to go to trial and some graphic and sordid details would have to come out. But Kobe's management team would never let it get to that point. He has too much to lose."
But should Bryant be convicted of the charge he now faces, Williams said he believes companies involved in sports may choose to steer away from individual athlete endorsements and seek a safer route.
"It's possible that companies will move away from the athletes and spend their ad budgets on sponsoring the events instead," Williams said.
Darren Rovell, who covers sports business for ESPN.com, can be reached at firstname.lastname@example.org