How brands part ways with celebrity partners


Adidas AG this week became the biggest brand to end a partnership with Kanye West after the rapper and designer’s anti-Semitic outbursts.

adidas said it cut ties with Mr. West, who goes by Ye, at considerable cost to his own business because his recent comments and actions had been “unacceptable, hateful and dangerous, and they violate the values ​​of diversity and inclusion, mutual respect and corporate equity”.

Mr. West could not immediately be reached for comment.

Some like-minded observers and writers have questioned why it took Adidas so long to announce its conclusion, more than two weeks into the partnership review.

“Every day you delay can hurt your brand,” Alan R. Friedman, a partner at entertainment industry law firm Fox Rothschild, said of such situations.

An Adidas spokesperson declined to comment beyond the company’s initial statement. But the process of separating a company from a famous business partner can be more complicated than it seems.

Bureaucracy can slow decision-making in times of crisis, said Mark DiMassimo, founder of New York-based ad agency DiMassimo Goldstein.

“When something comes along that requires quick, humane and unambiguous action, very few companies are prepared.”

— Mark DiMassimo, Founder of DiMassimo Goldstein

Brands often ask their ad agencies to gauge public opinion and determine whether to act while simultaneously working internally on potential responses, DiMassimo said. The resulting competing narratives may facilitate more delays, he said.

“When something happens that requires quick, humane and unambiguous action, very few companies are prepared,” DiMassimo said. “Customers can be like frogs in the proverbial pot of heating water.”

Marketers who have made up their mind can often quietly terminate a contract if it is relatively basic, such as those requiring a celebrity to appear at an event or allowing brands to use the name and likeness of someone for promotional purposes, said Christopher R. Chase, a specialist partner. in advertising and entertainment law at Frankfurt Kurnit Klein & Selz.

But cases in which celebrities help design products that bear their name and may even own some equity in the company are harder to solve, he said.

“If the talent retains some ownership, then you have to stop making the product entirely instead of just taking the name off,” Chase said. “It literally shuts down the factory to some degree.”

“If the talent retains some ownership, then you have to stop making the product entirely instead of just removing its name.”

— Christopher R. Chase, Partner at Frankfurt Kurnit Klein & Selz

Brands are increasingly relying on so-called morality clauses, which give them the right to terminate a contract when a spokesperson behaves in a way that could be perceived as damaging the reputation of the customer.

Offensive behavior may be specific to the company in question; Liquor brands typically include contract clauses prohibiting DUI arrests or drunken and disorderly behavior among their representatives, Chase said.

But moral clauses widened during the #MeToo movement, as backers of projects promoted by celebrities accused of sexual misconduct insisted on rewriting contracts so that any behavior deemed inconsistent with a brand’s stated values could trigger the termination, Fridmann said.

At the same time, vaguely worded moral clauses can lead to costly and potentially damaging litigation as lawyers argue over whether a spokesperson’s behavior constitutes a violation. While a brand may wish to terminate a contract if a spokesperson’s behavior does not please them, the celebrity legal team often argues that the language should only apply to much more specific breaches, as an arrest, Mr. Chase said.

Brands can also try to insure against potential monetary loss with liquidated damages clauses, which require the spokesperson to reimburse the company a certain amount as compensation for breach of contract. But these types of clauses aren’t particularly common, because the language defining the types of offenses that warrant such action must be very specific to be taken seriously by the courts, Chase said.

Brands should also carefully assess the risk when considering signing a spokesperson with a history of erratic or offensive behavior, especially if the person will play an outsized role in their marketing efforts. And it’s not just because such behavior could happen again, Chase said.

A brand may struggle to justify voiding a contract over new behavior when a celebrity’s legal team can point to similar instances that predated the agreement, Chase said.

“The talent lawyers said, ‘Look, you hire her because she’s kinda out there, so I’m not going to let you fire her because she’s doing something that’s kinda out there'” , did he declare.

Write to Patrick Coffee at [email protected]

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