Drive (Virtually) to Survive and Thrive? – Innovative use of endorsement deals in challenging times
With the cancellation or postponement of so many sporting events since the outbreak of Covid-19 and the governmental responses to it, many brands and sponsors are understandably concerned about the ways to maximise the benefit or limit the exposure of any existing agreements in place with endorsed athletes. What, then, are the options available to brands?
Termination or postponement of agreements
Understandably, the Covid-19 pandemic has seen brands’ marketing budgets frozen or slashed. Brands have been quick to seek ways to protect themselves financially. The effects of Covid-19 disruption on commercial agreements (force majeure provisions, frustration, compensation and termination clauses etc.) have been discussed at length in many articles recently - here and in the sporting context specifically here.
Other commercial options available to brands include seeking to “pause or defer” agreements. This can be useful in situations where endorsement periods are tied to specific events which have themselves been postponed. It is unlikely that the contract itself will provide for such postponement, however sensible commercial discussions could lead to the parties entering into amendments that are mutually agreeable.
Innovative Use of Ambassadors
“Repurposing” of Ambassadors – An interesting development in the world without live sport has been the increased popularity and exposure of esports and gaming equivalents – a prime example being in motor racing. Faced with a lack of “real” races, Formula One (as well as independent esports and virtual racing organisations) have held virtual grands prix on the dates of the postponed or cancelled races. A unique element that these new virtual races bring is the ability for pro gamers, real world racers and enthusiastic celebrities to compete against each other.
Certain brands already involved in the space have seemingly utilised image rights and personal appearance inventory from ambassadors in other areas for the purposes of cross-pollination of fan bases. Red Bull - the energy drink manufacturer and Formula One team - decided to include Ben Stokes, cricketer and Red Bull ambassador, as a one of its participants in the virtual Australian Grand Prix. Likewise, DP World - a sponsor of both the Renault F1 team and golfer Ian Poulter - organised for Poulter to take one of the Renault seats in the virtual Bahrain Grand Prix.
These brands may well be using pre-existing personal appearance day rights previously earmarked for filming or meet and greets for these gaming events. By using existing ambassadors, these brands have the comfort of the contractual protections in place for more traditional uses and also already have the image rights that can allow them to amplify the appearance post the event.
These crossover events can serve a number of purposes:
- the use of stars helps promote the virtual races themselves (and indeed the brands who sponsor or operate motor racing teams) by giving the events a novel and interesting feel;
- it can expose fans of other sports (cricket or gold in the above instances) to motor racing and reciprocally introduces motor racing fans to these personalities from other sports;
- having an esports version of a traditional sport brings a new (younger) gaming audience to that traditional sport; and
- it also introduces fans of the traditional version of a sport to the gaming version as they seek to fill the void left by postponed and cancelled fixtures, events and races.
Innovative Social Media Use – It is common for endorsement agreements to include social media rights for brands and obligations on ambassadors to post content. These rights have become increasingly important with ambassadors at home with plenty of time to create their own content. This lockdown has also provided brands with a great opportunity to experiment with new and innovative forms of digital activation. These rights do carry with them certain risks due to the lack of control the company will have over the content. Sponsors can protect themselves and amplify the effectiveness and reach of the social media content by:
- having an effective yet flexible consent/approval process for social media posts. This, alongside doing proper due diligence (to ensure that their current social media content fits with the brand ethos) prior to engaging the ambassador, can allow for more effective endorsement;
- ensuring ASA and CMA compliance by making sure that “paid-for” content is clearly identified as such;
- insisting on receiving whitelisting, re-posting and removal/editing rights; and
- having brand guidelines in place.
In the grand scheme of the Covid-19 pandemic, these small novelties are just that – novelties. But whether it is watching Ian Poulter “crash” his car whilst being interviewed during a virtual race or attempting Simone Biles’ handstand challenge, these moments offer the opportunity to engage an audience which goes beyond the traditional target demographic. What we can see is that both sport and brands do have the ability thrive in lockdown, provided they are able to recognise the need to adapt and respond accordingly.
IBA Annual Conference
The IBA heads to Miami for its 2022 Annual Conference bringing together thousands hundreds of lawyers from around the world.
Joint Venture Opportunities
Join our panel where we will discuss various topics including Joint Venture structuring and Partner procurement.
Mind your business: Safeguarding your business against loss of mental capacity
Practical considerations to safeguard your business against loss of mental capacity.
FT Wealth quotes Sarah Anticoni on forum shopping
"Being the first to file for divorce is not a foolproof way of securing an English hearing"
What can UK investors interested in Life Sciences learn from their more experienced, including US, counterparts?
The recent tie-up between Canary Wharf and Kadans demonstrates the enthusiasm to access the lucrative UK life sciences market.
Helen Coward writes for Tax Journal on the main purpose test for SDLT group relief
Mainly ignored? The main purpose test for SDLT group relief
The Ayes have it - Collateral Warranties can be a ‘Construction Contract’
The Court of Appeal handed down its judgment in the case of Abbey Healthcare (Mill Hill) Limited v Simply Construct (UK) LLP
Charles Russell Speechlys advises Caretech Holdings PLC on its proposed £870.3 million take private
Charles Russell Speechlys is advising the independent board of Caretech Holdings PLC, in its take private sale to Amalfi Bidco Limited.
Charles Russell Speechlys advising Battery Ventures on the sale of SPT Labtech for £650 million.
Battery Ventures has raised over $9 billion to invest in software and services, enterprise infrastructure, and much more around the world.
Windrush Day 2022 – supporting access to justice
Charles Russell Speechlys is proud to continue supporting survivors of the Windrush scandal in their fight for justice.
The Leasehold Reform (Ground Rent) Act 2022: Landlords and developers beware serious sanctions for non-compliance
The Leasehold Reform (Ground Rent) Act 2022 received Royal Assent on 8 February 2022 and will come into force on 30 June 2022.
EG quotes Emma Preece on the Picturehouse and BNY Mellon rent arrears cases
“The case is being closely watched by landlords and tenants alike as the impact of the pandemic lives on in the commercial property sector”
Charles Russell Speechlys has advised long-standing client Stonegate on a series A investment into Peckwater Brands
Stonegate is one of the largest pub companies in the UK with a rich portfolio that covers over 4,500 sites.
Pro bono support for major office premises move for charity in Stoke-on-Trent
Emmaus entities provide safe homes, community support and meaningful work to formerly homeless people across the UK.
Financier Worldwide quotes Rachel Warren on the UK’s Economic Crime Act
Evaluating the UK’s Economic Crime Act
Julia Cox and Felicity Chapman write for International Adviser on the rise of pre-nups in the UK
Julia Cox and Felicity Chapman write for International Adviser on the rise of pre-nups
Property Patter: Reasonable Endeavours
What does it mean to use ‘best’, ‘all’ or ‘reasonable’ endeavours?
Could the UK’s Life Sciences Vision be restricted by its Immigration Policy?
We explore some of the visa options that may be open to businesses in the sector and their relative pros and cons.
New Swiss succession law on the transfer of businesses
On 10 June 2022, the Federal Council adopted its Message amending the Civil Code on the transfer of businesses by succession.
Joshua Green writes for Spear's Magazine on Wagatha Christie’s lessons for HNWs
Wagatha Christie’s lessons for HNWs