Behavioural issues – impact on sponsorship

How many of us have flicked over the seemingly weekly reports, particularly in the more sensational elements of our news media, of bad behaviour by high-profile sports stars and thought nothing further of the implications for, as an example, the principle sponsor of the team in their chosen sport. Recently, the NRL, has gone so far as to suggest specific restrictions in player good behaviour codes in order to combat the apparently growing trend of its players being provoked into off-field incidents that almost immediately find themselves broadcast in the public domain via outlets such as YouTube.

Whilst such incidents can have an obvious detrimental impact on the brand image of the player concerned and their sport, increasingly such off-field activities are being seen as having commercial consequences for high-profile sponsorship arrangements. As a general statement, it is becoming increasingly common for sponsorship arrangements to include behavioural requirements not only for the sponsored entity (eg. a sporting code or team) but also the activities of individual players which might have a material adverse impact on the reputation of the sponsor or its products.

At first glance, it is not difficult to see that the brand image of a household product could suffer negative exposure as a result of the off-field antics of a high-profile player. But what about some of the more indirect sponsorship implications? For example, in recent days the naming rights sponsor of the team which has been withdrawn from this year's Tour de France because of the failed drug tests of two of its stars has hinted publicly that it will withdraw its sponsorship. However, one of the team's equipment suppliers, with a much less high-profile arrangement has stated that it will stop supporting the team and its athletes on the basis that it will not support those who discredit their sport and want to make sure that the public knows what they stand for as a business.

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Bell Gully manages issues such as sponsorships, player contracts, financing, merchandising, disciplinary hearings and constitutional issues. Our clients include the country's leading sporting teams, players and organisations.

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