When will endorsement companies stop snoozing at athlete sexual assault allegations?
In the wake of Peyton Manning’s
recent public relations nightmare, can anyone figure out how
the industry has allowed the storied NFL quarterback to be the
“endorsement king” for the past two decades? After reading Shaun King’s provocative New York Daily News article
, can anyone make sense of the fact not a single endorsement company —
not DirectTV, Gatorade, Nationwide or Papa John’s — has at least
temporarily suspended its contracts with the once-untouchable
quarterback who is well past the prime of his playing career?
You probably can’t.
In February 1996, Manning allegedly pulled down his pants and forcibly placed his genitals on University of Tennessee football trainer Jamie Naughright’s face while she was examining his foot in the locker room. Manning claimed he was mooning UT cross-country athlete Malcolm Saxon.
After reporting the alleged sexual assault to Knoxville’s Sexual Assault Crisis Center and UT authorities, Naughright found her position terminated. At the time of her discharge, Naughright had more than eight flawless years of employment at UT. Manning, on the other hand, continued his collegiate career relatively unscathed, and went on to make millions both on and off the NFL field — landing himself on Forbes’ “Highest Paid Athletes” list year after year. In 2015 alone, Manning topped the Forbes list with $15 million in endorsement earnings.
The Manning-Naughright legal saga has been in the public sphere for years, but it received little media traction.
But two days after the Broncos won Super Bowl 50, six women filed a federal lawsuit against the University of Tennessee, charging that the school enabled sexual assaults by student-athletes because of its alleged student culture and a legal system biased against the victims. In an effort to prove the “hostile sexual environment” created by UT, the plaintiffs’ complaint cited Naughright’s 20-year-old case against Manning.
Shortly thereafter, King obtained access to the entirety of Naughright’s two-decade-old complaint levied against Manning and UT, and new information emerged with respect to Naughright’s 2003 defamation lawsuit against Manning, his father and ghostwriter John Underwood for their 2001 book “Manning.” In no time, the public and media had become fixated on Manning’s potential sexual indiscretions.
Of importance, it was revealed Malcom Saxon sent a personal letter to Manning in December 2002, and urged him to “admit to what happened.” Saxon’s letter also reveals that Saxon essentially lost his UT eligibility for telling the truth and confirming Naughright’s story.
Saxon’s letter has recently been made public — but endorsement companies have turned a blind eye.
To date, no company has invoked any morals clause contained in Manning's endorsement contracts.
Because of the huge financial losses that companies can face from being tied to an athlete’s sex scandal, criminal conviction or doping allegation, morals clauses have become quite prolific in endorsement deals. Morals clauses, also referred to as “public image clauses,” “good-conduct clauses,” or “morality clauses,” provide an endorsement company the right to terminate, suspend or otherwise punish an athlete for engaging in criminal or reprehensible behavior, or conduct that may negatively impact his public image and, by association, the public image of such company.
Given that a company may pay an athlete millions to be the spokesperson for its product, and may spend additional millions building its advertising and marketing campaign around the individual, morals clauses provide a company the needed flexibility to terminate or suspend any relationship if an athlete’s public scandal or criminal behavior spells financial disaster for its investment.
As the distraction of an alleged Manning sexual assault stays in the forefront, whether DirectTV, Gatorade, Nationwide or Papa John’s decides to terminate, or at least suspend, its existing relationship with Manning will be contingent upon the scope and breadth of the negotiated morality clause in his contracts. Athletes often try to negotiate narrow morals clauses that can only be triggered in limited circumstances (i.e., a criminal conviction, an arrest or criticizing a company’s product), whereas endorsement companies favor broad morals clauses that give them the flexibility to quickly exit a deal for any reason that can spell financial ruin.
When Manning entered into his endorsement contracts, he had exceptional leverage — his legacy was still secure as one of the NFL's greatest players as a multiple-MVP award winner. Despite his tremendous star power, it would have been poor judgment for a company like Gatorade not to force Manning to agree to a broad morals clause that would permit the sports drink giant to curtail its relationship for any action that could lead to public disrepute, contempt, scandal or ridicule for Manning or for Gatorade. After all, it is not uncommon for an endorsement contract to contain both a narrow morals clause and a more broadly defined morals clause, to mitigate any enforceability challenges.
The question, then, is if a sexual assault scandal with damning evidence contained in now public court documents is not an action that “could lead to public disrepute, contempt, scandal or ridicule,” then what is?
Manning provides just one example of the much larger issue — that endorsement companies often ignore marquee athletes and sexual assault allegations because the safety of women is irrelevant to profit margins.
If endorsement companies do not turn a blind eye to sexual assault, then why did Nike sign Jameis Winston to a lucrative endorsement deal in 2015, one day after Erica Kinsman filed a civil suit against the athlete? And despite Florida State reaching a $950,000 Title IX settlement with Kinsman in January, why has Nike not suspended, fined or terminated Winston by invoking a negotiated morals clause?
Even Kobe Bryant’s 2003 rape scandal did not definitively derail his endorsement career. While a few companies, like McDonalds, immediately invoked negotiated morals clauses and terminated their contracts with Bryant when he was initially charged with rape, endorsements with Sprite and Nike remained intact. Moreover, more than a decade after rape charges were dropped, even though Bryant ultimately entered into a settlement with the alleged victim, the “Black Mamba” still finds himself at the top of every endorsement earnings list, taking home over $23 million in endorsements in 2015 alone.
That none of the aforementioned athletes faced criminal convictions for sexual assault allegations should come as no surprise. A 1998 study by Jeffrey Benedict and Alan M. Klein revealed that athletes manage to avoid conviction more readily than any other men charged with sexual assault.
According to the Justice Department statistics, 32 percent of rapes reported to police in 1990 resulted in an arrest. More than 54 percent of these suspects were convicted.
For athletes, the numbers are almost reversed. Of the 217 felony rape complaints made to police involving athletes between 1986 and 1995, 79 percent resulted in arrests. But of those 172 arrests, only 31 percent resulted in convictions.
Popular athletes are always in the news, and often claim their fame leads to hoax accusations. But sham charges don’t entirely explain the staggeringly low sexual assault conviction rate. Part of the explanation is that many prosecutors are reluctant to bring cases against athletes to trial; it is extremely difficult for the prosecution to prove an alleged sexual assault victim’s allegations beyond a reasonable doubt when often there are no corroborating witnesses. Another explanation is accused athletes have money, powerful lawyers, public relations specialists and other popular personalities to come to their defense.
Given the difficulty in successfully prosecuting sexual assault allegations, perhaps it is time for endorsement companies to look at allegations with a sharper eye. Companies can partially invoke morals clauses if they don’t want to completely sever ties with a prized athlete: While sexual assault investigations remain ongoing, companies can suspend an agreement but retain the services of the athlete for a later day, once more information becomes certain; companies can also impose a financial penalty for the "immoral" behavior but allow the endorsement to continue; or, companies can seek damages for breach of an agreement.
If this culture of apathy toward athlete sexual assault is ever going to change, customers will have to lead the charge.
Ultimately, the invocation of morals clauses turns on business considerations: Will the non-breaching party gain more (financially or otherwise) by suspending or severing ties with the athlete than by keeping the contractual relationship in place? If a product’s profits drop significantly following a sexual assault scandal, a decision to invoke a morals clause may follow suit.
Manning’s squeaky clean image may be forever tarnished. Perhaps it is time for some of his endorsement contracts to be temporarily suspended — at least, until more information about his alleged sexual assault comes to light.
You probably can’t.
In February 1996, Manning allegedly pulled down his pants and forcibly placed his genitals on University of Tennessee football trainer Jamie Naughright’s face while she was examining his foot in the locker room. Manning claimed he was mooning UT cross-country athlete Malcolm Saxon.
After reporting the alleged sexual assault to Knoxville’s Sexual Assault Crisis Center and UT authorities, Naughright found her position terminated. At the time of her discharge, Naughright had more than eight flawless years of employment at UT. Manning, on the other hand, continued his collegiate career relatively unscathed, and went on to make millions both on and off the NFL field — landing himself on Forbes’ “Highest Paid Athletes” list year after year. In 2015 alone, Manning topped the Forbes list with $15 million in endorsement earnings.
The Manning-Naughright legal saga has been in the public sphere for years, but it received little media traction.
But two days after the Broncos won Super Bowl 50, six women filed a federal lawsuit against the University of Tennessee, charging that the school enabled sexual assaults by student-athletes because of its alleged student culture and a legal system biased against the victims. In an effort to prove the “hostile sexual environment” created by UT, the plaintiffs’ complaint cited Naughright’s 20-year-old case against Manning.
Shortly thereafter, King obtained access to the entirety of Naughright’s two-decade-old complaint levied against Manning and UT, and new information emerged with respect to Naughright’s 2003 defamation lawsuit against Manning, his father and ghostwriter John Underwood for their 2001 book “Manning.” In no time, the public and media had become fixated on Manning’s potential sexual indiscretions.
Of importance, it was revealed Malcom Saxon sent a personal letter to Manning in December 2002, and urged him to “admit to what happened.” Saxon’s letter also reveals that Saxon essentially lost his UT eligibility for telling the truth and confirming Naughright’s story.
Saxon’s letter has recently been made public — but endorsement companies have turned a blind eye.
To date, no company has invoked any morals clause contained in Manning's endorsement contracts.
Because of the huge financial losses that companies can face from being tied to an athlete’s sex scandal, criminal conviction or doping allegation, morals clauses have become quite prolific in endorsement deals. Morals clauses, also referred to as “public image clauses,” “good-conduct clauses,” or “morality clauses,” provide an endorsement company the right to terminate, suspend or otherwise punish an athlete for engaging in criminal or reprehensible behavior, or conduct that may negatively impact his public image and, by association, the public image of such company.
Given that a company may pay an athlete millions to be the spokesperson for its product, and may spend additional millions building its advertising and marketing campaign around the individual, morals clauses provide a company the needed flexibility to terminate or suspend any relationship if an athlete’s public scandal or criminal behavior spells financial disaster for its investment.
As the distraction of an alleged Manning sexual assault stays in the forefront, whether DirectTV, Gatorade, Nationwide or Papa John’s decides to terminate, or at least suspend, its existing relationship with Manning will be contingent upon the scope and breadth of the negotiated morality clause in his contracts. Athletes often try to negotiate narrow morals clauses that can only be triggered in limited circumstances (i.e., a criminal conviction, an arrest or criticizing a company’s product), whereas endorsement companies favor broad morals clauses that give them the flexibility to quickly exit a deal for any reason that can spell financial ruin.
When Manning entered into his endorsement contracts, he had exceptional leverage — his legacy was still secure as one of the NFL's greatest players as a multiple-MVP award winner. Despite his tremendous star power, it would have been poor judgment for a company like Gatorade not to force Manning to agree to a broad morals clause that would permit the sports drink giant to curtail its relationship for any action that could lead to public disrepute, contempt, scandal or ridicule for Manning or for Gatorade. After all, it is not uncommon for an endorsement contract to contain both a narrow morals clause and a more broadly defined morals clause, to mitigate any enforceability challenges.
The question, then, is if a sexual assault scandal with damning evidence contained in now public court documents is not an action that “could lead to public disrepute, contempt, scandal or ridicule,” then what is?
Manning provides just one example of the much larger issue — that endorsement companies often ignore marquee athletes and sexual assault allegations because the safety of women is irrelevant to profit margins.
If endorsement companies do not turn a blind eye to sexual assault, then why did Nike sign Jameis Winston to a lucrative endorsement deal in 2015, one day after Erica Kinsman filed a civil suit against the athlete? And despite Florida State reaching a $950,000 Title IX settlement with Kinsman in January, why has Nike not suspended, fined or terminated Winston by invoking a negotiated morals clause?
Even Kobe Bryant’s 2003 rape scandal did not definitively derail his endorsement career. While a few companies, like McDonalds, immediately invoked negotiated morals clauses and terminated their contracts with Bryant when he was initially charged with rape, endorsements with Sprite and Nike remained intact. Moreover, more than a decade after rape charges were dropped, even though Bryant ultimately entered into a settlement with the alleged victim, the “Black Mamba” still finds himself at the top of every endorsement earnings list, taking home over $23 million in endorsements in 2015 alone.
That none of the aforementioned athletes faced criminal convictions for sexual assault allegations should come as no surprise. A 1998 study by Jeffrey Benedict and Alan M. Klein revealed that athletes manage to avoid conviction more readily than any other men charged with sexual assault.
According to the Justice Department statistics, 32 percent of rapes reported to police in 1990 resulted in an arrest. More than 54 percent of these suspects were convicted.
For athletes, the numbers are almost reversed. Of the 217 felony rape complaints made to police involving athletes between 1986 and 1995, 79 percent resulted in arrests. But of those 172 arrests, only 31 percent resulted in convictions.
Popular athletes are always in the news, and often claim their fame leads to hoax accusations. But sham charges don’t entirely explain the staggeringly low sexual assault conviction rate. Part of the explanation is that many prosecutors are reluctant to bring cases against athletes to trial; it is extremely difficult for the prosecution to prove an alleged sexual assault victim’s allegations beyond a reasonable doubt when often there are no corroborating witnesses. Another explanation is accused athletes have money, powerful lawyers, public relations specialists and other popular personalities to come to their defense.
Given the difficulty in successfully prosecuting sexual assault allegations, perhaps it is time for endorsement companies to look at allegations with a sharper eye. Companies can partially invoke morals clauses if they don’t want to completely sever ties with a prized athlete: While sexual assault investigations remain ongoing, companies can suspend an agreement but retain the services of the athlete for a later day, once more information becomes certain; companies can also impose a financial penalty for the "immoral" behavior but allow the endorsement to continue; or, companies can seek damages for breach of an agreement.
If this culture of apathy toward athlete sexual assault is ever going to change, customers will have to lead the charge.
Ultimately, the invocation of morals clauses turns on business considerations: Will the non-breaching party gain more (financially or otherwise) by suspending or severing ties with the athlete than by keeping the contractual relationship in place? If a product’s profits drop significantly following a sexual assault scandal, a decision to invoke a morals clause may follow suit.
Manning’s squeaky clean image may be forever tarnished. Perhaps it is time for some of his endorsement contracts to be temporarily suspended — at least, until more information about his alleged sexual assault comes to light.
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