Financials on and off the field
Paul Tweed, Wendy Doyle, Michael O’Keeffe, Niall Woods and Barry Crushell

06 Nov 2018 / employment Print

‘Drawback’ clauses give sports sponsors an opt-out

A recent sports and employment law panel discussion, organised byTully Rinckey Ireland, scrutinised the practical consequences of off-field activities on players’ commercial prospects.

Over 100 industry professionals attended the event at Trinity City hotel in Dublin on 24 October.

Speakers included media specialist Paul Tweed (Tweed Law), Wendy Doyle and Barry Crushell (Tully Rinckey Ireland partners), Michael O’Keeffe of reputation management advisors Teneo, and Niall Woods of cross-sport management agency Navy Blue. 

Core terms

Wendy Doyle of Tully Rinckey pointed out that contracts of employment contain the same core terms. However, athletes will typically have sponsorship clauses that will affect their earning potential, and that earning potential can be affected by their off-field activities.

It is essential, therefore, that both athletes and their clubs are aware of what could bring the club into disrepute, thereby affecting earning potential.

Former rugby international Niall Woods said that the younger generation of athletes coming through are more tech and social media savvy than their earlier counterparts. 

Promising athletes are informed from an early stage of their sporting careers of the potential positive and negative impacts of social media. Many of them are using social media to their advantage in preparation for professional careers, even ahead of that happening.

PR disasters

Media lawyer Paul Tweed advised that when PR disasters occur, it is very important for athletes to be strategic in their response. 

Those in the glare of public scrutiny need to act rapidly and selectively in deciding how and to whom they respond. There are a variety of options that athletes can and should consider beyond legal recourse, including a public relations strategy. 

Due diligence

Teneo’s Michael O’Keeffe pointed out that large corporate entities were increasing their due diligence on those athletes they were deciding to hire, and with whom they were contemplating sponsorship terms.

The fallout from a PR disaster could be financially severe, he said. Many organisations now looked for, and included, drawback clauses in cases where athletes placed themselves, and their sponsors, in reputational difficulty.

 

 

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