A recent petition is calling for Gillette to end its naming rights sponsorship of the Patriots’ stadium in response to Robert Kraft’s criminal charges. These developments could lead to morals clauses regarding team owner conduct being standard in stadium naming rights agreements.
The sports world was rocked last month when New England Patriots owner Robert Kraft was charged with soliciting prostitution at a day spa involved with human trafficking. Many questions remain, including whether Kraft will be found guilty and if (and how) the NFL will punish Kraft. This scandal is likely to lead, however, to changes in a different area of sports law: stadium naming rights agreements.
A petition on Care2 entitled “Gillette, Is Exploiting Victims of Human Trafficking the ‘Best Men Can Be’?” is calling for Gillette to drop its naming rights sponsorship of the Patriots’ stadium, Gillette Stadium. The petition is gaining traction with over 17,000 supporters so far. The petition argues that Gillette, who has recently made headlines with its #MeToo inspired “The Best Men Can Be” marketing campaign, should not endorse a team whose owner has supported human sex trafficking.
Whether Gillette will end its naming rights agreement is an open question. However, this petition has the potential to change how future naming rights agreements are structured. Specifically, in light of the Kraft scandal, companies may want to include “morals clauses” in their naming rights agreements for stadiums.
Morals clauses have been involved in contracts for professional athletes since Babe Ruth. They generally allow for a team or league to terminate their contracts with a player if the player engages in some level of scandalous, immoral, or illegal conduct. These contracts, like those in the NFL, grant a team wide discretion to determine what conduct results in termination.
In addition, morals clauses also have a presence in non-league contracts. Company endorsement and promotional agreements with athletes are very likely to include morals clauses. They traditionally are meant to protect companies from being associated with inappropriate athlete behavior, though they can also serve to protect athletes from immoral actions by companies.
Some stadium naming rights agreements feature some form of morals clauses. For instance, the contract that named the St. Louis Blues arena the Kiel Center prohibited the use of the arena mark, arena graphic logo, and team trademarks in a way “that is contrary to public morals” or “reflects unfavorably on the good name, goodwill, reputation or image” of the company and team. Such a contract, however, would not allow a company to discontinue its naming rights agreement if the team’s owner engaged in immoral conduct.
The Robert Kraft scandal could serve to encourage the inclusion of stronger morals clauses into future stadium naming rights clauses. Such clauses would allow a company to terminate a naming rights contract if the team owner engages in scandalous, immoral, or illegal conduct. This would be comparable to the use of morals clauses in company endorsement contracts. Interestingly enough, the inclusion of morals clauses would also benefit teams that want to disassociate themselves from companies that engage in immoral behavior.
All in all, the Kraft scandal may encourage drafters of stadium naming rights agreements to include morals clauses. This could serve to benefit companies that want to distance themselves from scandalous owners like Robert Kraft, as well as teams that want to disassociate themselves from CEOs and massive corporate scandals. Whether these clauses will be included in stadium naming rights agreements is yet to be seen, but considering their mutual benefits for teams and companies, it seems more likely than not that they will be a staple of future contracts.
Photo Credit: Benard Gagnon