Contractually obliged to play ball

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Authored by: Jamie Cheung

The disappointment of fans at the absence of Lionel Messi from the recent much-hyped exhibition match between Inter Miami and the local Hong Kong team puts a spotlight on the complex contractual circumstances underlying major sporting or entertainment events which often revolving around one, or more star performers. In this article, we consider some of the issues that event organisers and brands should be aware of when working with celebrities, influencers, and brand ambassadors.

Back-to-back contracts

According to reports, one of the key terms of the Government’s funding agreement with the Hong Kong event organiser was ‘for Messi to participate in the match for at least 45 minutes, subject to fitness and safety considerations.’ In major events like this one, there are likely many layers of contracts involved, for instance between:

• the Government and the event organiser;
• the event organiser and the football club;
• the football club and its players;
• the event organiser and other performing talent, or their manager/agent;
• the event organiser and ticket holders.

Where back-to-back contracts are involved, it is important to make sure that the rights and obligations flow through every linked contract. However, a party’s ability to ensure that this actually occurs will depend on their bargaining power against the opposite party/parties to the contract. In particular, celebrities can often be notoriously difficult to negotiate against. If an event hinges on getting a particular celebrity to show up and preferably, also play ball, an event organiser often may not really have much room to manoeuvre, especially as against the most sought after top celebrities. In such cases, one should try to include contingency clauses, provide for alternative performance, or specify particular remedies if the star of the show is unable to perform as expected.

Brand and reputation protection

While the recent case occurred through non-performance of a positive obligation, other situations may call for preventing specific actions. These may include:

1. morality clauses, which provide for the right to terminate a contract if a party engages in certain types of behaviour. Such terms are common in sports and entertainment contracts, and can help brands minimise the fallout from any negative publicity crises related to the personal conduct of brand ambassadors or influencers;
   
   
2. non-competition clauses are particularly important for brand ambassador contracts. If your brand ambassador is endorsing your brand’s products, it will be, at the very least, embarrassing for them to be seen wearing or using a competitor’s products;
   
   
3. confidentiality clauses are standard fare for many types of contracts, including entertainment contracts. Both brands and stars have a vested interest in ensuring that information about potential collaborations will be released in a controlled manner, whether through formal press releases or informal ‘leaks’;
   
   
4. intellectual property clauses should set out guidelines on how a brand’s intellectual property should be used, as well as providing for the ownership of any new intellectual property or derivative works created by such use.
   

Advertising materials

Apart from the no-show at the event itself, issues may arise if an event’s advertising and promotional materials heavily feature a specific person who eventually does not appear, which may amount to misrepresentation or a false trade description to the public.

While it is unlikely that the advertising for this event expressly promised that Messi would play in the match, the implication alone may have created expectations among spectators and fans. When expectations are created and not met (no matter how reasonable the cause), the risk of disappointment and complaints is high. In this case, it resulted in over 1,300 complaints to the Consumer Council, and the Customs and Excise Department has set up a designated team to follow up on whether there was any contravention of the Trade Descriptions Ordinance in relation to the event.

How we can help

Deacons’ Intellectual Property Practice can help you navigate the legal and regulatory issues in media, entertainment, and sports law. We have wide-ranging experience in advising local and multinational clients on promotional and sponsorship arrangements, advertising, and marketing. Please contact us for more information.

Key Contacts

Kelley Loo

Partner | Intellectual Property

Email or call +852 2825 9575

Theresa Luk

Partner | Intellectual Property

Email or call +852 2825 9482

Charmaine Koo

Consultant | Intellectual Property

Email or call +852 2825 9300