Can Medalist Ryan Lochte Stop His Endorsement Deals From Hemorrhaging?
“Gold medalist Ryan Lochte has some interesting challenges ahead of him in the coming months,” says Babson Arts and Entertainment Law Professor Toni Lester.
Lochte was accused of lying to Brazilian authorities about being assaulted at a gas station while in Rio for the games this summer.
As a result, companies like Speedo and Ralph Lauren announced they were dropping him from their endorsement contracts.
“The contracts probably include ‘morals’ clauses allowing the companies to drop Lochte if he behaves in manner deemed distasteful to the public,” says Lester.
She observes that “Many courts look to press coverage as a proxy for public opinion. However, if public opinion is divided, that might help Lochte if he were to challenge those terminations in court. That’s what happened to football player, Rashad Mendenhall, when HanesBrands, Inc. dropped him from a lucrative endorsement deal after Mendenhall tweeted about Osama bin Laden right after 9-11. The judge in the case said he was open to hearing about the divided online comments from the public about the tweets. As a result, HanesBrands settled the case with Mendenhall. If Lochte and his team can show that part of the public is on his side, you never know what can happen.”
For more on the topic of morals clauses in celebrity endorsement contracts, see Lester’s “Finding the ‘Public’ in ‘Public Disrepute’ – Would the Cultural Defense Make a Difference in Celebrity and Sports Endorsement Contract Disputes? – The Case of Michael Vick and Adrian Peterson“.