The celebrity world is a fickle one.
Flash back two years ago, to the summer of 2018 and Harry Maguire was riding high, on an inflatable unicorn no less. The England central defender won many plaudits for his resolute defending and towering headers at the Football World Cup, helping England reach the semi finals and earning himself a big money move to Manchester United the following season.
Just two years later things do not look so rosy for Maguire, who now finds himself having to appeal against a guilty verdict for repeated bodily harm, attempted bribery, violence against public employees and insult, following his recent arrest and subsequent trial whilst on holiday on the Greek island of Mykonos.
If Maguire is ultimately found guilty (and at time of print his appeal is still yet to be brought before the Greek courts) the immediate and relatively short-term impact on his career is significant in itself – a suspended prison sentence and a period during which he will be deemed to be unavailable for selection in the England squad.
But it is the long-term impact on Maguire’s career, not just as a footballer but as a person of interest, which is where he stands to lose the most should the Greek court refuse to overrule its previous decision.
The reason for this is the endorsement agreements Maguire stands to potentially lose or miss out on in the future following the outcome of his case.
Celebrity Endorsement Agreements
Major corporations invest a great deal of money to have their products endorsed, sponsored and/or promoted by public figures.
The activities an individual must do to sufficiently promote the corporation’s products will vary from contract to contract and depend on the type of product being promoted as well as the individual engaged to promote them, whether that be YouTube influencer, sportsperson or model. However, generally speaking, individuals will be required to make public appearances at certain events, be included in advertising campaigns for the products and actively promote the products on social media.
These agreements can be lucrative for both parties:
- the individual will receive considerable sums to promote the corporation’s products and likely benefit from free products too; and
- the corporation is able to maximise its brand exposure and promote its products and/or services to the individual’s considerable media following.
However, the relationship is founded on the corporation identifying the individual as the type of person best suited to promote its products and publicly represent its brand. If the individual does anything which threatens to bring the corporation into disrepute or tarnish the corporation’s image, then the corporation will often waste no time in severing ties with the individual to try and minimise any damage by association
For context, when Tiger Woods was embroiled in his own media scandal 10 years ago, he lost approximately $22million in endorsements from companies like Gatorade, AT&T and Accenture. Harry Maguire’s current football boot deal with Puma is worth £700,000 per year, which gives you an idea of the financial opportunities that are at stake for him.
But how are corporations able to axe their relationships with individuals whose public image changes once the endorsement contract has been entered into?
Termination Rights in Endorsement Agreements
It is likely that the corporation will have a number of termination rights in its endorsement agreements.
Of particular importance will be a right to terminate for any of the following reasons:
- the individual commits a crime;
- the individual does something or becomes involved in something that:
- could expose the corporation to disrepute, contempt, scandal or ridicule;
- would tend to shock, insult or offend the public;
- reflects unfavourably on the corporation’s reputation or the products themselves; or
- would prejudice the production or successful sales and exploitation of the products.
The circumstances in which these termination rights are triggered can, with the exception of the commission a crime, be very subjective and will usually be at the discretion of the corporation, depending on its values and the markets in which it operates. For example:
- most companies would not want to be associated with an individual shown to be taking or buying drugs or other illegal substances or being reported as making racist or homophobic remarks;
- a gym or sports company is unlikely to want the individual to be photographed smoking, drinking heavily or maybe even eating unhealthy food;
- a company with a strong family brand would not want the individual to be involved in a sexual scandal or inappropriate behaviour;
- a financial company is unlikely to want to be associated with an individual who becomes bankrupt or has other financial problems.
We cannot know what termination rights Puma and Harry Maguire’s other sponsors have in their endorsement contracts with him. However, it is likely that they will be watching the retrial of his case carefully and monitoring the impact it has on their share price and sales in the coming weeks and months.
For Maguire, one feels that, unless he is found guilty, his sponsors will stand by him and with the market weight he carries as a member of both the Manchester United and England first XI, some sponsors may be minded to retain him regardless of the outcome.
The next few weeks will be some of the toughest of Maguire’s career, as he not only faces a retrial of his case in Greece but also a damage limitation job to keep his lucrative sponsors on side. If nothing else, he can perhaps console himself with the fact that 2020 has been a year to forget for most of us.