By Glenn Demby
In June, EA Sports tabbed Chicago Blackhawk Patrick Kane for the cover of its upcoming (Sept. 15) ES Sports NHL 16 game. It seemed the perfect choice. Kane, a 3-time Stanley Cup winner, is handsome, charismatic and, somewhat rare for a hockey star, American. But Kane is now under police investigation for alleged rape in his hometown of Hamburg, NY. So, EA has taken Kane off the cover—the first time it’s ever pulled a cover athlete off a game before its release.
The moral: Celebrities can turn radioactive in the blink of an eye. One way to protect yourself is to include a morals clause in your licensing agreement allowing you to terminate if the celebrity’s behavior doesn’t meet specific standards. But morals clauses are often the subject of intense negotiation. A key issue is the scope of the conduct by the celebrity that triggers the licensee’s termination rights. The best outcome for a licensee is a broad clause like this:
Broad Morals Clause
If at any time, in the opinion of Licensee, Celebrity becomes the subject of public disrepute, contempt, or scandal that affects Licensee’s image, reputation, products or goodwill, including but not limited to Celebrity’s communications on social media and/or Celebrity’s participation in potentially offensive, controversial, inappropriate or objectionable public activities, Licensee may, upon written notice to Celebrity, immediately suspend or terminate this License Agreement without owing Celebrity any further royalties or fees.
If you lack the leverage to command a broad clause, you may have to settle for a narrower version like this:
Narrow Morals Clause
Licensee may terminate this Agreement if Celebrity is convicted of a felony or misdemeanor of moral turpitude that is likely to cause a diminution in the value of Licensee’s commercial association with Celebrity, upon 60 days’ written notice, in which case, Licensee must pay Celebrity any sums that may be due for services then already rendered or for authorized expenses incurred by Celebrity or payments due prior to the date of termination.
Note: Only the broad version would work for EA in the Patrick Kane case discussed above since Kane hasn’t yet been charged, let alone convicted of anything.