Maria Sharapova falls from grace
By Prof Dr Ian Blackshaw
The emotional admission, on 7 March, 2016, by Maria Sharapova, the world’s highest paid female athlete - last year she earned over US$ 30 million from prize money and endorsements - that she had tested positive for a banned substance at the Australian Open Tennis Tournament in January of this year came as a surprise and also a shock to her many fans and also to her many sponsors!
She will be suspended by the International Tennis Federation from 12 March, whilst her case is investigated. It appears that the tennis ‘star’ has been taking, for health reasons on the advice of her family doctor, since 2006, a drug which she knew as ‘mildronate’ and is also known as ‘meldonium’, which, because of its performance-enhancing properties, was recently added by the World Anti-Doping Agency to its list of banned substances. She claims that she neither knew this other name for the drug, nor that it was on the banned list.
If Sharapova took the banned substance deliberately, as a first ‘offender’ she would face an automatic four-year ban from competition; whereas, if she took the drug unintentionally and without, as she claims, knowing that it was a banned substance, she could receive a lesser ban of two years. Other mitigating circumstances could also be taken into consideration in perhaps reducing her punishment further. A lengthy ban, of course, could end the sporting career of the twenty-eight year old tennis player.
Sharapova has an extensive range of sponsors and these include such well-known international companies as Evian, Avon, Head, and American Express. Already, the Swiss watch manufacturer, Tag Heuer, has announced that it will not be renewing her endorsement contract which expired on 31 December, 2015. Also, the luxury car maker, Porche, has suspended her as one of its ‘ambassadors’ until her situation becomes clearer, which, it is submitted, is a more sensible approach to take in the circumstances. Nike has also suspended its relationship with her for the time being.
In such situations where a sports ‘star’ falls from grace because of doping or the commission of other disciplinary ‘offences’ - for example, bringing their sport into disrepute (whatever that might mean in the absence of a precise definition!) - sponsors may be able to rely on so-called ‘morality clauses’ included in their sponsorship and endorsement contracts enabling them to expressly terminate them. Otherwise sponsors may have to invoke termination under the general principles of contract law on the ground of ‘fundamental’ breach of their contracts. However, what is or is not a serious breach, entitling termination for cause, may not be so clear, depending upon the circumstances of each particular case. Clearly, it is better to include and rely on an express ‘morality clause’ in the contract.
Morality clauses are notoriously difficult to draft, in practice, being a mixture of morals, ethics and law, and precision, therefore, is the name of the game rather than relying on vague concepts of disrepute and moral behaviour.
Even in cases of well-drafted and well defined ‘morality clauses’, it may be prudent not to act too hastily until the actual position of the sports ‘star’ becomes clear. This may be a difficult call for sponsors to make according to the particular circumstances of each case.
For more information on the drafting and enforcement of ‘morality clauses’ in sports sponsorship and endorsement contracts, see ‘Money morality and megastars’ by J Tyrone Marcus in Global Sports Law and Taxation Reports, June 2013, at pp. 37-40 (both inclusive).