Here Justin M. Jacobson highlights several important clauses which artists should take note of when entering into brand sponsorship agreements, using three different examples to illustrate the terms and language used.
Guest post by Justin M. Jacobson, Esq from the TuneCore Blog
This is the second installment in a two-part series. Read PART 1 here.
In addition to the considerations we addressed in part one of this piece, there are some other clauses an artist should be aware of and include in a sponsorship agreement. We will now briefly explore some of those matters below.
A company may aim to include non-competition provisions in an effort to prevent the artist from working with a competitor for a specified period of time after the expiration or termination of their sponsorship agreement. Such example language is displayed below.
Another important matter that should be addressed and memorialized in a written agreement are the brand’s right to utilize the celebrity’s image and name in association with its product. This includes during the sponsorship term as well as how matters would proceed after the expiration of an existing endorsement.
Generally, a brand owner prefers for its rights to be wide with minimal requirements and restrictions on them; conversely, a musician typically wishes to maintain control over the use of his image and name, so an agreement on these points is important.
Below is an example of a clause providing a sponsoring brand with the right to utilize an artist’s name and image during the sponsorship and with the company’s right terminating upon the expiration of the term.
In addition to an influencer’s deliverables on behalf of a brand and the brand’s category exclusivity, provisions relating to the potential early termination of the agreement should also be negotiated. In particular, most sponsorship agreements have a “harmful behavior” or “morals clause.” This permits a brand to immediately terminate an existing endorsement arrangement with an individual who “engages in illegal, indecent, immoral, harmful or scandalous behavior or activities.”
Such a provision is often used to protect the image and reputation of the company; and enables one party to unilaterally terminate the contract if the other party engages in conduct that could have some type of negative impact upon the particular company or brand’s public reputation. In addition, many celebrities are now negotiating “reverse morals clause.” These clauses provide the musician with the right to terminate a sponsorship agreement if the brand behaves in similarly brand “damaging” way. This is meant to protect the musician’s reputation from association with a disgraced company or brand. A sample of such a clause is depicted below.
As we have discussed, there are many important matters related to a brand’s sponsorship of a musician. These include the particular “deliverables” or obligations that the musician owes to the brand as well as the compensation due to the artist for performing its duties on behalf of the sponsor. Category exclusivity and non-compete provision scopes are also important issues to be aware of.
It is clear that as the music industry continues to shift toward a greater reliance and larger portion of an artist’s income will be generated from brand affiliations. This makes it more pressing to properly agree on the terms of these relationships. Memorializing the sponsorship terms in writing is the best way to ensure all parties are on the same page and receive the protections that they desire.
This article is not intended as legal advice, as an attorney specializing in the field should be consulted. Some of the clauses have been condensed and/or edited for content purposes, so none of these clauses should be used verbatim nor do they act as any form of legal advice or counseling.