January 21, 2010
Tiger Woods' Amicable Separation -- From His Sponsors
We have posted before about rumors that Tiger Woods is negotiating with his wife so that she will stay in the marriage. Well, it seems that he has chosen not to take the same approach with his corporate sponsors. The New York Times reports that AT&T severed ties with the world's best golfer without paying him fees still owed under the parties' agreement, and it did not have to go to court in order to do so. Although nobody wants to talk on the record, the Times story prints off-the-record conversations with people in the know who claim that the agency that represents Tiger Woods let the corporate sponsors out of the contracts in order to preserve its good relations with those corporations.
Ordinarily, a sponsor would protect itself and leave itself a contractual out through a morals clause that would permit it to sever the relationship if the celebrity spokesperson for the product turned out to be unsuitable. The Times report suggests that Woods might have had sufficient bargaining power so as to eliminate the morals clause or to insist on one with very limited applicability. Nonetheless, the Times also points out that Woods likely would not want to have his conduct further scrutinized and subject to public inquiry. In these circumstances, it may have been best for all involved to simply part company.
But the report also raises troubling issues about an agency that might have to balance its relationship with sponsors against the interests of its clients. The best interests of the agency will not always coincide with the best interests of the agency's client.
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