Treating Professional Athletes Like Wall Street Executives: The Potential for Clawback Provisions in Sports Contracts
Volume 87, No. 2, Winter 2015
By Bradley R. Smith, J.D. Candidate, Temple University Beasley School of Law, 2015 [PDF]

Anyone who pays even casual attention to sports or entertainment media is aware that athletes frequently find themselves in scandal. Many of these athletes possess lucrative endorsement deals from which they may be dropped as a result of their disreputable actions. But what remedies are there for the companies that invested substantial amounts of money in these athletes’ likable images, only to have the athletes squander that goodwill? By virtue of morals clauses that are a standard portion of endorsement contracts for athletes, the companies often exercise the option to drop the athlete from the deal. Beyond that, these companies are left with brands associated with a publicly disfavored athlete. Analogous immoral (or even illegal) behavior committed by Wall Street executives in the course of business is often dealt with contractually through “clawback” provisions. Clawback provisions generally provide stipulated damages when executives profit off of trades that they made by virtue of illegal or unethical trading practices. This Comment explores the potential for similar clawback provisions to be implemented into the morals clauses of athletic endorsement deals and college coaching contracts.