Just Don't Do It: Reebok Terminates Endorsement Contract with DeAngelo Hall

Bill McCann alerts me to an interesting story in the Boston Herald concerning Reebok's decision to sever its endorsement contract with Atlanta Falcons cornerback DeAngelo Hall, after Hall played in last week's Monday Night Football game wearing Nike shoes. (Jennifer Heldt Powell, "Reebok Clips Falcon's Wings," Boston Herald, 10/27/2005).

I can easily understand Reebok's disgust. For one of its own clients to wear a competitor's product on a nationally-televised game is both embarrassing and disdainful, and would likely draw the ire of any rational person. This is particularly true considering that Hall could have simply concealed the Nike "swoosh" with an adhesive label-- assuming, of course, Hall absolutely had to wear those shoes, which is itself a rather ridiculous proposition for a well-compensated endorser of a competing product. For these reasons, and assuming there are no peculiar clauses within the endorsement contract, Reebok appears well within its contractual rights to terminate the contract.

Aside from termination of the contract, it will be interesting to see if Hall violated any penalty clauses that might compel him to return previous contractual payments. Given the egregiousness of his actions, there exists a distinct possibility that he violated multiple clauses, which can trigger severe penalties (including retroactive penalties).

More broadly speaking, Reebok's decision should deter other endorsed athletes who contemplate reckless use of their wardrobe. Such a message of deterrence would seem especially meaningful if Hall were required to return previous payments.

But then again, I wonder who Nike will now hire as a product endorser?

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