Brands and artists: A legal guide to relationships

by Ailish McKenna

WHAT RESTRICTIONS CAN BRANDS REASONABLY IMPOSE ON ARTISTS?

The word “partnership” can be used to describe a whole range of relationships in varying settings. In the area of brand endorsements, the word is commonly used to define the nature of the relationship between the brand and the artist chosen to endorse certain goods and services under that brand.

Both parties entering into a media partnership have their own interests to serve. The hope and the intention is of course that a mutually beneficial and fruitful alliance will unfold. To achieve that result, there needs to be a careful balance of rights and obligations in the media partnership agreement.

Usually, the first stage of the collaboration will include the negotiation of the terms that govern the relationship and the putting in place of a contract which incorporates those terms. Everyone wants to keep contract negotiations to a minimum. A well thought-out contract which captures the needs of the brand, without overreaching, simplifies the contractual process and helps the brand to achieve its objectives. If the terms are too onerous, an artist can be left feeling hard done by before the partnership has even truly begun. An artist can even be scared off if the brand is seen to be demanding too much.  Taking a reasonable approach when setting the parameters within which the parties are expected to conduct themselves should pave the way for a fair balance and expedite the signing of the contract.

Some examples of areas which often lead to protracted discussions and complications, which can be avoided, are set out below:-

• The length and breadth of the arrangement is of course key. The “rights package” required by the brand needs to be clearly identified and should be shared with the artist in full upfront. The rights package comprises the services which the artist is required to undertake, the usage and exploitation rights that the brand requires, where and how those rights can be exercised and for how long. Along with financials, the rights package is the most fundamental aspect of the contract. Before the commencement of negotiations with an artist, the rights package should be thoroughly researched internally, so that the rights actually needed are precisely identified and only those rights are put to the artist. An exhaustive list of rights with reasonable limitations (e.g. time limits) offers more transparency and shows good faith, compared with the “kitchen sink” approach.

• In a commercial arrangement, it is of course reasonable for a brand to seek to impose restrictions such as exclusivity provisions on the artist. However, unless these provisions are reasonable in terms of sector, duration and area, they will not be welcomed and can be problematic – sometimes even unenforceable. The artist’s representatives will carefully consider whether the brand is paying enough to take the artist out of the relevant market altogether for the life of the campaign.

• “Good behaviour” clauses are often controversial. Every brand needs to protect the reputation of their goods or services which will have taken considerable time and resources to build.  As a chosen ambassador for the brand, understandably there is an expectation that the Artist will uphold, and not tarnish, the reputation of the relevant goods or services. “Good behaviour” restrictions can therefore be expected, but within reason. Balanced against the brand’s need for protection, is the reality of the world in which today’s celebrities live. The artist is bound to have an immense public profile which involves a huge amount of day to day publicity and scrutiny of the artist’s every act.

It is reasonable to impose penalties for a situation where an artist intentionally does something in public during the life of the campaign which has a direct and serious negative impact on the brand. The criteria for deciding whether an artist has behaved “inappropriately” is then not wholly subjective.   However if the legal framework exposes the artist to being sued over behaviour which not everybody would consider damaging, the artist may find themselves questioning whether the partnership is in fact “worth it”. There is therefore a careful balancing act to be undertaken when drafting “good behaviour” clauses. A brand also needs to consider whether the act of suing an artist would create even more publicity and draw attention to the very issue that the brand would prefer to be buried. So an appropriate remedy for intentional wrongdoing by the artist would be termination of the agreement and, possibly, reimbursement of part of the fees depending on what value the brand has received prior to the termination.

No-one has a crystal ball to enable them to predict the headlines of the future, so the partnership will always be a leap of faith to some extent. However, there are also practical considerations which should offer brands some comfort outside the legal framework. Brands will select artists who want to work with them and contribute positively to their promotion. That is inherent in the arrangement. As well as the brand’s reputation, the artist will be keen to protect their own career and their own reputation both within the industry and publicly. It is not in the artist’s interest to jeopardise the reputation of their chosen media partner.

• An artist will be accustomed to being at the forefront of the creative process in all aspects of their career. When it comes to endorsement partnerships, an artist will expect to be treated in the same way. Whilst materials which go into the public domain are of course promoting and endorsing the brand, they are still using the artist’s image and public profile. Usually, the artist will want to contribute to the process by way of approvals over materials using the artist’s name, image or performance.  Whilst the artist does deserve some input, it would not be fair for the Brand to be put in a position where they are left high and dry with no campaign materials because of a stalemate over approvals. Again, a fair balance needs to be struck when drafting and agreeing the approval process. A practical solution is for the contract to offer reasonable approvals to the artist (which can include short turnaround times for example).

• Brands are well advised to conduct sufficient due diligence when collating the rights package. The artist will usually have other contractual commitments, restrictions and obligations already in place which will need to be taken account of. Often, a third party partner such as the artist’s record company and/or publisher will need to be approached for permission alongside negotiations with the artist, depending on the nature of the rights being granted to the Brand.  Those third party rights need to be either addressed at the outset or carved out from the contract between the brand and the artist.

In our experience, on the whole endorsement partnerships can be very successful for both parties. The contract documenting the arrangement is, of course, a necessary evil.  But, the process can be expedited and simplified if a pragmatic approach is taken from the beginning. An onerous legal contract may offer a high level of protection for the brand in one sense, but a more balanced approach will shorten the negotiations and help to nurture a long-lasting and healthy partnership.

Ailish McKenna is from Bray & Krais is a niche entertainment law firm, specialising in live events, music, theatre and production.

http://blog.creamglobal.com/right_brain_left_brain/2011/08/brands-and-artists-a-legal-guide-to-relationships.html