Sponsorship agreements constitute an essential — and often the primary — source of income for many elite athletes, clubs, and sports federations. Through such agreements, an athlete or club associates itself with a sponsor, who in turn promotes its brand through this partnership. In return, the athlete or club receives financial compensation or material support.
But what happens when an athlete or club finds themselves in the spotlight for the wrong reasons, bringing negative publicity to the sponsor? Sponsors increasingly seek to protect themselves through the inclusion of so-called morality clauses in their contracts.
Morality Clauses in Sponsorship Agreements
Morality clauses are contractual safeguards that grant sponsors the right to impose certain consequences if an athlete’s or club’s conduct is deemed inconsistent with the sponsor’s values.
A sponsor may, for instance, reserve the right to impose a fine, reduce sponsorship payments, or — in extreme cases — terminate the agreement altogether if the athlete or club becomes the subject of negative media coverage that could harm the sponsor’s reputation.
There is no shortage of real-world examples.
In 2009, Tiger Woods became embroiled in a sex scandal, prompting most of his sponsors (with the exception of Nike) to sever ties with him. In 2018, Neymar was accused of sexual assault by a Nike employee. When it became known that he had refused to cooperate with the internal investigation, Nike terminated its sponsorship agreement with the Brazilian star. During the 2021 UEFA European Championship, several players were seen removing Coca-Cola bottles from view at press conferences — despite Coca-Cola being one of the tournament’s main sponsors.
More recently, the balance of power between sponsors and sponsored parties has once again drawn attention. During the Vuelta a España in the summer of 2025, pro-Palestinian protests erupted, targeting the participation of the Israel–Premier Tech cycling team. Activists demanded the team’s exclusion due to the war in Gaza. Stage blockades led to shortened races, two undecided stages, and ultimately the premature termination of the event.
Shortly thereafter, the team’s main sponsor, Premier Tech, reportedly demanded a name change — a request that has since been implemented. Team founder Sylvan Adams, who had aimed to promote Israel through professional cycling, announced that he would step back from his role.
This raises an important legal question: how can a sponsor exert such influence over a team — to the extent of compelling a name change?
The answer lies precisely in morality clauses, which give sponsors wide contractual leverage to intervene when their reputation or values are at stake.
Power (back) to the Players?
While sponsors may be quick to dissociate themselves from controversial athletes, recent years have seen a growing trend towards greater tolerance and even alignment with athletes’ social or ethical activism.
Sponsors increasingly choose to embrace, rather than suppress, the personal messages of their athletes.
A striking example is Naomi Osaka, who used her platform during the 2022 season to highlight the Black Lives Matter movement, wearing the names of victims of police violence on her gear. Although not all her Japanese sponsors welcomed these outspoken gestures, many other Japanese and American brands publicly supported her stance.
A few years earlier, the climate was different. In 2017, Colin Kaepernick, a quarterback in the NFL, was effectively blacklisted from the league after kneeling during the national anthem to protest racial injustice. His sponsors quickly distanced themselves — except Nike, which signed him in 2018 and made him the face of its campaign.
This phenomenon of celebrity activism signaled a potential power shift within the world of sport, with athletes becoming increasingly selective and conscious in choosing their commercial partners.
Returning to the Coca-Cola incident during the 2021 European Championship: Portuguese football icon Cristiano Ronaldo deliberately removed Coca-Cola bottles from sight at a press conference, remarking, “Agua… not Coca-Cola.” The beverage giant’s market value reportedly dropped by 2–3% the following day. Known for his disciplined lifestyle and partnerships with brands such as Nike and Herbalife, Ronaldo made a clear statement — Coca-Cola did not align with his personal brand.
The immediate question arose: could Coca-Cola take contractual action?
The answer is nuanced — Ronaldo himself was not a direct contractual party to Coca-Cola, as the sponsorship agreement existed between the brand and the federation, not the individual players.
Or not?
To address this lack of direct contractual remedies, sports federations have increasingly begun to integrate non-sporting obligations into their selection criteria. These criteria determine which athletes or teams may represent the federation in international competitions and are typically set out in the federation’s regulations or policy documents.
A recent example is the case of Nafi Thiam v. the Belgian Athletics Federation.
Belgian athletes wishing to compete in the World Championships were required to sign a code of conduct. Thiam refused, as doing so would have forced her to accept provisions that restricted the rights of her private sponsors in favor of the federation’s sponsors — with whom she had no contractual relationship.
The issue arose because the federation’s sponsors (Asics and Allianz) directly conflicted with Thiam’s personal sponsors (Nike and AXA). Sponsorship contracts often include exclusivity and apparel clauses, placing Thiam in a difficult position: wearing apparel from a competitor could have triggered morality clauses or non-compete provisions in her own sponsorship agreements, exposing her to potential penalties or even termination.
Although the federation’s sponsors could not directly sanction Thiam, federations have sought to circumvent this by embedding such obligations within their selection criteria.
In doing so, athletes may be required to give priority to the federation’s sponsors over their own commercial partners — and refusal may lead to non-selection for major championships.
Such far-reaching, non-sporting selection conditions can arguably infringe upon athletes’ right to work in a disproportionate manner.
It is therefore crucial that athletes and clubs fully understand the obligations they assume towards their federations and sponsors. Proper legal advice is essential when drafting, reviewing, or negotiating sponsorship agreements or related regulatory commitments.
If you have questions about sponsorship agreements, morality clauses, or federation selection criteria, please contact our experienced PowerPlay team for tailored legal assistance.