Superstar faces massive cash penalty as sponsors weigh up deals
The allegations against Cristiano Ronaldo could prove expensive for him — and for other public figures with similar deals, writes Jeremy Wilson
CRISTIANO Ronaldo is facing the prospect of multimillion-euro claims from sponsors if the rape allegation against him is proven, according to a leading sports lawyer.
Simon Leaf, who specialises in commercial contracts for Mishcon de Reya, also believes that other sports stars and celebrities will be looking carefully at the legal precedent in relation to Kathryn Mayorga’s attempt to void a reported US$375,000 (€325,000) non-disclosure agreement that she alleges to have been coerced into signing.
Mayorga has accused Ronaldo of raping her in a Las Vegas hotel penthouse suite in June 2009. Ronaldo, who scored for Juventus yesterday’ in their Serie A match against Udinese, has denied the accusation, saying “rape is an abominable crime that goes against everything that I am and believe in”. He added that “my clear conscience will thereby allow me to await with tranquillity the results of any and all investigations”.
There was some surprise this weekend among industry experts at the decision by two of Ronaldo’s highest-profile sponsors — Nike and EA Sports — to issue public statements. Nike said that it was “deeply concerned” by “disturbing” allegations that it would monitor closely. EA Sport also described the situation as “concerning”.
Two other main sponsors, Herbalife and American Tourister, have not commented.
Forbes has estimated that Ronaldo’s social media presence, which includes 142.9m Instagram followers, generates some €152m for his sponsors. He also has an extensive line of branded “CR7” products, including Pestana hotels and his own museum, the Museu CR7, and is rated by Forbes in the top 10 celebrity earners in the world.
He is one of only three athletes to have a lifetime contract with Nike, which has been valued at €870m, and Leaf is certain that all his major sponsors will be now checking the detail of their contracts. “This is likely to include not only their rights to terminate or suspend the relationship if the allegations prove to be accurate, but also whether they may be able to recover past fees paid to him,” said Leaf. “I’d be surprised if in a chunky contract agreement, that we regularly advise on, there wasn’t some kind of representation that there were no issues that Ronaldo was aware of that may cause an issue for the brand he works with.
“This is one of the most heavily negotiated issues when it comes to a deal of this nature. At this stage, it is just an allegation. I’ve seen some contracts where, if there is even the hint of an allegation, brands will suspend the relationship and possibly terminate. A lot of it comes down to the power of the parties. You would think someone like Ronaldo would be in quite a strong bargaining position where he negotiates his contracts.”
There are few precedents for an athlete being forced to pay back commercial income, although Lance Armstrong did this year reach a $5m settlement with the US government, which had sponsored his US Postal cycling team.
Nike waited until October 2012 — almost two months after doping revelations about Armstrong were substantiated by the US Anti-Doping Agency — before terminating its contract with the American. The decision, then, to comment on allegations which Ronaldo so vehemently rejects was not widely expected.
“I am slightly surprised by Nike,” said Nigel Currie, a sports marketing consultant. “When different allegations were being made about other athletes, they held on for much longer. It is significant for them to have issued a statement. They are clearly concerned. I think it shows the impact of social media. They can judge the way things are going much more from a public point of view.”
Leaf says that other prominent figures will be watching closely to see how the issue of Mayorga’s non-disclosure agreement is decided. “Others have sought to rely on these non-disclosure agreements in the past,” he said.
“Generally, the advisers might say, ‘Don’t worry, they’ve signed an NDA,’ but, given this is being challenged, there is a growing call to curtail the use of the NDA and not use them in situations where there are allegations of sexual misconduct or other attempts to cover up whistle-blowing. You’ve got a written contract, but also principles that you can’t prevent reporting of an alleged crime.”
Juventus coach Massimiliano Allegri was confident that a player whom his club signed this summer for €100m was ready for yesterday’s match — and Ronaldo’s first-half goal against Udinese proved him right.
“I’ve known Cristiano for three months now and during his career he has been a great professional on and off the pitch — he is ready to return to action,” said Allegri.
‘Someone like Ronaldo would be in a strong bargaining position’