Kishner Discusses Potential Liability for Athlete Brand Endorsement

November 18, 2022 – Media Mention

Co-chair of Herrick's Sports Law GroupIrwin Kishner, spoke to Law360 regarding the potential class action against FTX, its founder and the potential liability for athlete and celebrity endorsers. 

"Legal history and the nature of the FTX case makes it more likely that the athletes won't be the long-term targets of the class action," said Kishner. "The audience for commercials like the ones in question - and, in this case, the investor in the product being sold - knows what celebrity endorsers do." 

"Shaquille O'Neal, for example, might endorse Budweiser beer, and I drank it and it make me sick," Kishner said. "Is Shaquille O'Neal liable it was going to be good beer and I got sick." Kishner further notes that "[t]hey are paid endorsers for the product and in the case of FTX, the product was the crypto platform- the endorsers don't appear to be giving investment advice." 

"The reason you do these kinds of advertising is to build brand awareness. I don't think it rises to the level of proximate cause or to cause of liability," Kishner said. The article further notes that well-compensated endorsers are often indemnified by the companies to protect them from liability. 

In addition, the proposed class that filed the action will need to demonstrate commonality in enough areas to be certified. Then, even if certified, to obtain relief the lawsuit would have to result in there being a culpable entity. According to Kishner, that is likely not the athlete. "If I did a commercial, and you know I'm a paid endorser, is that enough? I don't think so. Now, if Tom Brady calls me up and says 'I put up $10,000, you should, too,' is that a different level of involvement?"

Read the full article in Law360 here. Access may require a subscription.