Sarah Liddiard, a senior associate in the corporate and commercial team at law firm Debenhams Ottaway, highlights the key points to include in a celebrity Collaboration Agreement.

 

Celebrity collaborations with retailers and brands are a growing trend. For example, Boots teamed up with Fearne Cotton to create a line of bright, colourful childrenswear. Such collaborations can seem a natural choice for a childrenswear brand or retailer, particularly where brand values are seen to align with the celebrity. While some celebrities may be happy to simply endorse a finished product line, others may wish to actively participate in the concept, design and promotion of a collection, so it’s important to ensure that both parties understand their obligations and the terms of any agreement.

Key Terms of the Project

In regard to early negotiation with the celebrity (or more likely, their agent), you will need to consider the following terms, which should then be set out fully in the Collaboration Agreement.

Project Plan

If the intention is that the celebrity will do more than simply endorse the clothing collection, you will need to consider how many hours/days are required for the celebrity to work with you. Create a timetable setting out the level of involvement, usually working backwards from the proposed launch date and mapping out how much involvement is expected at the various stages from design through to promotion of the collection. As a point of negotiation, the celebrity is likely to have several other projects going on simultaneously and will not be able to commit on an exclusive basis.

Term

How long should this project last for? Will the collaboration be for one season only or a longer period? The negotiations may limit the initial collaboration to one collection. Depending on its success, you may then be prepared to offer another opportunity during the following season. Appropriate termination provisions should be included to allow early termination if the initial collection does not perform as well as projected.

Payment Terms

It is usual to negotiate a fee and then pay a proportion of it as an advance on the execution of the Collaboration Agreement and then allow for further payments to be made at key points in the project, such as completion of the design stage, the start of manufacturing, and at the launch of the collection. There may be additional payments for time spent promoting the collection and for publicity and photoshoots. This will be a key part of the initial negotiations. Much will depend on the celebrity and if they have already taken part in collaborations before or have any relevant clothing/retail experience, so consider where to set your budget ahead of initial negotiations and be aware of travel and additional expenses that may need to be met at the launch of the collection.

Intellectual Property Rights

Any design rights in the clothing, patterns or prints designed, as well as any copyright or other intellectual property rights (IPRs) which arise during the project, should be assigned to your company/business. Additionally, you will need to obtain a limited licence to use the celebrity’s name and likeness in connection with the collection. The IPR provisions will also need to extend to allow you to continue to sell off any unsold stock for a brief period following termination of the Collaboration Agreement.

Termination

The Collaboration Agreement will set out the termination date when the contract will come to an end. However, it is prudent to include terms to allow for early immediate termination due to certain events, including if the celebrity’s conduct damages or could damage your brand and reputation. Be clear from the start as to what your expectations are around the celebrity’s conduct considering your position as a childrenswear manufacturer or retailer, and the fact that any adverse publicity surrounding the celebrity will require you to act quickly and may result in early termination of the Collaboration Agreement if any past or present conduct is likely to bring you into disrepute.

Warranties

The Collaboration Agreement should also contain warranties for the celebrity to agree to, such as them warranting that they have the freedom to legally enter into the Collaboration Agreement and that this won’t conflict with any other contractual obligations they may already have in place. Likewise, the agreement will set out your obligations, which are likely to include the obligation to meet all promotional costs for the product range and an obligation not to make any statements about the celebrity without their prior written consent.

While a celebrity collaboration can be a brilliant way for a business to boost revenue and attract more customers, failure to discuss, negotiate and agree to each party’s rights and obligations for the project can lead to delay, wasted time and expenditure or even legal disputes. Therefore, it is well worth spending the time in planning your collaboration and seeking the appropriate technical and professional advice at the start to ensure your celebrity collaboration is a success for all involved.