Sanga has not breached the contract he signed with Hutch or its ad agency. The contact expires and a cleverer agency negotiates a deal that discriminated the old brand he was representing. It may be unethical on Sanga’s part (I didn’t think sleeping with the enemy was that easy); but it is definitely not illegal. I’m sure he must have asked for a huge lump sum to say what he says about the old brand.
It is the agency’s responsibility to negotiate fees with celebrities – and they draft the contracts – usually with a certain amount of exclusivity to protect the brands. Ideally, the exclusivity prevents the celebrity from endorsing the competition a for couple of years, even after the expiry of the contract. There is a silly mistake agencies tend to make while negotiating: they tend to encourage less exclusivity so that they could pay the celebrity much less than they’d demand. More conditions cost more money, so they think it is best to stick to a basic agreement that doesn’t cover much, and cost much.
Agencies think that they are doing a great big favour to the client by offering a celebrity for an ‘affordable’ price-tag. Think cheap and act cheap – and it is sure to cheapen the brand in the long run.
Ad agencies should learn to pay the celebrities what they are worth. It is the agency’s sole responsibility to protect the brand with an air-tight contract, they should not also forget that the more money they pay the celebrity, the more commission they are going to make.
Our agencies should learn more on how to handle the models and brand ambassadors. They need to learn how to draw model releases and exclusive contracts. This is not the first time a celebrity takes a brand for a ride; the agencies are the brand guardians – they must know how to protect their brands.
Hutch is paying the price today for some account manager’s stupidity and short-sightedness, while the fans blame Sangakkara for for being unethical in business.
I’d say it’s the ad agency that’s to be blamed for this mess and if I were Hutch, I would fire the agency, on the spot.