Winning: The Secret to Charlie Sheen’s Unique Contractual Advantage

By Clarke Rosenthal

Just when you thought Charlie Sheen could not possibly contribute more tabloid fodder to the cultural landscape, he is back in the public eye with his latest legal dispute.  Despite the fact that Warner Bros. fired Sheen from the hit sitcom Two and a Half Men last March and settled Sheen’s subsequent $100 million wrongful termination lawsuit in September, the parties have not, at least legally, seen the last of one another.  This month, lawyers for the Two and a Half Men studio, sent a cease and desist letter to Sheen, the FX network, and production company Debmar-Mercury, demanding that they stop using Warner-owned photos in connection with Sheen’s upcoming comedy Anger Management.

At least two disputed photos were included in a promotional publication that Sheen and his new partners distributed at the National Association of Television Programming and Executives (NATPE) conference in Miami. These materials were intended to aid Sheen in pitching his new show to domestic and international buyers.  Though the two photos do not, in their content, appear to have any intrinsic or obvious link to Warner Bros, copyright infringement is still serious business.

Regardless of whether Sheen’s use of Warner’s intellectual property for his own commercial purposes was intentional or was simply an egregious oversight, he was ordered to cease and desist from using the photographs or any other Warner-owned property.  Sheen’s attorney, Marty Singer claims that the use of the photos was inadvertent and that it will not happen again.

While this latest debacle is just one in over a year’s worth of legal troubles for Sheen, a slew of which were quite unusual and scandalous to say the least, the greater implications of these legal maneuvers begs examination.  It is no secret that as Charlie Sheen went further and further off the deep end in the past year, his fame and notoriety grew.  Certainly this is not the first time a public figure has garnered media attention for his or her outrageous behavior, but what is rather unique about Sheen’s situation is that his misconduct has actually snagged him endorsement deals that may not come with the traditional kinds of moral clauses that other celebrities in his position would be saddled with.

Moral clauses, which emerged in the 1920s, are typically used by brands in order to ensure that their products are safeguarded against the negative effects of their celebrity endorser’s bad behavior.  A morals clause gives the endorsing brand a contractual right to terminate the deal in the event that the celebrity engages in certain unsavory behavior.  However, Charlie Sheen, the undisputed king of unsavory behavior, may be exempt from such clauses based on the fact that the endorsement deals he has recently obtained, particularly for Fiat and DirecTV, depend on and exploit his notorious reputation within in the content of their advertisements.  So while traditional morals clauses were inserted into contracts to allow contractual cancelation if the celebrity endorser engaged in behavior that did not align with the company’s expectations of said celebrity, these particular advertising campaigns are relying on Sheen’s “misconduct” to market their products.  Because Fiat and DirecTV are hoping to use Sheen’s bad boy image as leverage to market their products, a morals clause would undercut their campaign by vilifying the kind of behavior that they are trying to use to their advantage.

Earning those new endorsement deals.

So while Charlie Sheen is certainly not the first celebrity to capitalize on the public’s fascination with his debauched lifestyle, he might be one of the first to parlay his infamy into some advantageous contractual positions—particularly his exemption from a morals clause, the existence of which would have undoubtedly gotten him into trouble in the past.  And while the negative effects of his behavior should not be discounted, it will be interesting to see how these legal precedents will play out in the future with other celebrities.

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About Alex OP

Blog Editor for Arther Law's Industry Insider 3L at Brooklyn Law School

One response to “Winning: The Secret to Charlie Sheen’s Unique Contractual Advantage”

  1. Alex O'Sullivan-Pierce, Blog Editor says :

    Thank you to Clarke Rosenthal, 1L at Pace University Law School for his contribution to Arther Law’s Industry Insider. It’s a fun read with some excellent points. Winning!

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