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Brian R. Socolow, co-chair of Loeb & Loeb’s Sports practice, discusses how the sports world is capitalizing on the health and wellness industry’s explosive growth and the legal issues that arise.
Athletes are a natural fit for health and wellness brands, but product endorsement deals must be carefully vetted. Brian looks at evolving regulatory oversight in the absence of a standardized definition of health and wellness, the legal challenges of building and protecting relationships between athletes and brands, and helping college athletes, who are now allowed to profit from their name, image and likeness (NIL), navigate this new frontier.
Tell us about how health and wellness trends intersect with your Sports practice.
Health and wellness are an important part of recreational, college and professional sports. Teams and brands are all focused on health and wellness for athletes of all ability levels. Brands are capitalizing on consumer interest in mental health awareness, nutritional products, and performance data and analytics, for example, all of which are already part of the sports ecosystem for all professional athletes.
So there are tremendous opportunities for both the sports and health and wellness industries. They also face similar legal challenges, such as brand protection issues. Athletes themselves are brands and need to be focused on growing and protecting their brands just like consumer or other companies do. We are also seeing increasing regulatory focus on advertising claims made about certain products as well as issues around monetizing intellectual property.
No standard definition of health and wellness, in regulatory terms, currently exists. Is there any consensus as to what the phrase means?
Not yet. The health and wellness category can still mean different things to different people. A wide variety of consumer-facing products and services promote themselves as being in the health and wellness industry. Ultimately, I expect the marketplace to determine what’s considered health and wellness. Regulators also will, to a certain extent, define health and wellness going forward. So I think we will see a lot more changes before there is clarity on what the health and wellness market is.
How are you helping athletes protect their brands in health and wellness endorsements?
We tell athletes that they have to understand and believe in the products and services they endorse and, in most cases, personally use them. Authenticity is critical. Without that, athletes are just cashing a paycheck and likely not enhancing their brand. So, for example, an athlete could be promoting a mental health app or a sleep app because they actually use it and it works for them.
On the brand side, what kinds of legal or practical issues are you seeing in terms of making relationships with athletes work?
Health and wellness brands are very similar to other brands. The brand wants to know who the athlete is, what the athlete stands for and whether the athlete is the right fit for the brand. The brand wants to know if the athlete can help it effectively grow its health and wellness position.
Are professional teams and leagues partnering with health and wellness brands?
Absolutely. Health and wellness is an entirely new category of products that can produce a new revenue stream for leagues and teams. The sleep app category, for example, didn’t exist until recently. Neither did the massage gun category. These weren’t products consumers thought about owning and using, and now perhaps they do because of the innovations in health and wellness and in technology and data. As the health and wellness consumer market grows, teams and leagues inevitably are looking at new product categories and want to capture new revenue streams.
Are health and wellness brands connecting with college athletes now that they can use their NIL for endorsements?
There’s a big push into the college athlete space. Many college athletes are devotees of new health and wellness products and services, and some can be highly effective endorsers because of their authentic connection to those products and services.
What do you advise college athletes who want to work with health and wellness brands?
First, college athletes need to be aware of any potential conflicts between the brands their university athletic department or teams contract with and their personal brand. They must also understand that they cannot make any claims that would be misleading or otherwise violate, for example, Federal Trade Commission (FTC) regulations. Brands also want to make sure that athletes don’t knowingly or unknowingly make claims that will create problems for the brand or the athlete.
Many college athletes are themselves brands, and some have been building their brands since they were in high school. The last thing they want as they’re growing their brand, doing well in their sport and obtaining new endorsements is to be the subject of an FTC or a Food and Drug Administration inquiry. So we counsel a prudent approach to endorsements. If something is untested or the claims about a product or service are uncertain, we advise staying away from an endorsement.
How is Loeb a leader in the sports and health and wellness space?
We have extensive experience working with athletes, teams and brands, and we are using that experience in the health and wellness space. We’re well positioned to help our clients enter into or extend their presence in health and wellness.
