Justin Bieber has emerged as a bona fide sports star, but in the most unlikely of sportstable tennis. At only 24 years old, Bieber has won 8 of the last 11 major table-tennis tournaments over the past 3 years, breaking virtually every table-tennis record in the process. Bieber is poised, articulate, good-looking and has a radiant smile, which (combined with his seeming invincibility) have prompted the inevitable comparisons to Tiger Woods. Bieber even has a signature move like Tiger's fist-pumpwhen Bieber serves an ace, he spins and balances his paddle on his nose like a circus seal with a ball. With his good looks, new-found wealth, instant success and youthful indiscretions, almost every week the tabloid magazines (like Us and People) dish up stories about Bieber's fast cars, hard partying and revolving door of young starlet girlfriends.

Bieber's meteoric rise to the top of the table-tennis world, and the resulting media frenzy, has made Bieber a household name. This has caught the attention of Acme Sports Inc. (Acme). Acme is a leading manufacturer of indoor sports equipment (billiards, darts, foosball, table tennis, etc.). Acme would like to launch a new line of table-tennis paddles endorsed by Bieber and branded with Bieber's name and likeness. In exchange, Acme would pay Bieber 5% of the product line's sales.

An Overview of the Relationship

This is an endorsement contract. Some endorsement relationships merely involve the celebrity saying nice things about the product, but this relationship is more complex because Bieber's name and likeness will incorporated into the product.

The integration of Bieber's brand into the product creates some risks for both parties. From Acme's perspective, Acme will incur some start-up expenses to manufacture and market the product. If the relationship sours, Bieber's brand becomes worthless, or Acme loses its rights, then (a) Acme's stream of cash flows may be prematurely interrupted, undercutting its investment decisions, and (b) Acme may be stuck with a warehouse of goods (and perhaps some manufacturing equipment) that it can't use.

From Bieber's perspective, he "owns" his brand, which is basically a set of consumer psychological perceptions. By letting Acme use his brand, he is giving up some control about how consumers perceive him. If Acme denigrates these perceptions, Bieber's brand becomes less valuable in all respects.

In theory, shared interest in Bieber's brand and associated revenue share should align parties' interests. Because both parties will make more money as product succeeds, both parties have incentives to make that happen. For now, consider that Acme might find product line unprofitable even if it makes significant sales, so Acme might want to kill product line even though Bieber is earning substantial royalties. Alternatively, Bieber may have non-monetary considerations that trump his interest in relationship. For example, imagine Acme wants to distribute product through low-end retail chainsBigLots or dollar stores. Bieber might be concerned about impact on his reputation even if distribution channel might maximize profits.

From Bieber's Perspective

Bieber is the vendor in transaction. Typically, vendors care most about getting paid and defining what they are selling (so they don't unintentionally sell more than they are getting paid for).

From Acme's Perspective

Acme is the buyer in this transaction. In this case, they are procuring an asset (Bieber's brand) as part of assembling the assets required to launch a new business line (the Bieber branded products). Bieber's brand is only one component of a complex undertakingwhile it's a key component, Acme wants a good return on all of the assets it deploys in the business line.

Part 1A:

Assume you are Bieber's lawyer. Draft a list of the most important provisions (at least 7) you would advise him to include in a contract with Acme. You may not list a morals clause (see part 2 below) as one of your 7 items. Think of this as a checklist of the critical business issues from Bieber's perspectivewhat are the things Bieber cares most about? Be as specific as you can and support your answers. Please rank order your list (item 1 is most important, 2 next most important, etc.).There's no right or wrong way to write up this list, so feel free to use any format that you wish.

Part 1B:

Now, assume you are Acme's lawyer. Draft a list of its most important deal terms (at least 7) you would advise Acme to include in their contract with Bieber. You may not list a morals clause (see part 2 below) as one of your 7 items. Again, please be as specific as you can, support your answers, and rank order your list.