Moral hazard clauses are likely to become standard in sponsor, sporting body or club contracts to deal with player's off-field behaviour, Allens Arthur Robinson partner David Yates said on Thursday.
Yates, an expert in sports law, said neither sponsors nor sporting bodies are prepared to continue weathering the increasing negative publicity brought by off-field behaviour.
"Sponsors are saying they want their teams being covered on the back page of the paper rather than having players splashed across the front page for their latest indiscretion. And, in a tough financial climate, sporting bodies are no longer willing to risk millions of dollars in sponsorship because of bad publicity," he said.
For sponsorship agreements, the clause could allow financial support to be immediately withdrawn if a club was embroiled in a big scandal, while clubs could terminate a player's agreement, said Yates.
"For the sponsor it protects its brand and reputation. But, for a sporting club, it can offer them a way to read the 'riot act' to misbehaving players and, therefore, act more effectively to keep them in line," he said.
Yates would not comment when Lawyers Weekly enquired whether there had been an increased request from clients to include moral clauses in the wake of the recent scandal involving group sex allegations against Matthew Johns and the Cronulla Sharks which were aired on Four Corners.
Yates said the explosion in new technology, camera phones and blogs meant that sports players were under intense scrutiny, with the slightest indiscretion possibly ending up in the media.
"Ultimately, it may not be the actions of sports star, but the amount of negative publicity those actions generate that lead a party to consider invoking a moral hazard clause," he said.