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Fair value for celebrity endorsements: competing interpretations

You know a guy has a lot of clout when he can obtain trademark protection for a number when it is used in connection with a restaurant or bar anywhere in the country.

If you're told, though, that the number is 23 and that said holder of trademark rights is one Michael Jordan, it really doesn't seem that surprising, does it?

After all, Jordan looms large in public life and has been a front-and-center celebrity superstar since he first walked into a professional basketball arena and quickly became anointed as the greatest player ever. Since he retired, it's hard to avoid seeing his face on television and in magazines touting products made by Nike, Gatorade, Upper Deck, Hanes and other companies.

Jordan unsurprisingly gets paid a lot for those endorsements (reportedly, more than 500 million dollars in the past decade), and a recent court case is now spotlighting an interesting issue regarding his iconic status and worth.

That issue is this: What is the fair market value for use of Jordan's identity in a commercial context? In other words, how much should he be paid for endorsing a product if an amount was not clearly established through contractual negotiations?

Jordan's legal team is currently in court in a case where it has already been established that a user of his identity didn't receive prior approval for featuring him in an ad to sell a product.

The focus now centers on what competing experts contend Jordan should be paid for that unauthorized use.

And that's a big deal. Jordan's camp argues that precedent -- based on what other companies have paid him, and what other persons similarly situated have been paid for a similar use of their identities -- should be the measuring yardstick for his endorsement. The value of a Jordan endorsement pegged to that analysis has been estimated at a minimum of $10 million.

Conversely, an expert testifying on behalf of the defendant in the case says that personal appearance fees should determine the ballpark figure for an endorsement amount. Those are much lower than stated full endorsement values.

The matter is currently being worked out. The case is undeniably interesting for its focus on the worth of a personal identity used to endorse a product or service when that value is not already determined.

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