The unique marketing strategy at the heart of a lawsuit involving a luxury underwear company and former New York Yankees’ shortstop Derek Jeter offered a “cautionary tale” about the dangers of mixing roles in a corporate governance setting, the Court of Chancery noted last week.
According to court papers, RevolutionWear Inc. brought the 14-time All Star into the company in 2011 under what it calls a “reverse endorsement” concept. Instead of paying Jeter to appear in traditional advertisements, RevolutionWear made him a co-owner, director and “founder.” The company thought that would speak volumes about its Frigo brand of underwear, which it markets for up to $100 a pair. But, to make the strategy work, the company needed public statements from its famous spokesman touting his new roles.
