The Rio Olympics was a seventeen day celebration of athletic excellence. Competitors from around the world showcased their amazing talents on the track, in the pool and on the pitch in a colorful and spirited fashion. The time, effort and sacrifice the Olympians put in to make it to Rio was clearly on display, and a major part of the Olympic journey that was chronicled during the games.

The performances of Michael Phelps, Katie Ledecky and Usain Bolt captivated the minds and emotions of event attendees and TV viewers across the world, and garnered those athletes more than just medals: their achievements will undoubtedly lead to enormous corporate endorsement from leading brands like Gatorade, Speedo and Under Armour, just to name a few. Sponsor brands love the affiliation with sporting achievement, and will pay millions of dollars annually to associate with athletes like Bolt, whose endorsement portfolio already grosses some $30M annually.

With all of the success that comes along with the Olympics, there always seems to be some controversy that clouds the games. In Rio, it came in the form of athletes from the U.S. Swim Team, whose poor judgement (and subsequent encounters with Rio authorities) became a much bigger story than the games being contested. The fundamental values of honesty and integrity were not on display from the American athletes involved in the incident, and their poor judgement cost some their reputation and others their large corporate sponsors.

Morals clauses in most personal service agreements with corporate partners are present for this very situation, and designed to protect brands from athletes’ poor decisions. In this case, the athletes’ lack of overall good judgement put them in a situation where they will now have to work hard to repair their reputations while forfeiting potentially significant future earnings potential.

This unfortunate situation certainly put a damper on the conclusion of the U.S. contingent’s participation in Rio. However, it serves as a valuable reminder to athletes around the globe that exercising bad judgement off the playing field (or out of the pool) has very real and public consequences.

#####