On April 5, The Wall Street Journal reported that two major beverage brands – PepsiCo and Diageo – had both withdrawn their sponsorships of the Wireless Festival, a U.K. music festival, due to its headliner: Ye, the American rapper formerly known as Kanye West who has been embroiled in controversy after controversy in recent years.
Two days later, The New York Times reported that the British government had prohibited Ye from entering the nation due to his history of antisemitic remarks, among other scandals.
Given that Ye was the only performer on the lineup who had been announced at that point, Festival Republic, the concert promoter behind the music festival, said in a statement that it had chosen to cancel the event and would be issuing refunds to all ticket holders due to the government’s decision.
These developments shed light on the growing importance of sponsorship risk for all companies, including food and beverage, and the myriad factors that must be considered when making decisions that have the potential to strengthen or ruin a brand’s reputation.
I spoke with multiple PR experts to get their take on the matter – plus actionable strategies that brands should consider adopting when navigating event sponsorships.
The Rise of the Morality Clause
Alys Reynders, CMO for the work management application platform Quickbase, highlighted the far-reaching impact of a social media backlash.
“The rise of social media has made it easier than ever for consumers to mobilize against corporations based on perceived departures from their stated values, making it riskier than ever when it comes to supporting events that feature questionable artists or divisive political figures,” Reynders told FI.
The CMO noted that, for this reason, many brands are now adding “morals clauses” (AKA “morality clauses”) to contracts that set up exit agreements in the event that sponsored athletes, performers, or even owners behave in a way that could potentially damage the brand’s image.
“Today, most brands attempt to remain politically neutral due to the extremely divisive nature of modern politics, and this typically means that more companies will be willing to exit a contract should they become associated with a questionable public figure,” Reynders explained.
Cyndee Harrison, the founder of PR Shield, also mentioned morality clauses, referring to them as “digital kill switches.”
“Modern agreements often include trigger events that allow for immediate no-pay termination under certain circumstances,” Harrison told FI.
Response Speed Is Key
Harrison also pointed out the rapid speed at which news travels within a culture that lives and breathes social media.
“There’s no such thing as a news cycle in today’s marketplace, but rather a notification cycle. In other words, news happens as quickly as the next notification pops up on a phone,” Harrison told FI.
As a result, the PR expert said that “everything about the decision-making process is also sped up, and the team is likely shrunk to include CMO, legal, and crisis comms,” adding that “if a brand can’t issue a statement within the first few hours, they’ve already lost ground.”
Susan Stoga, a senior strategist at Bear Icebox Communications, also acknowledged the significance of a speedy response, which she dubbed “a brand’s greatest asset” in this sort of situation.
“In nearly any reputational crisis, delayed decision-making leads to slower communication, which creates a vacuum that audiences will fill with their own narratives,” the PR expert said.
“It is critical to remember that silence is never perceived as neutrality,” Stoga told FI.
Proactive > Reactive Strategies
In addition to morality clauses, Harrison also explained that companies have been shifting from reactive crisis management to “proactive vulnerability mapping” strategies in recent years.
“In 2026, an escape hatch isn’t just a legal clause; it’s a logistical one. Brands now tier talent with risk scores before agreements are signed,” the PR expert explained.
Harrison also predicts that two additional shifts will occur in the near future:
- A rise in third-party certification that is a standardized benchmark so brands know they’re hiring talent that’s not only high-reach but crisis-ready
- Event organizers being forced to carry insurance to protect their sponsors’ considerable investments when a headliner’s actions lead to an event collapse
Stoga also emphasized the importance of a well-developed reputation management plan, which she says should outline contingency protocols, communication procedures, and clearly defined exit provisions for all parties involved.
“When organizers take the time to establish this framework upfront, it signals a genuine respect for their sponsors’ brands and meaningfully strengthens the foundation of the partnership,” Stoga said.
The Food Institute Podcast
This Episode is Sponsored by: City National Bank
John Linehan, president of Irresistible Foods Group, explains how organizational charts are being supplanted in the Capability Era and how a new vision of leadership is growing within the food and beverage industry in this episode guest hosted by City National Bank’s Shahe Kassardjian.
