Sports and Entertainment
Jim Richards, William Bowyer
July 2024
Following Rory McIlroy’s recent divorce filing, and his subsequent dismissal of these proceedings, Head of Family Jim Richards and Associate in the Sports & Entertainment team William Bowyer explore how celebrities and athletes can ensure they stay on the fairway during divorce proceedings.
Jim and William’s article was published in eprivateclient, 13 June 2024, and can be found here.
Golf superstar Rory McIlroy’s recently announced divorce raises a number of important questions for athletes and celebrities managing divorce proceedings – particularly when filing for divorce overseas.
While Mr McIlroy and his wife Erica Stoll have since ended divorce proceedings, this widely reported case still bears relevance for those looking to manage high-profile separation proceedings.
High-net-worth individuals such as athletes and other celebrities often have a choice of jurisdictions in which to file for divorce. The forum for proceedings can be pivotal to a case, and thus will often be a key factor in deciding where proceedings are filed.
In Mr McIlroy’s case, the Northern Ireland-born sportsman had papers served on Erica Stoll, his wife of seven years and a New York state native, at their home in Jupiter, Florida. Court documents were subsequently revealed to have been filed in Palm Beach County, Florida, confirming the jurisdiction selected by Mr McIlroy for the couple’s divorce proceedings.
Deciding on the most appropriate jurisdiction to deal with a divorce case can, however, lead to a number of challenges in dealing with assets across a number of jurisdictions as well as the tax considerations to which high-net-worth individuals must pay heed if they are to stay on the fairway during divorce proceedings.
Failure to consider the various cross-jurisdictional complexities of divorce can give rise to costly and unwanted satellite litigation, and suggests that it is therefore important for athletes and celebrities to seek advice from legal, tax and pension professionals from all relevant jurisdictions to ensure as swift and efficient a resolution as possible.
However, the procurement of such counsel comes at a not inconsiderable cost, especially in situations where there is a wide range of disputes between the divorcing spouses, leaving both parties exposed to a significant cost burden at the outset of the case and throughout the ensuing proceedings.
Beyond the legal case itself, image and reputation management is also of the utmost importance, particularly for athletes and celebrities, as a messy and public separation could result in lucrative endorsements being lost. In Mr McIlroy’s case, as with so many others living in the glare of the media spotlight, already every available detail of the divorce proceedings is being pored over by the press and public alike in typically scurrilous fashion.
Mr Mcllroy’s brand partners will need to consider their contractual arrangements with the golfer and assess whether a) this matter impacts their partnership and b) whether they have any grounds under their contract to end the relationship or at the very least, use it to their commercial advantage.
Celebrities who are forced to live their lives in the public eye have to be extra vigilant as to how each and every move they make will be interpreted, no matter how private the matter at stake. The well-documented travails of Mr McIlroy’s fellow golfer Tiger Woods during the collapse of his marriage to Erin Woods in 2009 will have given Mr McIlroy and his advisers ample food for thought when considering how best to handle the optics of his own marital breakdown.
High-net-worth individuals, celebrities and athletes must seek a wide range of advice before filing for divorce – including everything from tax and pensions advice to image rights and IP – to ensure that separation proceedings are handled swiftly and any potential fallout is minimised. Of paramount importance is choosing representatives to sensitively handle child arrangements to minimise the impact of the separation on the couple’s offspring.
Frequently, children become unwitting victims of warring spouses’ anger towards one another during divorce proceedings, and all too often the glare of publicity spurs parties into even rasher and more regrettable actions than they may otherwise have taken had they not felt compelled to ‘prove’ themselves and their resilience to the world at large.
Similarly, it is imperative for both parties in divorce proceedings to select advisers as carefully as possible. It is, after all, their guidance which will be of critical importance to the outcome of the case, and to the ultimate financial settlement between the divorcing couple.
Divorce and separation is never easy, nor pleasant, for either side, but when played out in the public eye there is even more potential for mistakes and missteps. Time spent calmly and diligently assessing options at the outset of a case may at times seem onerous and expensive, but if deployed properly will pay dividends in the end.
