DeLong Grant Law Partners needs to take a thorough approach to representing
athletes in contract negotiations. In addition, the firm needs to carefully consider which
matters are of greatest importance to our clients and how we can better represent
them. With our extensive experience, we should be able to accurately predict issues
that may arise and seek to negotiate those matters carefully rather than wait for them
to come up later and possibly end up with underrepresented clients.
Over the past 25 years, the negotiation of sports-related contracts has become
increasingly complicated, and this growing complexity is showing no signs of ceasing.
When DeLong Grant stepped into the sports law arena, contract negotiations were
simple and involved modest sums of money. Now the contracts we negotiate can be
worth hundreds of millions of dollars and are extremely detailed, covering everything
issue that could possibly arise.
Contract negotiations have become increasingly difficult as the amount of
money involved has increased. Team franchises are making huge investments in
athletes, who are vulnerable to injuries and personal problems. It is a risky venture for
all parties involved, and not an easy one to navigate.
As a general rule, the more money involved, the more heavily negotiated the
deal is by both parties. This has definitely been escalated by many of the serious injuries
and issues of misconduct that are prone to occur.
Our firm must try to design contracts that answer every possible contingency.
We are already making an effort to do so, but we must be vigilant. We should assume
the worst – if the worst happens, when will the athlete be released from the obligation
to perform? When must the athlete keep playing?
Morals clauses are becoming more and more heavily negotiated. While we see
the value in such clauses, we also must seek the best interest of the client. With various
steroid scandals in the past decade, there is even more pressure to include escape
clauses in contracts with athletes who test positive for illegal drugs.
Before a contract is finalized, we must work as a team to brainstorm every
possible issue we can foresee. For instance, what if an athlete is convicted of a crime?
Will the athlete be released from the contract? Or does it depend on the nature of the
crime? What about a positive test for steroids – will that automatically cause the
termination of a contract? What about things like gambling, domestic violence, or items
in the athlete’s private life that could harm his reputation? Endorsement deals in
particular will seek to include clauses that will protect the reputation of the company. Of
course, even in those situations, allowances are sometimes made if an athlete is
particularly popular at the time.
Another recent trend is the inclusion of morals clauses related to the company’s
reputation. In the light of recent corporate scandals, athletes want the right to cancel
deals with companies whose reputations are harmed by such scandals. The companies,
however, will be reluctant to agree to such a thing. This is still a relatively new
development, but it’s something that some of our clients are sure to request, and we
need to discuss the best way to approach it.
Mediation clauses have become essential parts of sports-related contracts. In
addition, it’s important that we include a confidential arbitration clause. Historically,
when high-profile athletes appear in court for contract-related issues, they tend to lose.
However, these are often resisted by corporate sponsors who often want to do things
more publicly.
We also need to deal with the issue of athletes perceiving that agents can
provide adequate legal counsel. In most cases, we can effectively replace the need for
an agent, plus we can provide many more services than an agent is equipped to handle.
In addition, we must emphasize money savings to potential clients. Agents typically
charge a percentage of the athlete’s income while we charge on an hourly basis, so we
are only paid for actual services rendered.