Case Study: Player’s Breach of Player-Agent Agreement

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This is a continuing series documenting cases the IBPA’s lawyers have resolved in favor of their clients without having to resort to BAT Arbitration.

 

Alternative Dispute ResolutionBFSN Law’s attorneys recently settled a case for $25,000 for a client without having to resort to BAT arbitration. An agent (“European Agent”) contacted the IBPA because one of his players (“Player”), with whom he signed a 2-year player-agent agreement, had signed a contract to play for a European Team (“Team”) with another agent (“US Agent”). The Player’s contract with the Team stated the US Agent, and not our client, was to receive the $25,000 agent fee. The European Agent wanted to know what he could do to get the agent fee.

 

Most agents sign players to 1- or 2-year player-agent agreements with evergreen provisions. Evergreen provisions are more commonly known as rollover provisions because they act to roll the contract over at the end of the primary term for additional 1-year terms unless the player or the agent properly terminates prior to the end of the primary term. For more information on evergreen clauses click here: http://playersassociation.org/player-agent-agreements-is-your-rollover-clause-legal-part-i/.

 

European Agent’s player-agent agreement had an Evergreen clause in it. The primary term between the European Agent and the Player had ended a few months prior to the time when the Player attempted to terminate the European Agent. Because the Player had not properly terminated the player-agent agreement, the contract had rolled over into an additional 1-year term. It was during this additional 1-year term that the Player signed with the Team using US Agent as his agent. So the Player was still bound to the European Agent at the time he signed with US Agent and signed with the Team.

 

European Agent’s player-agent agreement also contained a BAT arbitration clause. So Agent could have taken the Player to the BAT over the agent fees. But European Agent had no recourse against US Agent in front of the BAT because no written arbitration agreement existed between European Agent and US Agent. BFSN Law’s attorneys knew that in order to settle the dispute outside of the BAT pressure had to be applied to the US Agent.

 

After a little research, BFSN Law’s attorneys discovered the Player is from Texas and returns to Texas every summer while waiting for the next season to start. US Agent had contacted Player while he was in Texas and signed Player to a new player-agent agreement. Player had also signed the contract with the Team while he was in Texas. Thus Texas courts definitely had personal jurisdiction over the Player and very likely had personal jurisdiction over US Agent, and European Agent could sue them in Texas courts.

 

BFSN Law’s attorneys wrote a demand letter to the Player and the US Agent stating that the Player was bound by the player-agent agreement with European Agent, and European Agent was the rightful owner of the $25,000 agent fee. The letter threatened to take the Player to the BAT and laid out the BAT process. If European Agent won the BAT arbitration, Player would be liable for the full agent fee plus BAT costs and significant legal fees.

 

But the demand letter also stated that Texas courts had personal jurisdiction over the Player and the US Agent. The demand letter threatened to file suit against both the Player and the US Agent in Texas claiming breach of contract against the Player and tortious interference with business contracts against US Agent. Filing in Texas State court would be much cheaper than filing an arbitration with the BAT, and BFSN Law’s attorney’s had a distinct advantage in a law suit since BFSN Law is domiciled in Texas. This threat of filing suit in Texas against US Agent put a tremendous amount of pressure on US Agent. US Agent suddenly faced not only liability for the current agent fees, but possibly future agent fees for their interference, plus costs and attorney’s fees.

 

Shortly after receiving the demand letter, US Agent promised to modify the Player’s contract with the Team to make European Agent the rightful owner of the agent fees. BFSN Law avoided arbitration for the European agent and recovered the full amount of the fees for a fraction of the cost and within a couple of months. BAT arbitration could have taken up to a year to recover.

 

BAT arbitration has had a distinctly positive effect on international basketball by giving players and agents recourse against teams who do not pay. Agents can also use the BAT to recover agent fees from players who do not honor their player-agent agreements––like in the situation above.

 

However, BFSN Law’s attorneys always try to think outside the box. By using BAT arbitration as a threat and looking for other ways to put pressure on individuals, BFSN Law can settle cases much faster than BAT arbitration and at a fraction of the cost.

 

If you have an international basketball dispute that needs to be resolved, contact us here: http://playersassociation.org/contact/