Legal matters to consider
In this episode Mo Pasricha joins us from Mackrell Solicitors, covering legal matters sports professionals should consider when signing contracts, such as clauses; clear terms, bonuses, endorsements and boot deals. Plus discussing driving offences.
[2.31] Contractual matters
Things tend to go wrong quite quickly when players have signed contracts which essentially have not been reviewed by legal or a tax adviser. Importance of signing up a contract correctly predominantly comes from the fact English law doesn’t allow you to set up a contract verbally. You may agree with your agent or your club and that may not be in the contract that you end up signing, or you thought that was in the contract you were signing.
Importance of having someone from legal or financial background looking at the contract comes down to a few principals in English law that are worthwhile setting out at the beginning:
- any contractual agreement should be used in the natural and ordinary meaning: it must be in clear laymen’s terms
- Entire agreements clauses: everything in the contract is what both parties agreed, if it’s not in there – it’s not part of the deal
- implied terms : important something isn’t inadvertently implied in the contract, this is of paramount importance
Case study – players bonuses
Player and agent believed he was entitled to bonus as the club had qualified for European competition, which was also the belief of his teammates. They quickly realised no bonus was forth coming. Once contract was reviewed, it was revealed the bonus was entirely discretionary and conditional on several different conditions. This highlights the importance of lawyer or adviser to review contract as this would have been picked up.
Unfortunately, you cannot file an amended version of the contract. Majority of these have anti-variation clauses inserted, unless in some circumstances, all parties agree in writing.
[22.39] Value of the representation agreement
If the player is completely unhappy with the services provided by the agents and want to change to an agent that can provide all the levels of services needed, the options are very limited unfortunately.
There is standard two-year deal representation contact, the FA has a template agreement on the website that any intermediary can use. It may not completely achieve what an agent would like it to achieve, but what it does do, is tie in a player for two years.
If a player is looking to leave their agency and they send a letter that looks like its been drafted by a lawyer, that places that player in breach of the regulation itself. It indicates the payer has had a conversation with another agents which is a breach of the regulations.
[27.39] Endorsement contracts
Most people do not realise how closely linked the performance element is to endorsement contracts. For example, there are reduction in the fees if:
- the player must play a certain percentage of the games, if they drop below a certain percentage in the games;
- if they are injured; or
- deem not to be within their brand guidelines.
Also, most people don’t understand how boot deals are structured, if there are split payments across a period, they can transcend when a player moves one club to another. These deals are pegged on the level of categories of the clubs. Major issues with boot deals have been around the matching clauses. Towards the end of the boot deal, the brand could renew the deal, they usually give 3-6 months to put in an offer.
The key for boot deals, players and agents, is brand consistency when moving from club to club. As we have already established, the devil is in the detail. Players need to make sure what ever has been agreed between the agent and the brand is reflected in the deal.
[34.07] Driving offences
From time not only sports professionals, but most people from time to time in their life are guilty driving offence. Which could be speeding, running a red light, drink driving, being on their phone while driving, social media etc.
Mackrell Solicitors provide a holistic level of service:
- Have their own crime department to help with the offence
- Educational focus with clients and the agencies they work with, not only about the financial work, but life skills needed in their world
- Provide a crib sheet of full visibility to agent, social media agency and of do’s and don’ts and what can and can’t be said
Tip: Don’t post on social media i.e. Instagram Stories while driving or while on a night out – you become a target case for enforcement authorities. One tweet can lose a professional a significant amount of money.
[40.11] Postal forwarding
Another issue causing huge issue and that is overseen is postal mail being unopened, especially if traffic offences are being sent and not opened. Months of missed correspondence can cost athlete more money. It is dependent on the professional adviser to have a good procedure in place to ensure the post is opened, catching it before it becomes a major problem.
This episode was recorded on 16/12/2019
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The Pulse from Smith & Williamson
Sports & Media Show: Legal matters to consider
Broadcast on Smith & Williamson at 09:00, 16th of DECEMBER 2019
Available online from 10:00 on the same day .