By Phil Parkinson, Head of Commercial Law and specialist in sports law at Blacks Solicitors,
It’s crucial that athletes and their agents are aware of the key points to be considered when entertaining an agreement with a management company. What follows are some best practices for what athletes and sport managers should consider when navigating such agreements.
The law
Sports contracts and agreements are a vital part of the sports industry. They are legal documents that outline the specific terms and conditions of an athletes’ employment within a sports team or organisation. Negotiating sports contracts is essential to ensure that an athlete is adequately compensated, protected from risks and clearly understands their role and the role of stakeholders.
Key things to know about agreements
Agreements are always better in writing. Written agreements ensure that athletes create clear boundaries of expectations and importantly, allow for any unplanned circumstances that might arise. Travel, endorsements, on-field and off-field issues should all be included as basic clauses in any agreements that are entered into to best protect an athlete. Another reason why negotiating and drafting sports contracts is important for athletes is that it can help them understand their role at their club.
It should be agreed with other coaches within the player’s group about responsibilities in relation to management companies. For example, does the new management company want to pick up the existing obligations already dealt with by other coaches or persons within the group. If so, these should all be documented in the agreements and any current agreements amended.
One of the primary reasons for negotiating agreements is for athletes to protect their financial interest. Due to comparatively short-lived careers, athletes have limited earning potential,so they need to ensure they are paid a fair wage for their services. In addition to protecting financial interest, agreements can also protect the physical well being of athletes. For example, agreements can outline responsibilities to ensure a players’ physical health and safety to prevent injury and ensure that the athlete is not putting their health at risk.
Coordinating contracts
There are a number of key points that athletes need to look out for when coordinating contracts with management companies. Key considerations in the terms of an agreement could include, for example, termination provisions and what the expectations and obligations of each party are.
Athletes should consider all the below during the negotiation and management of agreements:
- Transfer and transfer fees: Athletes should be aware of additional charges known as ‘percentages’ that may be added to the total sales price of an athlete. These fees are determined during contractual agreements.
- Wage increase or reduction clauses: Players are best advised to argue narrow grounds for a reduction in fees, for example if a player becomes injured. Management and clubs will suggest alternative ways in which to save money by insisting there are a variety of instances that could qualify for reduced pay for the athlete.
- Match appearance fees and winning bonuses: Consideration must be taken to negotiate these clauses during the negotiation process.
- Additional fees: Costs such as travel, accommodation and expenses must also be negotiated during the agreement process.
- Sell on clauses: Before any transfer or agreement is signed, clubs and players must consider sell-on clauses which may be incorporated into an agreement.
- Image rights: New clubs often demand the exclusive right to control how the image of a player appears across advertising and publicity. Players should consider this and negotiate to remove any potential conflict of opportunities that new club and sponsors may cause.
Any additional considerations?
There are, of course, matters to be considered outside of the legal and financial sphere. For example, does the athlete and management company get on and will they work well together with both the athlete and other stakeholders.
Some athletes prefer more hands-on-management styles, whilst others may work better with a company that’s only available when they are really needed. This type of management company and management style should also be considered prior to an athlete signing an agreement.
