By Kate Ragusa
In 2010, Ohio State’s Evan Turner retained David Falk of F.A.M.E. LLC (“FAME”) as his agent upon declaring for the NBA Draft. Following an initial disagreement over the marketing fee FAME would collect on endorsement contracts, the parties reached a verbal agreement: Turner would pay a 15% commission on all marketing income, increasing to 20% if such income exceeded $2 million in a given year.
Acting on Turner’s behalf, FAME negotiated with Li-Ning, a Chinese athletic footwear company. The contract provided four forms of compensation: (1) guaranteed minimum cash payments; (2) royalties on the sale of Turner’s signature shoe; (3) performance-based bonuses; and (4) one million shares of Li-Ning stock. The parties subsequently executed a written agreement memorializing their prior verbal terms. Neither the oral nor written agreement addressed commissions on stock received through endorsements.
In 2016, Turner terminated FAME and David Falk’s representation. At that time, Li-Ning stock traded at approximately $0.40 per share. Turner’s financial advisor received both an email from FAME and a call from Falk personally, stating that if Turner liquidated his Li-Ning holdings, he would owe FAME the 15% marketing commission. Falk, who had never previously taken a commission on equity options in endorsement deals during his five-decade career, maintained this position. Turner denies having seen the email, and neither he nor his advisor responded.
Five years later, Turner sold 800,000 shares of Li-Ning stock. FAME invoiced Turner’s corporate entity, EmTurn LLC (“EmTurn”), but payment was never made. In 2022, FAME filed suit in the Superior Court of Delaware, New Castle County, asserting eight causes of action, including breach of contract, unjust enrichment, and related claims. Two claims were dismissed early in the proceedings. Following discovery, EmTurn moved for summary judgment on the remaining claims. FAME opposed and cross-moved for partial summary judgment on its breach of contract claim, voluntarily dismissing claims for breach of the implied covenant of good faith and fair dealing and for tortious interference.
Oral arguments were held in January 2025. The court granted EmTurn’s motion for summary judgment on two counts, leaving only FAME’s breach of contract claim for decision. The court’s written opinion addressed two dispositive issues: (1) whether the Li-Ning stock constituted “marketing income” within the meaning of the parties’ agreements; and (2) whether the statute of limitations barred recovery.
On the first issue, EmTurn argued that the parties never intended for equity compensation to be commissionable and that the term “marketing income” was ambiguous, warranting consideration of extrinsic evidence such as industry practice and Falk’s historical treatment of stock options. The court disagreed, holding that the agreements contained no ambiguity. Citing Delaware precedent, the court emphasized that “[a] term is not ambiguous simply because the parties do not agree upon its proper construction.”
The court noted that the agreements obligated Turner to pay a commission on “all marketing income . . . from any and all Marketing Contracts.” Because the Li-Ning endorsement contract was indisputably a “Marketing Contract” and the stock was part of the commission package, the court concluded that the shares constituted commissionable marketing income. The court therefore rejected all interpretive arguments proposed by EmTurn, including reliance on Falk’s prior practice of not commissioning stock.
The second issue concerned whether FAME’s claims were time-barred under Delaware’s three-year statute of limitations for contract actions. The agreements did not specify when the marketing commission was due, so the court examined the parties’ course of dealing. Historically, FAME invoiced Turner at the time he received compensation from Li-Ning, which in the case of stock was the vesting date—not the date of sale.
FAME contended that the stock became marketing income only upon its sale in 2021, thereby making the December 2022 filing date timely. The court rejected this view, reasoning that the proceeds from a stock sale were not attributable to marketing efforts and that FAME’s decision to invoice at the time of sale was inconsistent with its prior invoicing practices. Because the FAME agreements did not define “Marketing Income” as a defined term, the court turned to dictionary definitions to determine whether the Li-Ning stock—or the proceeds from its sale—constituted commissionable income. The court concluded that, as the stock itself was part of Turner’s compensation under the endorsement agreement, it was the stock—not the sale proceeds—that was commissionable.
The court held that the Li-Ning shares became commissionable marketing income on July 1, 2016, the day they vested. As such, any breach occurred on that date, and the statute of limitations expired in July 2019—more than three years before suit was filed.
Because FAME filed suit well outside the limitations period, its claims were time-barred. On April 25, 2025, Judge Patricia Winston granted EmTurn’s motion for summary judgment and denied FAME’s cross-motion for partial summary judgment.
Kate is beginning her 2L year at Tulane University Law School in New Orleans. She serves as the Chief Marketing Officer of the Tulane Sports Law Society Executive Board, as well as Tulane’s Junior Managing Editor for the SLA Newsletter.
