Magic Had To Weigh Public Relation Issues in Settling Donovan Matter

Jul 6, 2007

*By Irwin A. Kishner, Esq.
A month after University of Florida basketball coach Billy Donovan accepted the head coaching job with the NBA’s Orlando Magic – only to renege within days and return to the Gators – a minor league baseball team in Florida orchestrated two stunts that poked fun at Donovan’s flip-flop.
The Ft. Myers Miracle, a Single-A Florida State League team, gave ticket-buying fans a chance to renegotiate their “contract” with the Miracle – the contract being their ticket for a game. Fans could try to negotiate a partial refund, a seat upgrade, or the ultimate buyout, a full refund of the ticket price. The Miracle even had an attorney on hand to negotiate the buyouts with the fans in a tongue-in-cheek parody of Donovan’s waffling.
Several nights later, they announced that “Billy Donovan” – a Floridian who shares the coach’s name but not his occupation – would throw out the first pitch. Just before game-time, they announced that their first-pitch celebrant had backed out of the deal and had taken a job as a waiter at a nearby restaurant.
It was all in good fun, of course, but it shows that though the Donovan affair is over, it is far from forgotten. That’s probably a good thing, because there are serious lessons to be learned from it, both for universities and professional franchises and for the coaching talent they employ. The issues range from legal to sound business practice to public and community relations. As a corporate lawyer with sports franchises as clients, I handle primarily legal issues, but many times that role blends with those of business counselor and advisor.
Billy Donovan wasn’t the first coach to waffle on a job change, and he surely won’t be the last. In 1985, Villanova’s Rollie Massimino accepted the head coaching job with the New Jersey Nets, only to return to Villanova before working a day in the NBA. Eight years later, Bobby Cremins announced he was leaving his beloved Georgia Tech for his more beloved University of South Carolina; three days later, he announced that he would indeed stay at his most beloved Georgia Tech.
What to do?
The first thing is to remember that there is a well-settled legal and public policy principle in the United States that you cannot force someone to work for you, employ them as an indentured servant, or prevent them from earning a living. There is also a sound business principle that you don’t want to keep on board an unwilling employee. That goes double when you’re talking about the head coach, who sets the tone and mood for the team, which directly affects its performance, which drives ticket sales, which influences souvenir sales, and so on.
Employers – in the sports world and elsewhere – can and should craft non-compete clauses covering their key personnel. In Donovan’s case, when the Magic decided to release him from his contract, they insisted that he not coach anywhere else in the NBA for a fixed period of time. (Published reports indicated five years, but as is typical in matters such as this, neither party disclosed the precise terms). Typically, I’d advise a franchise to seek the broadest non-compete and the employer, the narrowest. In the end, reasonableness must prevail, both to get the deal done and to have the agreement withstand judicial scrutiny.
This may be counter-intuitive to the general public, but the dissolution agreement that annulled the short-lived marriage of Donovan and the Magic probably offered Donovan some consideration. It wouldn’t be money, of course, because Donovan was the one who walked away. In a case like this, the consideration would probably take the form of waiving any claims for breach of contract – and resulting damages – that the Magic could have pursued. The Magic could have sued Donovan, but this is where the law and business and community relations all merge; Donovan would have asserted vigorous defenses and probably counter-sued, it would have gotten nasty, and the fans might have wished for a pox on both their houses.
Filing suit against Donovan would also have put the image-conscious franchise at loggerheads with a popular, home-state university, distracted the Magic from its core mission – winning games and fans – and alienated resources. In addition, uncertainty is the shaky foundation of all litigation, and the Magic would have to establish not only a nexus between Donovan’s departure and some damages, but also a quantification of the damages. The fact that Donovan returned to the Gators for less money than the Magic would have paid him might have confounded some of the Magic’s legal claims and certainly would have put them behind the eight ball in a public relations firefight. Unless there was no other way out – and an identifiable and sizable upside – they were better off avoiding litigation, as they did.
The Magic played a smart community relations card immediately after Donovan announced his change of heart. The team contacted each of the 200 fans who had bought season tickets within 48 hours of Donovan’s accepting the Magic job, and offered each rescission. The team probably was not legally obligated to do so, but this is where business acumen trumps invoking all of one’s legal rights. A pro sports franchise depends heavily on the good will of its local fans, and there is hardly any amount of money that is worth the perception that a team broke faith with its fan base. You won’t find that in case law or the statutes, but again, these dynamic issues lie at the intersection of law and common-sense business.
The relationship between the Magic and the University of Florida is also worth exploring. The Magic could have asserted a claim of tortuous interference and tried to prove that the university interfered with the team’s legitimate business dealings. If I represented the university, I would advise strongly that nobody at the university discuss with Donovan the possibility of his returning until he had extricated himself from the Magic. If the university were seen as recruiting him or encouraging his return, it could be liable for tort damages for that interference. Further, as part of any agreement between Donovan and the Magic, the university would seek an exchange of releases or a covenant not to sue. It would be wise and proper for the university’s counsel to seek a release from the Magic.
It is often said that all’s well that ends well, and here, everything ended well. The team was able to entice its second choice, Stan Van Gundy, to become head coach, and though his signing didn’t create a marketing buzz as Donovan’s had, he is viewed as a likeable and competent coach. The Magic and Donovan worked things out without tantrums, flame throwing or name-calling. The university laid low until Donovan was free from the ink that theoretically bound him to the Magic, and then got back the coach who led them to two consecutive national titles. And Donovan, by being up front about his reservations and by casting himself as someone motivated by factors purer than money, preserved his image.
Risk management would be nice, but it isn’t realistic. How can franchises know what truly lurks in the hearts of their coaching prospects, when it’s clear that in some cases, not even the coaches know? The team is buying the services of a coach and a front man, not a car or a house, so a three-day rescission clause is probably not the answer. The contracts are ironclad and vest with the employer certain rights, but at times, the teams would be well-advised not to vindicate those rights.
This scenario – or a similar one – will surely play itself out again someday, probably in the not-too-distant future. Every employer – collegiate or professional – should rely on legal counsel to draft contracts that contemplate changes of heart. And coaches, for their part, should examine their innermost feelings before signing contracts, but even so, insist on contracts that give them as much latitude for movement as the employer will allow.
*Irwin A. Kishner is chair of the Corporate Department and a member of the executive committee of the 175-lawyer, New York City-based law firm Herrick, Feinstein LLP. He represents a number of professional sports franchises in their corporate, finance, transactional, acquisition and general business affairs. He has acted as lead counsel on several high-profile acquisitions of franchises; cable television and radio contracts; concessions contracts; stadium and arena financings; advertising and sponsorship contracts; and development and naming rights agreements for stadiums and arenas.


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