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Negotiating and Drafting Professional Sports Contracts: Overview

Introduction

Professional and collegiate sports combine to form a key aspect of the United States entertainment industry. The two largest professional sports leagues in the country, the National Football League and Major League Baseball, posted 2013 revenues of $10 billion and $8 billion respectively. The major governing body of amateur athletics, the National Collegiate Athletic Association, accrued $912 million in revenue in 2013. With such a profound volume of business, it is only natural that a vast array of contracts are needed to memorialize the plethora of business arrangements in which sports entities are involved. 

Scope

This research guide focuses on the contractual agreements of professional sports franchises. While the primary focus of the guide involves professional sports, collegiate athletics have increasingly pursued profit maximization and commercialization, to the point where collegiate athletic departments now reflect many characteristics of their professional counterparts. With that being reality, many of the contractual agreements for both entities are the same. Therefore, this guide will present information relating to collegiate contracts to fill informational gaps.

Because sports is an industry that forms the core of its business through conducting contests in the public eye, there exists as much interest in the contracts of sports organizations as virtually any other conceivable entity. This has resulted in the authorship of many narrowly tailored secondary source materials discussing issues involved in sports contracts. However, peeling back the veneer and luster of the names of the parties in such agreements, sports contracts are identical to any other contractual agreement, while containing contingencies addressing the specific industry in question.

 Any issue dealing with a professional sports contract must be met with a strong basis of knowledge in negotiation and contract drafting principles. These are foundational skills that must be acquired to play in this arena, so to speak. Because of the necessity of these skills, this research guide will examine resources for acquiring and advancing skills in these two threshold areas. The guide will include sample sports contracts and how to locate similar agreements for reference. Because of the narrow specificity of this industry and guide topic, this guide primarily focuses on resources regarding the topics of negotiation and contract drafting generally, and utilizes sample contractual agreements to address issues related specifically to sports. Furthermore, this guide does not address contract formation or the defenses to contracts and contains only a minimal discussion of case law. This is merely a result of the topic selection, as these agreements are entered into between highly sophisticated parties and those issues would likely be addressed by outside counsel, once a dispute regarding the contract has arisen. 

Research Strategy

The General Counsel of a professional basketball team telephones in need of help with a contract. The team is interested in memorializing an agreement with a corporate partner, that will encompass monetary consideration from the company in exchange for a suite at all of the team’s home games and advertising on the court. How would an attorney approach crafting an agreement?

 The first research step would be to make sure adequate foundational skills in negotiation and contract drafting have been established. Once again, these are skills that must be learned and obtained.

Once the adequate threshold knowledge has been gained, attention turns to familiarization with the specific type of contract at issue. This is where good lawyering skills will go far. It is essential to understand the entirety of the purpose of the agreement from the client’s perspective and to anticipate possible contingencies that may occur in negotiation, drafting or over the durational term of the contract. Sample contracts are of extreme importance, because of the massive efficiencies gained and can be accumulated through a variety of sources: connections within the industry, google searches, or Practical Law Company.

This research strategy is unique because this guide addresses such a narrowly-tailored legal issue. Unfortunately for novice sports contract enthusiasts, the most effective tool for understanding these agreements is access to a sports entity’s contract database. With that being said, the information contained herein will lead to better outcomes for any attorney dealing with professional sports contracts.

Conclusion

Professional sports teams enter into contracts to memorialize a plethora of different business arrangements, just the same as companies in virtually any other industry. Background knowledge in both negotiation and contract drafting is necessary to optimally understand and work with these agreements. That threshold knowledge can be acquired through practice aids, and can be maintained through current awareness tools such as reputable blogs. The major challenge in researching professional sports contracts is obtaining access to a sufficient number of sample agreements. Non-sports sample contracts can be obtained through Practical Law Company. Sports-specific agreements can be obtained through industry connections, or through combing the agreements made publicly available via the news media. These agreements are enjoyable to research and analyze because they involve an industry that operates within the public eye. At the end of the day, however, these contracts are very similar to those of any other industry. 

Student Guide Author

Matthew Topi is a graduate of the University of Missouri School of Law.  During law school, Matt interned with Major League Soccer Headquarters in New York City as well as with the MLS franchise in Kansas City, Sporting KC. He also served as a Legal Intern with Mizzou Athletics for two years while completing school. More information as to Matt's professional career can be found via LinkedIn

This guide has been created in support of Professor Diamond's Advanced Legal Research class for Spring 2014. The contents of this guide should not be taken as legal advice or as the work product of MU Law librarians.

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