Boxed-Out
Despite the pandemic, the world of sports law continues to run the headlines and claimed former Duke star Zion Williamson as its latest victim this week. In new information obtained by The Athletic, it was found that Williamson’s ex-marketing agent filed a lawsuit against last year’s #1 overall pick claiming over $200 million in potential damages.
After declaring for the NBA draft, Williamson signed a five-year contract with Prime Sports Marketing on April 20, 2019. The contract language stated that Gina Ford, the PSM president, would represent Williamson and handle all endorsement negotiations. However, Williamson later broke this contract, electing to sign with Creative Artists Agency (CAA), and sued both Prime Sports as well as Ford. His team asserted that the contract was never enforceable because the agency did not follow North Carolina’s agent guidelines nor warn Williamson about potential eligibility issues.
The following week Ford and Prime Sports countersued on the grounds that Williamson “willfully and knowingly” breached the contract and that the North Carolina Uniform Athlete Agent Act does not apply because he had already declared for the NBA draft with no intention of returning to Duke.
Full Court Press
Despite the fact that these lawsuits were filed more than a year ago, the contents of some documents were just recently made public and could have some highly damaging ramifications for both Williamson and Duke basketball coach Mike Krzyzewski. Ford’s attorneys put forth a Request For Admission, asking that Williamson admit to certain claims made by Ford and her team. The full set of interrogatories can be found here, but the major implication is that Williamson received improper benefits while at Duke and potentially entangles Krzyzewski and CAA in what could start to look like another recruiting scandal.
While Williamson is not required to answer these allegations, the procedure sets up depositions which will undoubtedly include at least the former Blue Devil and could involve the likes of Krzyzewski as well as representatives from CAA, Nike, Adidas and potentially others.
Show Me The Money
So how exactly did Ford and her team arrive at the $200 million + figure that has been reported? Well, as mentioned, the contract signed by Williamson was for five years and awarded Ford a 15% commission on endorsement deals. Therefore, the number cited in the lawsuit represents 15% of the total amount Ford estimates she would have negotiated for Williamson over the life of the deal — $1.3 billion.
As crazy as that number may seem, it’s certainly not impossible to imagine. In the one month alone that Ford represented Williamson, she negotiated deals with Mercedes-Benz, EA Sports, 2K Sports, Burger King, Puma amongst many more. Though no deals were struck at that time, the impressive list of potential clients speaks to the extensive interest major brands had in partnering with this generational talent. Of course in turn, it speaks to the vast amount of money that Ford could have earned through commission.
However, those deals and the subsequent money instead went to CAA which negotiated the largest rookie sneaker deal with Nike’s Jordan Brand for seven years, $75 million. The agency also sealed deals with Gatorade, Mountain Dew, Panini, and 2K Sports though the terms of those agreements are not public.
Location, Location, Location
Though the basics of this case are fairly straightforward, the way in which it will play out is anything but. Beyond just the coronavirus courtroom complications, the largest wrench in these proceedings is the location in which both competing lawsuits were filed.
Team Zion
For Williamson, his biggest advantage resides in the fact that he sued Ford first, and in North Carolina. In such, Williamson’s attorneys kept the ball in their court by controlling the state and consequently the legal system under which the case will be ruled.
This locational aspect of the legal battle is crucial because each state operates under its own Athlete Agent Act (AAA). The language and interpretation of the AAA is essentially what the argument that Williamson breached the contract rests upon. North Carolina’s version has very strict definitions for what constitutes an athlete, agent, an agency contract, etc. This framework is what Williamson’s team is working within to establish that the contract he initially signed is unenforceable.
The argument is that Williamson was unethically manipulated into signing a contract with Ford on account that she met with Williamson’s parents while he was still in college. If true, this would constitute “indirect contact,” which, under North Carolina’s AAA, would nullify the terms of the agreed-upon contract, thereby exonerating Williamson.
Team Ford
As for Ford’s lawsuit, her team took the liberty of filing in Florida which operates under a very different AAA. It is undeniable that Williamson breached the contract, however the legitimacy of the contract’s initial signing is up for debate, which Florida’s AAA will determine. While this location benefits Ford’s attorneys, timing has not been on their side. Williamson’s team appealed the lawsuit and the closure of the courtrooms due to coronavirus have impeded any progress her side had hoped to achieve by this point.
Moreover, given that Williamson filed first, Ford is at a disadvantage in that her team must wait until the conclusion of that lawsuit before appealing in the event that her team loses. She also maintains that Williamson was never “manipulated”, rather that he signed both willingly and voluntarily. One of Ford’s attorneys wrote, “Williamson is an adult male of high intelligence with exceptional business acumen. He is acutely cognizant of his value as a basketball superstar and of his branding, marketability and earning potential.”
Postgame Analysis
Because both sides unsuccessfully attempted to have the other’s case thrown out, each lawsuit will proceed in its respective state. In a vacuum, the way the contract should have been written would have included an arbitration clause, in which case, this information would have likely been kept private. However, the potential endings for this dispute include everything from a quick settlement to a full-scale trial.
The language of each state’s AAA contains enough ambiguity that effective litigation will play a crucial role in hashing out the interpretation of the above issues. It is likely that when the North Carolina-based lawsuit does eventually play out it will favor Williamson given the state’s AAA structure. However, it is equally as likely that Ford’s lawsuit in Florida’s system will yield a positive result for her and her team.
Given the complexity of this case and the wide-ranging possibilities of its conclusion, a “fight-to the death,” so to speak, would probably be a zero-sum game. Beyond just lawyer’s fees, which will quickly run up the expenses on both sides, it is hard to imagine Williamson, Duke, Nike and whomever else may be involved allowing this story to drag out in the headlines. Expect this case, like many other litigations, to end in a quiet, albeit Zion Williamson-size settlement.