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Professional Sports and the Law
South Texas College of Law Houston
Champion, Walter T.

Sports Law
Champion
Spring 2016
 
 
Chapter 2 – Contracts
Philadelphia Ball Club v. Lajoie –
Players are unique and as a result can be enjoined.
B/c each player is unique, the SPK includes a clause that gives the team the equitable ability to obtain injunctive relief so as to thwart the player from breaching his contract and jumping to another team.
Lajoie’s contract prohibited him from playing professional baseball with any club other than his current one.
The injunction was issued since his services were of a unique character, which rendered them of peculiar value to the baseball club.
 
L.A. Rams v. Cannon – “Dirty Hands”
This case was an early example of how contracts were interpreted before the NFL changed its SPK to reflect a lessened importance to the commissioner’s signature approving the contract.
Court holds that the Commissioner’s approval is essential to the formation of a contract and is so b/c the terms of the document make it so.
In this case, a fledgling league was attempting to steal contracts from a more established league (a bidding war). The players used the language in the approval clause to jump contracts and acquire a better deal; essentially the language was a tool to secure better contracts.
Must have clean hands in a court of equity, and the Rams did not have clean hands.
 
Detroit F.C. v. Robinson –
This case was an early example of how contracts were interpreted before the NFL changed its SPK to reflect a lessened importance to the commissioner’s signature approving the contract.
In this case, a fledgling league was attempting to steal contracts from a more established league (a bidding war). The players used the language in the approval clause to jump contracts and acquire a better deal; essentially the language was a tool to secure better contracts.
 
Pasquel v. Owen –
Owen was a player/manager who was fired as manager and later quit as a player.
His contract was specific in terms of his compensation, but not for his obligations.
Court ruled that Owen had no right to abandon the contract b/c he continued to play as only a player which showed that he could still be bound by the contract to be only a player.
 
– (Standard Player’s Contract)
The key link between players and their teams is the standard player’s contract (“SPK”).
It is the only employment agreement that is allowed in professional team sports such as baseball, basketball, football, and hockey.
It is a contract of adhesion that has been shaped and reshaped by successful court challenges and the collective bargaining process.
The SPK is an employment contract that specifies the player’s rights and states that this player, no matter how average he appears to be, possesses unique skills.
B/c no person is exactly the same as another person, it follows that no athlete is the same as another player.
The SPK itself is sacrosanct, but a highly prized player can add addendums to his contract that can make the entire package more attractive.
Ability of clubs and players to negotiate individual terms is controlled by the CBA.
 
 
Johnson v. GB Packers –
Interpreting a season contract.
The court found for player Johnson, interpreting the term “season contract” by looking to the sport’s customs and its typical business usage of the term to supply a meaning.
While interpreting ambiguous terms, the agreement is interpreted against its author.
Handwritten provisions trump typed clauses, which in turn prevail over printed provisions.
 
Tillman v. N.O. Saints –
This case emphasizes the importance of decisions made about a player’s fitness to play by both the team physician and the coach.
Tillman was injured during a preseason drill, and his damaged knee was operated on and repaired.
After sufficient recuperation, he was instructed to return to camp to begin an exercise program and was subsequently cleared by the team physician to resume full duty.
He was later released under paragraph 6 of the then-existing SPK.
Tillman disputed the physician’s conclusion as to his physical condition and contended he was still suffering from the injury that occurred while he was under contract.
The court gave deference to the team physician’s finding of fitness.
A team can NOT force performance from a player.
Termination MUST BE “for cause.”
 
Signing bonuses –
The signing bonus is the most sought-after goal in the contract negotiation process.
Agents always want as much money up front as possible. (10% is normal, 35% is max).
A signing bonus is up-front money in that all the player has to do, at a minimum, is appear in training camp ready to play.
It is not considered salary since the athlete receives it for the mere act of signing, not for actually playing.
If a player is “cut” later on, he still keeps all the bonus money received.
Roster bonuses are also much sought-after in negotiations and are payable to the player for making the team.
It is part of the player’s remuneration package.
 
Alabama Football v. Stabler –
Court allowed Stabler to keep the signing bonus even though the team was no longer in existence.
Player must show a willingness to perform and in this case it was inferred by Stabler allowing the team to use his name and likeness for publicity purposes.
B/c the team folded before camp, the court tried to fashion a compromise, since Stabler was stopped from any attempt to perform at camp.
 
Alabama Football v. Greenwood –
Greenwood signed a three year contract with a team that went bankrupt after the first year. He had a signing bonus that was

ingham shall not be traded to any other club without his consent.
Owners sought an injunction. However, one cannot get an injunction (equitable claim) with unclean hands and the owners had tried to get Cunningham to sign while he was still eligible for college.
The Cunningham model of no-cut clause protects player from a cut based on a lack of skill but not from one based on poor physical or mental condition, inability to perform as result of off-field injuries, or suspension without pay for disciplinary reasons.
 
Collateral Agreements –
Each contract contains an incorporation clause that incorporates into the contract collateral agreements such as the union-management CBA and the league’s bylaws and constitution.
In essence, the SPK is modified or extended by these collateral agreements.
These documents are incorporated into the contract as if they were a part of the contract.
 
Incorporation Clause –
There is usually an incorporation clause, which modifies the SPK by incorporating into the document other documents, most notably the CBA and the league’s bylaws and constitution.
 

A club can rightfully terminate a contract for material breach. As a general proposition, the termination of an athlete’s employment contract is deemed to be a breach of contract if the termination is not justified.
However, justification is interpreted broadly.
An employer can terminate a contract if the athlete is physically unable to perform.
But, if a team terminates an employee on the basis of an injury, such an action is usually covered by a provision in the union-management CBA.
A club can rightfully terminate a player’s contract if the athlete is out of shape, lacks skill, or defies club and league rules, or for a material breach of the SPK.
A player with unique, proven, and marketable skills is rarely released, but a player with marginal skills is more often released due to a lack of skills, as judged solely by the team.
 
Madison Square Garden v. Ali –
Boxing contracts include boxer-manager, boxer-trainer, boxer-attorney, and boxer-promoter. Usually one side claims tortious interference of a business relationship.
In this case, court held that the parties mutually abandoned the contract.