Interrobang
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This gets at something Iāve been curious about:
https://x.com/MattNorlander/status/1913041565750001939
Schools buying out other schoolsā contracts isā¦more orderly than I expected (assuming it actually happens)? Though it is definitely still messy.
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Supposedly Robert Wright had signed to stay at Baylor before BYU jumped in with a much bigger offer.
With revenue sharing coming in, youād think there would be a way to tie players in a bit more through contracts. But I donāt know anything.
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Is there any chance there will be 2 year minimum deals made mandatory? Or is that a non starter?
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Good question for a lawyer or a judge I suppose.
My lay reading is that a 2-year minimum has antitrust issues, just like the sit-out transfer year ended up having. Maybe if it were collectively bargained?
@AnonymooseHoo Do they teach you this in your fancy law classes?
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My preferred approach would be to have two year contracts be the default for kids coming from HS or JuCo/NAIA. Player option in the case of a coaching change. Going into their āsecond contractā AKA their third NCAA season, teams and players can negotiate one or two the rest of the way. Obviously additional caveats and outs for academics, rules violations, staff changes, maybe conference realignment, or maybe medical or family hardship.
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I guess another thing with the two year contracts is that they seem problematic when the pool of money available continues to grow. That dynamic is there in the NBA too, but the cap is reasonably known in advance, contracts can be pegged to a percentage of the cap, and the rate of increases to the cap is bargained.
In college basketball, the funds available are super unpredictable and opaque but still growing (for now), so thereās a big incentive to renegotiate the contract every single season. Iām not too confident that revenue sharing will solve this, though it is trying to.
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Rule of reason
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Thatās an answer that requires legal knowledge to parseā¦can you explain ārule of reasonā and how it applies to contracts for cbb to a layperson?
Expect a bill for 0.2 hours to draft and send a response.
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The answer to āHow was he not held to the contract?ā is that courts wonāt grant specific performance of a personal services contract. Specific performance is a legal remedy for breach of contract in which the court orders the breaching party to fulfill its contractual obligations. Itās an equitable remedy that requires the plaintiff to prove it has no adequate remedy at law for the defendantās breach. Itās really difficult to get. Itās impossible to get in a personal services contract (too much like indentured servitude). In the context of NIL/revenue-sharing deals, the school/collectiveās only remedy for breach by the player would be monetary damages. But how do you prove them (maybe the amount you had to pay to get a replacement player?) Unless the contracts have liquidated damages or buyout clauses, it would probably be a waste of time and money to pursue the breaching player.
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Bottom of page 7 / top of page 8 goes through what it means in the NCAA context (from the 4-qurean case)
So Iāve been thinking about this stuff for most of the morning because it combines three of my favorite areas of the law/classes: contracts, antitrust, and remedies.
As @GMoney noted, one remedy for breach of contract is specific performance (we order you to fulfill the obligations of the contract). Basically not going to ever get it in the context of employment orders.
So you need to go to other remedies. The main one being money damages. But as @GMoney pointed it, absent express contract terms specifying āliquidatedā damages, the schools will need to prove the damages from the breach. To spare everyone a full contracts/remedies lesson, it will be really annoying and difficult for schools to litigate damages for a player not playing for them.
As a predictive matter (not legal advice nor legal opinions), it seems like that leads to the really ugly position of schools putting liquidated damages clauses in these contracts specifying that athletes will owe them X dollars in the event of breach. I call it ugly because it would mean that schools are going to be suing teenagers for money.
Now, the antitrust analysis is whether the NCAA could impose a rule that looks something like:
Players must play for two years at their school or they cannot play anywhere. That becomes an antitrust question which is probably judged under the rule of reason. The long short of it is that you weigh up the procompetitive benefits against the anticompetitive harms (sacrificing precision for ease of understanding).
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I thought Iāve read that some of these contracts already have break fees. Whether they are getting paid / will get paid is another matterā¦
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Yep. You start looking like a merger agreement with a breakup fee.
Instead of needing FTC approval, you need NCAA approval in your regulatory approval clause lol
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Thanks for the reply ā so is this area of law that governs coachās contracts?
Because we all seem to accept that such and such coach has an $X million dollar buyout clause, usually descending over time (like the one we just paid to VCU).
Could the NCAA not do the same with athletes? IE the new school pays X amount for the services of the player to the original school?
I only got a B in antitrust but my recollection is that antitrust laws govern ā¦ well, various things, but in this context, they wonāt have much to say about what one school does on its own. Antitrust gets involved when there is an agreement among competitors, which is essentially what the NCAA is. Itās an institutionalized agreement among competitors. You need that agreement to have any rules of the road around the actual games. But further commonly agreed restrictions (eg, all contracts with players have to be min. 2 years) can get problematicā¦ Make sense?
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I think you could have similar structured contracts but the problem is the reputational risk from litigating against kids.
If a coach/school is an asshole. Coaches/schools can litigate against coaches/schools and it is fine. But there is a lot of reputational risk for schools suing kids. Does UVA want to be attached to a lawsuit against an 18 year because they wanted to transfer? those are the sort of business considerations that you have to weigh against the pure contract law
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I think thereās something going on with Robert Wright, headed to Baylor. The incentives on both sides tho are for this to play out quietly
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Yep and those incentives will vary based on institution. Some $EC schools might be more willing to battle with students vs a UNC, UVA, Duke, Northwestern, etc.
It is a pretty interesting problem because there are a lot of overlapping legal/business risks. Probably a lot of fun for the lawyers working to advise the schools.
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