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  • Writer's picturekevintarca

Contracts 101

I’m sure you’ve heard stories about ugly disputes between players, agents and teams. As much as I wish this business was full of happy clients and loyal business partnerships, the reality is far from it. There’s always someone, somewhere that is unhappy. And if the contract does not describe how to settle disputes, things can get messy pretty quickly. Which is why I will lead this topic off with the most important piece of advice – it is imperative that any business partnership is outlined by a contract that contains clear language of the services provided and exactly what is expected of all parties.

Contracts are obviously an important part of an agents job. Like most things in life, the more experience you get the better you will become. I’ll be the first to highlight the fact that I am far from a “veteran” agent. I received my FIBA agent license a mere 2 and a half years ago in early 2018.

Don't get me wrong, I can confidently say that I have experienced quite a bit for such a short period of time. From entry level deals for rookies all the way to six figure negotiations in top leagues. But I also know that I haven’t seen it all yet, so maybe I was naïve to enter the business expecting that things would always work out as long as everyone had good intentions and contracts were in place.

For now, we’ll stick to some contract basics.

Contracts Between Players and Agents

This type of contract should leave no room for misunderstanding. Neither party should be in a rush. When all parties are ready to move forward, it is both the player’s and the agent’s responsibility to be aware of the decision they are about to make. The key topics that should be discussed here are:

  • Each party involved, services provided, compensation structure, agent duties, player obligations, term of contract, governing law, confidentiality, arbitration, dispute and termination steps

Contracts Between Players and Clubs

This type of contract outlines the salary and benefits that a team will pay for the services of a professional basketball player. This contract should also require the agent's signature. The key topics that should be discussed here are:

  • Each party involved, duration of contract, player obligations, club obligations, personality and data rights, remuneration, extra benefits and bonuses, buyout clause, injury clause, insurance, governing law, confidentiality, arbitration, dispute and termination steps

[ Pay Attention to the Details ] There have been some ridiculous clauses in professional sports contracts over the years.

The MLB usually takes the cake here with strange bonuses or poorly structured long term deals. But there can be sneaky clauses is any contract. The reason you need to pay attention to the details is because there might be some fine print that you are unaware of that can bite you in the ass in the future. Some fine print can potentially lead to teams not having to pay you a portion of your salary.

Players often get excited about signing a big contract, but forget that their money can be taken away for silly things. For example, in Section 12 of a Standard Uniform Player contract with a NBA Team, it strictly states that the player may not go jet-skiing, white water rafting or bungee jumping without written consent from the team.

Teams also have the ability to put in physical criteria that players must meet at various points throughout the length of the contract. An example of this is in Exhibit 2 of a Standard Uniform Player Contract, where a team can require the player to maintain a certain body weight during the season!

Whether you are an overseas player signing a basic entry level contract, or a NBA player signing a Designated Veteran Player extension, having a legally binding document that carefully describes the terms and conditions of the agreement helps protect everyone involved.

Do athletes need to find an agent who is trustworthy, hungry and motivated to go to battle for them everyday? Absolutely! But as you can tell, there is a lot of work and due diligence that goes into every single negotiation. So an agent who performs needs to be compensated accordingly. How can these two things be checked and balanced? With a lovely document called a contract.


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If you missed the previous parts of this series, check out the links below:


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