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  1. #1
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    Zion in Litigation over Marketing Contract

    Apparently Zion signed a contract with Prime Sports on April 20, long before the CAA Contract and long before anyone knew he had signed any contract. He is now suing to get out of it because the company (which threatened to sue him for over $100,000,000 if he did not honor the contract) is not certified by the NBAPA nor a registered athlete agent in either NC or Florida, where the company is located--thus the contract is allegedly in violation of NC law.

    https://www.espn.com/nba/story/_/id/26966863/zion-sues-end-agreement-marketing-firm

    What the heck? What were they thinking?

  2. #2
    Here’s the complaint.
    https://www.espn.com/pdf/2019/0613/zw_v_psm_lawsuit.pdf

    Don’t know what Zion was thinking signing with them
    He couldn’t have asked K about this before doing it

  3. #3
    Quote Originally Posted by MCFinARL View Post
    Apparently Zion signed a contract with Prime Sports on April 20, long before the CAA Contract and long before anyone knew he had signed any contract. He is now suing to get out of it because the company (which threatened to sue him for over $100,000,000 if he did not honor the contract) is not certified by the NBAPA nor a registered athlete agent in either NC or Florida, where the company is located--thus the contract is allegedly in violation of NC law.

    https://www.espn.com/nba/story/_/id/26966863/zion-sues-end-agreement-marketing-firm

    What the heck? What were they thinking?
    Yeah, this is pretty strange. The company in question offers custom sports experiences for consumers as best I can tell. They have an online ordering system for pete's sake. What would Zion (and his people) be thinking they could possibly do for him?! Very odd.

  4. #4
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    Quote Originally Posted by bundabergdevil View Post
    Yeah, this is pretty strange. The company in question offers custom sports experiences for consumers as best I can tell. They have an online ordering system for pete's sake. What would Zion (and his people) be thinking they could possibly do for him?! Very odd.
    I saw a blurb for Gina Ford describing herself as Usain Bolt's international marketing and branding agent. I think Prime Sports Marketing is different from PrimeSport, which is the experiential company.

  5. #5
    Quote Originally Posted by MCFinARL View Post
    I saw a blurb for Gina Ford describing herself as Usain Bolt's international marketing and branding agent. I think Prime Sports Marketing is different from PrimeSport, which is the experiential company.
    Yep, you're right. My fault for googling too fast when I saw someone going after Zion. Because how freaking dare they?!?!

  6. #6
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    Quote Originally Posted by hallcity View Post
    Here’s the complaint.
    https://www.espn.com/pdf/2019/0613/zw_v_psm_lawsuit.pdf

    Don’t know what Zion was thinking signing with them
    Zion is awesome, charismatic, and sharp, etc.

    Why? I’m thinking July 6, 2000.

    Making impulse decisions is what 18 year olds do.

  7. #7
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    Quote Originally Posted by hallcity View Post
    Here’s the complaint.
    https://www.espn.com/pdf/2019/0613/zw_v_psm_lawsuit.pdf

    Don’t know what Zion was thinking signing with them
    He couldn’t have asked K about this before doing it
    This isn't my practice area or jurisdiction, but based on the statute, it looks like Zion will easily win if they weren't registered agents per the NC statute. The contract is automatically void in that situation. Even if they were registered, the signature page definitely lacks the disclaimer language required by the statute, so Zion has the right to void the contract, which he has exercised. The only wrinkle, I suppose, would be a choice of law provision that says the laws of another jurisdiction govern the contract, but I'm not sure that would be legal in this type of contract.

    If anyone is curious, here are the relevant bits of the two statutory provisions that Zion relies on in the complaint:
    § 78C-88. Athlete agents; registration required; exceptions; void contracts

    (a) Except as otherwise provided in this section, an individual may not act as an athlete agent in this State without holding a certificate of registration under G.S. 78C-90 or G.S. 78C-92.
    (b) Before being issued a certificate of registration, an individual may act as an athlete agent in this State for all purposes except signing an agency contract if: (i) a student-athlete or another person acting on behalf of the student-athlete initiates communication with the individual; and (ii) within seven days after an initial act as an athlete agent, the individual submits an application for registration as an athlete agent in this State.
    (c) A North Carolina licensed and resident attorney may act as an athlete agent in this State for all purposes without registering pursuant to this section if the attorney neither advertises directly for, nor solicits, any student-athlete by representing to any person that the attorney has special experience or qualifications with regard to representing student-athletes and represents no more than two student-athletes.
    (d) An agency contract resulting from conduct in violation of this section is void, and the athlete agent shall return any consideration received under the contract.
    § 78C-94. Required form of contract
    * * *
    (c) An agency contract must contain, in close proximity to the signature of the student-athlete, a conspicuous notice in boldface type in capital letters stating:

    WARNING TO STUDENT-ATHLETE
    IF YOU SIGN THIS CONTRACT:
    (1) YOU SHALL LOSE YOUR ELIGIBILITY TO COMPETE AS A STUDENT-ATHLETE IN YOUR SPORT;
    (2) IF YOU HAVE AN ATHLETIC DIRECTOR, WITHIN 72 HOURS AFTER ENTERING INTO THIS CONTRACT, BOTH YOU AND YOUR ATHLETE AGENT MUST NOTIFY YOUR ATHLETIC DIRECTOR;
    (3) YOU WAIVE YOUR ATTORNEY-CLIENT PRIVILEGE WITH RESPECT TO THIS CONTRACT AND CERTAIN INFORMATION RELATED TO IT; AND
    (4) YOU MAY CANCEL THIS CONTRACT WITHIN 14 DAYS AFTER SIGNING IT. CANCELLATION OF THIS CONTRACT SHALL NOT REINSTATE YOUR ELIGIBILITY.


    (d) An agency contract that does not conform to this section is voidable by the student-athlete. If a student-athlete voids an agency contract, the student-athlete is not required to pay any consideration under the contract or to return any consideration received from the athlete agent to induce the student-athlete to enter into the contract.

  8. #8
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    Quote Originally Posted by JetpackJesus View Post
    This isn't my practice area or jurisdiction, but based on the statute, it looks like Zion will easily win if they weren't registered agents per the NC statute. The contract is automatically void in that situation. Even if they were registered, the signature page definitely lacks the disclaimer language required by the statute, so Zion has the right to void the contract, which he has exercised. The only wrinkle, I suppose, would be a choice of law provision that says the laws of another jurisdiction govern the contract, but I'm not sure that would be legal in this type of contract.

    If anyone is curious, here are the relevant bits of the two statutory provisions that Zion relies on in the complaint:
    Well, why does NC law apply? Is there an argument that Zion is a South Carolinian? Or the company is a Florida (or Delaware) entity?
    Sage Grouse

    ---------------------------------------
    'When I got on the bus for my first road game at Duke, I saw that every player was carrying textbooks or laptops. I coached in the SEC for 25 years, and I had never seen that before, not even once.' - David Cutcliffe to Duke alumni in Washington, DC, June 2013

  9. #9
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    Quote Originally Posted by sagegrouse View Post
    Well, why does NC law apply? Is there an argument that Zion is a South Carolinian? Or the company is a Florida (or Delaware) entity?
    Well, the complaint alleges that the agents came to NC and initiated contact with Zion there. He also signed the contract in NC. And Zion sued in federal court in NC to enforce the NC statute.

    Also, the statute seems to apply to anyone signing an NCAA athlete enrolled at an NC institution. If you do that and are not a registered agent, the contract is void as a matter of law, so you'd never reach a choice of law provioson in the contract since its unenforceable in its entirety.

    Basically, I can't (generally) go to North Carolina and enter into a contract with someone in the state that NC law says is illegal and then try to enforce it by saying another jurisdiction's law governs.

    FWIW, the statute also imposes civil and criminal penalties for violations, though I didn't really look into those.

    Edit: There is a choice of law provioson in the contract that says Florida law governs. But if the contract is void as a matter of law as Zion alleges, they can't enforce that provision.

  10. #10
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    Too late to edit my last post.

    Florida also has adopted the Uniform Athlete Agent Act, so the eligibility warning is also required by Florida law to be included in the contract (it's not in Zion's), otherwise the athlete can void it.

    Also, see subpart (a) of the first statute I cited in my first post: "an individual may not act as an athlete agent in this State without holding a certificate of registration under G.S. 78C-90 or G.S. 78C-92."

    By coming to NC and signing Zion in NC, they acted as an athlete agent in NC, so I would argue the NC law applies.

  11. #11
    So... my question. If these provisions that make the contract void/invalid in NC, who was advising Zion to sign the contract. I can't imagine that Zion signed it without consulting with anyone else, including his parents, at least. Seems like a slam-dunk "don't sign" if a lawyer was consulted.

    Or is this something that wasn't noticed until CAA reviewed it. Unfortunate...

  12. #12
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    Quote Originally Posted by gep View Post
    So... my question. If these provisions that make the contract void/invalid in NC, who was advising Zion to sign the contract. I can't imagine that Zion signed it without consulting with anyone else, including his parents, at least. Seems like a slam-dunk "don't sign" if a lawyer was consulted.

    Or is this something that wasn't noticed until CAA reviewed it. Unfortunate...
    Good questions. I assume the UAAA has been adopted in most states specifically to protect against this happening--"agents" tricking athletes and their families into entering bad, now-illegal, contracts because they aren't well-versed in the law or NCAA's ridiculous rules.

    It's unfortunate Zion has to deal with this, but maybe a silver lining is that his high profile will cause a light to be shined on a problem a lot of student athletes may not realize exists.

  13. #13
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    I would have thought that Zion would have been carefully instructed to avoid this kind of crap during his brief stay in Durham, but I would be wrong...

  14. #14
    Quote Originally Posted by budwom View Post
    I would have thought that Zion would have been carefully instructed to avoid this kind of crap during his brief stay in Durham, but I would be wrong...
    SI has an excellent article up with more details about Zion's relationship with Prime Sports and how the relationship evolved. It was interesting to me that Gina Ford made 4 trips to Durham in 2019 to aggressively pursue a relationship with Zion and his family. I wonder if the Duke staff was even aware of this.

    https://www.si.com/nba/2019/06/13/zi...ting-gina-ford

    It has occurred to me over the last several years that there has been a shift in the way our star freshmen manage their off the court activities. There have been many families that have moved to Durham in recent years with the player for their freshman year - think Bagley, Carter, Williamson, and Barrett to name a few; I'm sure there are many others. In these instances, I would think Duke would have had a decreasing influence on the player's off the court activities, while the family's role has become much larger and more influential. I'm just not sure we can expect Duke to prevent this sort of thing these days, if the staff is not even aware of it.

  15. #15
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    Quote Originally Posted by JetpackJesus View Post
    This isn't my practice area or jurisdiction, but based on the statute, it looks like Zion will easily win if they weren't registered agents per the NC statute. The contract is automatically void in that situation. Even if they were registered, the signature page definitely lacks the disclaimer language required by the statute, so Zion has the right to void the contract, which he has exercised. The only wrinkle, I suppose, would be a choice of law provision that says the laws of another jurisdiction govern the contract, but I'm not sure that would be legal in this type of contract.

    If anyone is curious, here are the relevant bits of the two statutory provisions that Zion relies on in the complaint:
    The one issue that may arise here, which the SI article linked by SavDukeGrad notes, has to do with what counts as as "athlete agent" under the statute. The contract with Prime Sports apparently covers marketing and branding opportunities, but not player contract representation and negotiations. While I'm pretty sure that would constitute "agency" under old fashioned black-letter law, I guess an argument could be made that it isn't the kind of agency the UAAA intended to cover if it doesn't include player contract representation. I don't know enough about the history of the law to know how sound an argument that is, but if there is any doubt, that could be enough to get both sides into settlement negotiations.

  16. #16
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    Quote Originally Posted by MCFinARL View Post
    The one issue that may arise here, which the SI article linked by SavDukeGrad notes, has to do with what counts as as "athlete agent" under the statute. The contract with Prime Sports apparently covers marketing and branding opportunities, but not player contract representation and negotiations. While I'm pretty sure that would constitute "agency" under old fashioned black-letter law, I guess an argument could be made that it isn't the kind of agency the UAAA intended to cover if it doesn't include player contract representation. I don't know enough about the history of the law to know how sound an argument that is, but if there is any doubt, that could be enough to get both sides into settlement negotiations.
    That SI article is very insightful. Based on the definitions in the NC statute, it seems like Ford's argument necessarily turns on the issue of whether Zion was a "Student Athlete" after he declared for the draft, which would determine the applicability of the UAAA to the contract.

    The NC statute defines "Student Athlete" as "An individual who engages in, is eligible to engage in, or may be eligible in the future to engage in any intercollegiate sport. If an individual is permanently ineligible to participate in a particular intercollegiate sport, the individual is not a student-athlete for purposes of that sport." Since Zion retained his eligibility until May 29, regardless of his intention to return to Duke, I would think that he was still a "Student Athlete" when he signed the contract. As far as we know, the only thing that could have made Zion permanently ineligible is the signing of this contract, but that means he was eligible at the time he signed it, so the statute should still apply.

    The NC statute defines an "Agency Contract" as "An agreement in which a student-athlete authorizes a person to negotiate or solicit on behalf of the student-athlete a professional-sports-services contract or an endorsement contract." According to SI, Zion's contract with Prime allowed them to, among other things, "Introduce Williamson to endorsement opportunities; Exclusively oversee all marketing opportunities brought before Williamson; and Negotiate on Williamson’s behalf with any company for purposes of an endorsement deal." If SI's summary bullet points are accurate, then it seems this contract is an "Agency Contract" under the statute.

    The statute defines an "Athlete Agent" as "An individual who enters into an agency contract with a student-athlete or, directly or indirectly, recruits or solicits a student-athlete to enter into an agency contract. The term includes an individual who represents to the public that the individual is an athlete agent. The term does not include a spouse, parent, sibling, or guardian of the student-athlete or an individual acting solely on behalf of a professional sports team or professional sports organization." If the Prime Sports contract is deemed to be an "Agency Contract" then Ford acted as an "Athlete Agent" under the statute--she apparently did everything in the first sentence of the definition.

    Definitions can be found at N.C.G.S.A. § 78C-86.

  17. #17
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    Quote Originally Posted by MCFinARL View Post
    The one issue that may arise here, which the SI article linked by SavDukeGrad notes, has to do with what counts as as "athlete agent" under the statute. The contract with Prime Sports apparently covers marketing and branding opportunities, but not player contract representation and negotiations. While I'm pretty sure that would constitute "agency" under old fashioned black-letter law, I guess an argument could be made that it isn't the kind of agency the UAAA intended to cover if it doesn't include player contract representation. I don't know enough about the history of the law to know how sound an argument that is, but if there is any doubt, that could be enough to get both sides into settlement negotiations.
    Yeah but wouldn't marketing and branding require contracts with whoever is marketing/branding the player. I mean if Sports Illustrated or espn wanted to do some article or promotion involving a player and/or their likeness, there would have to interaction between them and the players people and some form of contract or agreement would be necessary. Whenever/whereever money is changing hand doesn't there have to be a contract? If not, what services are being provided.

    On a separate note, how ridiculous is the $100m figure thrown out by Prime Sports. I know that Zion is going to make insane amounts of money but even at 20% commission he isn't going to even approach $500m in 5 years. And if they are just doing marketing/promotions that can't take into consideration his actual nba contracts.

    I would be very curious to hear what exactly they said they could/would do for Zion. I'm a little shocked that he is finding himself in this position unless there was some seriously shady things (down right lies) coming from Prime Sports.

  18. #18
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    Quote Originally Posted by JetpackJesus View Post
    That SI article is very insightful. Based on the definitions in the NC statute, it seems like Ford's argument necessarily turns on the issue of whether Zion was a "Student Athlete" after he declared for the draft, which would determine the applicability of the UAAA to the contract.

    The NC statute defines "Student Athlete" as "An individual who engages in, is eligible to engage in, or may be eligible in the future to engage in any intercollegiate sport. If an individual is permanently ineligible to participate in a particular intercollegiate sport, the individual is not a student-athlete for purposes of that sport." Since Zion retained his eligibility until May 29, regardless of his intention to return to Duke, I would think that he was still a "Student Athlete" when he signed the contract. As far as we know, the only thing that could have made Zion permanently ineligible is the signing of this contract, but that means he was eligible at the time he signed it, so the statute should still apply.

    The NC statute defines an "Agency Contract" as "An agreement in which a student-athlete authorizes a person to negotiate or solicit on behalf of the student-athlete a professional-sports-services contract or an endorsement contract." According to SI, Zion's contract with Prime allowed them to, among other things, "Introduce Williamson to endorsement opportunities; Exclusively oversee all marketing opportunities brought before Williamson; and Negotiate on Williamson’s behalf with any company for purposes of an endorsement deal." If SI's summary bullet points are accurate, then it seems this contract is an "Agency Contract" under the statute.

    The statute defines an "Athlete Agent" as "An individual who enters into an agency contract with a student-athlete or, directly or indirectly, recruits or solicits a student-athlete to enter into an agency contract. The term includes an individual who represents to the public that the individual is an athlete agent. The term does not include a spouse, parent, sibling, or guardian of the student-athlete or an individual acting solely on behalf of a professional sports team or professional sports organization." If the Prime Sports contract is deemed to be an "Agency Contract" then Ford acted as an "Athlete Agent" under the statute--she apparently did everything in the first sentence of the definition.

    Definitions can be found at N.C.G.S.A. § 78C-86.
    "Or an endorsement contract" pretty much seals this. This is the exact scenario the NC law was written to avoid.

    I've been re-watching The Practice on Amazon Prime, so I feel uniquely qualified to discuss this.

  19. #19
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    Quote Originally Posted by yancem View Post
    Yeah but wouldn't marketing and branding require contracts with whoever is marketing/branding the player. I mean if Sports Illustrated or espn wanted to do some article or promotion involving a player and/or their likeness, there would have to interaction between them and the players people and some form of contract or agreement would be necessary. Whenever/whereever money is changing hand doesn't there have to be a contract? If not, what services are being provided.

    On a separate note, how ridiculous is the $100m figure thrown out by Prime Sports. I know that Zion is going to make insane amounts of money but even at 20% commission he isn't going to even approach $500m in 5 years. And if they are just doing marketing/promotions that can't take into consideration his actual nba contracts.

    I would be very curious to hear what exactly they said they could/would do for Zion. I'm a little shocked that he is finding himself in this position unless there was some seriously shady things (down right lies) coming from Prime Sports.
    The $100M is silly. Like the SI article says, "Even if Williamson signs a sneaker deal worth $200 million, the 15% commission would be $30 million." I actually wonder how hard Ford will want to fight this because it's a Class I Felony for an athlete agent to do any of the following:

    § 78C-98. Prohibited conduct
    (a) An athlete agent, with the intent to induce a student-athlete to enter into an agency contract, shall not:
    (1) Give any materially false or misleading information or make a materially false promise or representation.
    (2) Furnish anything of value to a student-athlete before the student-athlete enters into the agency contract.
    (3) Furnish anything of value to any individual other than the student-athlete or another registered athlete agent.
    If Prime lied to Zion as you suggest (it does seem likely), they violated 78C-98(a)(1). Zion isn't asking for money in his suit. If I'm Ford, I would seriously consider just letting him out of the contract and walking away because I would not want to risk having sworn testimony in a civil matter that could later be used as evidence against me in a criminal prosecution. Also, there's the whole paying attorneys' fees vs. paying $0 to consider.

  20. #20
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    Quote Originally Posted by Acymetric View Post
    "Or an endorsement contract" pretty much seals this. This is the exact scenario the NC law was written to avoid.

    I've been re-watching The Practice on Amazon Prime, so I feel uniquely qualified to discuss this.
    If only you were rewatching The Practice while staying in a Holiday Inn Express.

    Also, your post reminded me, since I did not include it in the earlier post: An "Endorsement Contract" is defined as "An agreement under which a student-athlete is employed or receives consideration to use on behalf of the other party any value that the student-athlete may have because of publicity, reputation, following, or fame obtained because of athletic ability or performance."

    Anyway, I should probably go do actual work now ...

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