SORRY NIKE....BRAZIER TO NEW BALANCE!!!!

The best that can come from the Berian situation is an end to reduction clauses, or at least, contracts with significantly more guaranteed money. To Gnike - "minimal reduction clauses" - try NO reduction clauses. That was the point of the lawsuit........NB had all guaranteed. Nike wanted to slip in enough clauses that could turn the contract into 0. And to another poster above comparing Nike to a struggling international conglomerate and NB to a small up and comer - wake up. Nike is not struggling. Yes, it took a PR hit with the Berian matter. It will take more PR hits down the road as companies like this tend to do. But you are only fooling yourself if you think that the Berian situation is going to somehow derail Nike or start this wave of "let's all go to work for the little guy". Wejo is correct (sorry Malmo) - but with one caveat. This year and next, runners may remember what happened to Berian. But money is money. NB does not have the resources to sponsor 500 runners. To the extent a few fringe runners decide to choose Brooks/adidas/NB over Nike when the offers are similar - okay. That's fine. That and a few less reduction clauses will be the ultimate impact of the Berian situation. Four years from now, as long as Nike doesn't file another lawsuit like this, all will be forgotten except by those who follow the sport intensely. And in the meantime, no company can compete with Nike's endorsement money, its reach in the international racing community, and sheer size. If Nike has to start handing out guaranteed deals without reductions for the next 2 years just to beat the other shoe companies - then Nike will do that. Because it can. And because it has shown that it hates to lose at anything, to anyone. The leaders there have shown that they carry grudges and act childish. But also - this is a multi billion dollar company. Last year - it's PROFIT was just over 1 billion dollars. This is after it has paid others like Lebron James and Michael Jordan millions upon millions of dollars. A $50K or even $150K shoe deal for them is the equivalent to a McDonald's Happy Meal. it could afford to guarantee the contracts for 2-3 years without reductions an. So all grudges and immature behavior aside, Nike isn't going anywhere.

Bait and Switch wrote:

Gnike do it wrote:

there is no such thing as a "shadow clause"; there are agents and athletes who fail to completely read a contract.

Here is how it works, since you are too stupid to understand.

- BB signed a short-term contract with a RoFR, and minimal reduction clauses.

- Nike agreed to match and then submitted a long-term contract with a dozen significant reduction clauses.

This is called bait-and-switch.

Couple of corrections because I just read the post further -

Bait and Switch - you are confusing the 2015 Nike Deal (short-term with RoFR) and the 2016 NB Offer.

And NIKE had just UNDER 1 BIllion in profit (it was about 900 million if my memory is correct) not over.

I suspect the marginal benefit of signing a rising-star athlete is much higher for NB than for Nike, and this is why NB is more generous with terms. NB is really trying to gain visibility among a segment of consumers. Nike already has the visibility through many different sports. For them, signing a track athlete is sort of like buying up IP and putting it on the shelf so that a competitor can't use it.

That athletes complain about reduction clause and the fans jump on their side...until the Athletes start ducking competition.

The reduction clauses you know actually require them to race and achieve success. instead of taking the $$ and doing nothing.

also, we haven't seen a fully NB contract, a full Brooks contract or a full Oiselle Contract.

It's very possible that they have other clauses that act as "reduction" clauses but are called something else. I'd bet they have some kind of termination clause.

darpham pram wrote:

That athletes complain about reduction clause and the fans jump on their side...until the Athletes start ducking competition.

The reduction clauses you know actually require them to race and achieve success. instead of taking the $$ and doing nothing.

also, we haven't seen a fully NB contract, a full Brooks contract or a full Oiselle Contract.

It's very possible that they have other clauses that act as "reduction" clauses but are called something else. I'd bet they have some kind of termination clause.

The point is that a running contract cannot be directly compared to generic work contract, which is a point that is obvious to everyone except you.

In some peoples minds, they think "if they're not racing, they should not get paid". But guess what, there are many situations where a runner is injured training for the very sport they are getting paid to race in. A contract in one breath should not say "you need to run X times per year, and achieve X time and X place" and in the same breath punish them for riding the razors edge to achieve such ludicrous claims.

At the same time, they are still expected to wear only one companies gear, do all of the commercials/PR/marketing crap, work with only approved coaches and clubs, etc, regardless of their pay. This gives athletes little to no recourse in the case of getting injured on the job.

All of this to say, what healthy athlete in their right mind WOULDN'T want to race and win prize money in the prime of their career, when they are sure to lose the ability to do so within a few years? It only punishes athletes who are doing all the right things they can. No one can predict how their training will progress, if they'll get injured, if their workouts will translate to results, or even how their competitors are going to race, and yet these are all things that these contracts are trying to enforce.

So yeah, a lot of people are happy taking a smaller contract with no reductions because they know at some point they might get injured or not place as well as they would like, and are wising up to the actuarial bullshit lottery Nike has littered their "Big" contracts with.

Almost every employment contract has termination clauses. At large companies an employee can be terminated if certain situations occur: use of drugs at work, physical fights, sexual harassment, etc.

termination clauses wrote:

Almost every employment contract has termination clauses. At large companies an employee can be terminated if certain situations occur: use of drugs at work, physical fights, sexual harassment, etc.

What's the price of tea in china?

Nobody's arguing that fact.

Heard RunGum offered him a solid deal. Let's not rule out OTC Elite as well.

Must be tough wrote:

Malmo. You and the other anti-Nike idiots need to stop with the slavery references. Seriously, it's offensive. These are grown adults entering contracts if their own free will. They might have some term that extend past the contract. (Newsflash - most contracts do). It's not onorous or immoral or unethical

Im sure all the shoe contracts have termination clauses or other clauses.

You should either know better or shut up about it.

If running is a guy's job and say he makes $125,000k a year from Nike, I don't like the ethics if that contract can be reduced to $5k a year and be extended for 3 years. An employment contract could never do that and would be considered unethical. The problem is most runners make the bulk of their money from their contracts.

The agents are doing a TERRIBLE job if they'll let their athlete sign such a contract. It should have a minimum amount in the contract where the ATHLETE has the right to terminate. So if Berian gets reduced below $20k a year he has the option to cancel the contract.

**

I wanted to start a thread to ask if such a thing above is legal (going from $125k to $5k) but I assume it is.

I was a hack and had no sponsor. Clearly, Nike could say I'll give you $10k a year to run (and I'd make the rest from LetsRun) and I might take it as then it would be more of a supplemental sponsorship than my entire income.

It is legal to do the reduction because this is not an employment contract. This is an endorsement deal.

wejo wrote:

**

I wanted to start a thread to ask if such a thing above is legal (going from $125k to $5k) but I assume it is.

.

Of course it's legal to structure a contract anyway both parties agree on. "Who does number two work for?" The agent works for the best interests of his client, not for the sponsor.

It only makes sense for the sponsor to want to have reduction clauses to protect against the downside. Believe it or not, it's in the athletes best interests do have such a structure, as well. If the athlete performs at the level that the sponsor and he agree he should he should, in theory, make more money this way, because he is compounding his bonuses and appearance fees and prize money on top of a higher base. As an athlete, you had better have a high expectation for yourself. If he wanted to sacrifice the higher base for a guaranteed contract, he has to agree to a lower base to get that security. The problem with the Berien contract (and presumably other Nike deals) is that the schedule called for steep reductions in the event of injury, illness, or just plain performance below the expected levels by the sponsor. Reductions so low that the athlete could become trapped in a corner by the sponsor without a way of getting out.

Reductions for lets say $150k to 75k to 50k on a three year deal seem reasonable. There is incentive for the athlete and downside protection for the sponsor. Reductions from $150 to 8k with no way out are an epic failure by the agent.

I think the real issue is the shadow clauses that allow the sponsor the right of refusal up to 180 days AFTER the term of the contract had expired. That's just stupid to agree such terms. I cannot believe that any agent would concede to such risk, especially with Nike, which has a long history with contentious deals like this.

"Who does number two work for?"

My two cents and more wrote:

It is legal to do the reduction because this is not an employment contract. This is an endorsement deal.

Endorsement deals do not have reduction clauses.

wejo wrote:The agents are doing a TERRIBLE job if they'll let their athlete sign such a contract. It should have a minimum amount in the contract where the ATHLETE has the right to terminate. So if Berian gets reduced below $20k a year he has the option to cancel the contract.

Ideally, the athlete's and the agent's financial interests should be identical. The agent gets paid only when the athlete gets paid. But is this the case?

If an athlete gets reduced, is the agent's fee reduced? In other words, is the agent getting 15% of the sponsor payments only as they come in or is the agent getting 15% of the value of the contract up front? If the reduction is retroactive, does the agent have to pay back the agent's part of the reduction?

The Berian made some sponsorship contracts public, but are there any public contracts with track and field agents?

Totally agree. These contracts have upside AND downside. Which makes sense. And, the fact that they have reductions means that the endorser can pay the athlete MORE during the term.

What doesn't make sense is to sign up for a ROFR for 6 mos after the term. That means that you have to be unpaid for 1/2 a year if you want out. NO ONE should sign that deal.

I like the idea of athletes not signing with Nike because of their negative press but the dollar amounts of the contracts isn't everything.

There is a great benefit to being a Nike athlete when it comes to connections to get the training and coaches you need plus getting into big meets that will lead to more money.

If you are running well and are on good terms with Nike then you are well taken of for all your running needs and creature comforts in between.

johnny dangerously wrote:

What doesn't make sense is to sign up for a ROFR for 6 mos after the term. That means that you have to be unpaid for 1/2 a year if you want out. NO ONE should sign that deal.

It only makes sense if the amount of money paid is sufficient to allow an athlete to take a paid six-month vacation. Of course, no company is going to offer a contract to do that.

You realize there are people in the world who are paid on 100% commission (and before the letsrun mob lectures me I know this isn't an employment contract)

Nothing unethical about it. The law presumes that you are going into a contract with eyes wide open.

I think your approach is the correct one but remember we never saw the whole contract.

If you look at the NB contract the incentives were pathetic. It depends on what type of athlete you are. Some want a higher guarantee others want higher performance bonuses.

I think I know which athlete I'd want to sponsor. And just because there is a reduction clause doesn't mean it will be exercised. There are a number of good business reasons not to.

Or they are afraid to be challenged. Injuries are excuses lately.