Sports management was exposed to a disturbing shift in mindsets over the last week, with news that boxer Vijender Singh, fresh off his recent Bronze medal successes, was en route to appointing Percept as his sports agent. On its own merit, this would be great news, as individual sportsmen would actually have started getting their due. The wrinkle in this situation however lies in the fact that
Vijender is contractually bound to IOS, a sports management firm based out of Delhi, who had signed up Vijender when he was a relative unknown in 2005, for a duration of ten years (until 2015). That Vijender plans to break this contract and sign up with Percept is a more complicated eventuality than it appears at first blush.
Simply put, the opportunities that Vijender is likely to access with IOS will pale in comparison to what Percept could accomplish for him, including but not limited to splashing him across print, online, and television mediums, managing his brand in furtherance of his becoming an ?action sport icon?, and last but surely not least, perhaps envisioning a screen future for the already popular young boxer, with movies and television roles not beyond the realm of possibility. IOS, in contrast, would be likely limited in outreach, scope, scale, and geography. And this would probably be the argument that Vijender?s team will make if it reaches the litigation or arbitration stage, based of course on the dispute resolution mechanism stipulated in the contract.
But this coin has numerous sides. The first real instance of an athlete terminating a contract prematurely was when Zaheer Khan opted to join Globosport some years back and then a couple of years back, ironically enough,
Yuvraj Singh opted to depart from Percept?s fold of sports personalities, and although he was in discussions with Globosport for a whopping contract in excess of Rs 100 crore, he ended up joining his close friend who now exclusively manages his affairs. In both instances, the aggrieved party who had suffered the consequence of early termination found little sympathy in the court of law.
However, when it comes to sports management in India, cricket should usually be exempt from any real comparisons with other sports: even in Zaheer?s and Yuvraj?s cases, the two were already household names, and likely earned their respective agents significant revenue through brand endorsements and other revenue sources. Therefore, although not unprecedented in the literal sense, the situation involving Vijender is in many ways a first. In cricket, the overall adulation and popularity that cricketers enjoy are products of a well-coordinated broadcast, media and social strategy. So representing a cricketer and managing his brand is a question of his building a successful career and letting the offers come to the manager. That is not the case with amateur sports, individual sports or even team sports outside of cricket in India.
Representing a boxer, wrestler, or even a golfer or tennis player is a difficult proposition in today?s nascent sports industry, and IOS would be justified in feeling aggrieved if its star revenue churner defects, especially if, as IOS has said, it has put significant time and resources into building Vijender?s brand. And now, IOS in reality would have gained very little if it loses him at the cusp of his realising his potential.
The problem, however, is that arbitrators or courts are unlikely to see it IOS?s way. The legal argument would be quite simple, beyond the extra opportunities that Percept can provide Vijender. Simply put, a ten year contract, where IOS receives a whopping 60% commission for any revenue that is generated, is likely to be viewed unfavourably by any dispute resolver. It is exploitative. That the sunset clause in this agreement likely comes into effect after the boxer?s career is over would make it even harder to justify. The industry norms are 10-25% commission. And typically there should be a ?best-efforts? or performance threshold clause in these contracts where, if an agent is unwilling or unable to secure lucrative deals for an athlete, he is free to look for alternative representation. Also, one should keep in mind that the Indian athlete is not usually represented by lawyers, and with limited levels of education and legal expertise, it would be hard to bind an athlete on moral and restraint of trade grounds, if it means robbing him of his livelihood and benefits accruing from outstanding performances due to athletic ability.
This is a tough situation, but it?s also a wakeup call to athletes and agents alike, to take the contract drafting and signing process more seriously: as the industry gets sophisticated, so will the dispute resolution. It would bode well for agents and athletes to understand what they are signing, and how it would play out if either one of them or both strike gold (or Bronze, as the case may be). Globally, there are clauses within each sports contract that are based on performance, effort, good-faith and fair-play. This prevents excessive litigation and enhances the chances of the contracts being held enforceable by dispute resolvers. IOS may be down for the count in this particular situation, but it would be well-served, as would its peers, to think of the future when next signing up athletes with potential. A sustainable future, where athletes can?t be poached by the bigger fish the minute they smell the first inkling of success.
The author is a sports attorney at J Sagar Associates. Views are personal