The Future of Sports Agency In The Hands Of The Courts

The future landscape of athlete representation could rest on the outcome of two lawsuits filed in Ohio and California. Matthew Baldwin, a little known sports agent, has filed suit against IMG, his former employer, requesting that the court free him from the restrictions stated in his contract with IMG, which prevent him from bringing his clients with him to his new position with CAA. IMG has countersued in Ohio, asking the court to enforce the contract. These restrictions are very common in agents’ contracts, but courts aren’t always willing to enforce a contract that prevents someone from “earning their living.” While this in itself isn’t a big case, it could have huge ramifications down the road. As stated in the Sports Business Journal (Published May 17, 2010),

“Even though Baldwin, who worked for Gary O’Hagan, the head of IMG Coaches, isn’t a big name, the industry is buzzing about the case because it pits IMG, the firm widely credited with inventing the sports business, against CAA, which was built chiefly on the hires of former IMG executives.”

Not only is this an important case because it pits two heavyweights agencies against each other, but many of the top agents in the country have deals set to expire in the next couple of years with their current employers, and the outcome of this case could go a long way in determining whether these established agents could sign a huge multi-year contract with another firm and bring their clients with them. Clients are typically more loyal to their agent than they are to the company who employs the agent, so when an agent changes companies, he/she generally brings the vast majority of their clients with them, immediately boosting the revenue of the new firm. It will be interesting to keep an eye on these lawsuits as well as how they will affect the future of the agency business. Stay tuned…..