Sports Law

Rich Paul And Klutch Accused Of Stiffing Chief Contract Negotiator Mark Termini

Veteran agent Mark Termini and his company Mark Termini Associates Inc. have initiated a lawsuit against Klutch Sports Group, LLC and Rich Paul in the U.S. District Court for the Northern District of Ohio. The plaintiffs claim that they negotiated more than $1.4 billion in contracts for Klutch clients and they want the commissions they claim are due under a signed agreement as well as an amendment thereto.

The following are some examples provided in the Complaint:

Termini says that, in 2012, Paul asked him to “run the contract negotiations” for Klutch and that Termini agreed to the offer. The arrangement was memorialized by a contract executed on March 17, 2014 even though the effective date of the agreement was December 2, 2012.

Paragraph 1 of the parties’ agreement provided a Schedule of Agent Services fees due to Termini and his company, broken down by certain players already represented by Klutch, and included a catch-all provision that, for all other NBA clients, unless otherwise noted on the contract or in a written exhibit to the agreement, Termini and his company would be due 25% of Klutch’s commission on NBA deals and marketing agreements.

Of course, there was an exception for LeBron James.

The parties agreed that the fees due to Termini and his company would be earned once any client signed a playing or marketing contract and that termination of the parties’ agreement would not alter the obligation to remit commissions due.

There was an initial 3-year Term, with the agreement intended to run from December 2, 2012 through December 2, 2015 and an express statement that any fees earned during the Term were to remain payable to Termini and his company following expiration or termination. However, on March 18, 2016, the parties executed a first amendment to their prior agreement, expressly extending the Term for 5 additional years, beginning on December 2, 2015 (the date that the original agreement was supposed to expire).

The amendment included a provision that made clear Termini and his company are due commissions immediately and in full once a Klutch client signs a playing or endorsement contract, whether or not Klutch decides to waive or defer the payment due from its client.

Problems started arising, according to the plaintiffs, in 2018, when Klutch and Paul unilaterally decided to start paying Termini and his company amounts lesser than what was required under their agreement. The Complaint also alleges that Paul and Klutch violated the exclusivity provision in the agreement by hiring third-party agents to serve in the same role that Termini and his company had worked under on behalf of Klutch clients and that Paul and Klutch refused to reimburse Termini and his company for the expenses incurred related to the services they provided.

Termini and his company say they have been damages in an amount in excess of $4.9 million and demand an accounting from Paul and Klutch.

By Darren Heitner

Darren Heitner created Sports Agent Blog as a New Year's Resolution on December 31, 2005. Originally titled, "I Want To Be A Sports Agent," the website was founded with the intention of causing Heitner to learn more about the profession that he wanted to join, meet reputable individuals in the space and force himself to stay on top of the latest news and trends.

Heitner now runs Heitner Legal, P.L.L.C., which is a law firm with many practice areas, including sports law and contract law. Heitner has represented numerous athletes and sports agents as legal counsel. He has also served as an Adjunct Professor at Indiana University Bloomington from 2011-2014, where he created and taught a course titled, Sport Agency Management, which included subjects ranging from NCAA regulations to athlete agent certification and the rules governing the profession. Heitner serves as an Adjunct Professor at the University of Florida Levin College of Law, where he teaches a Sports Law class that includes case law surrounding athlete agents and the NCAA rules.