The ending of the Arizona Cardinals and Kyler Murray Addendum story holds key lessons for sports teams, brands, and agencies
In this article, Nii considers the key takeaways from the story for sports teams, brands and agents when negotiating ambassador and endorsement deals with athletes/talent.
Introduction
When advising on disputes in the sports and entertainment industry, disputes lawyers almost always advise with the benefit of hindsight – on either the wording of contractual clause(s) or the circumstances giving rise to a dispute.
Broadly speaking, whatever the nature of the dispute, even the best possible outcome for the claimant will:
i) involve a degree of irrecoverable loss, cost or expense – in the form of legal fees, time and energy, opportunity cost; and
ii) represent near-but-not-complete restitution (i.e., restoring the innocent party to the position they would likely have been in had the contract been performed).
Naturally, there will be circumstances in which a wronged person will opt to pursue a dispute notwithstanding the above – i.e., where near restitution is better than simply walking away, or even as a matter of principle or setting a precedent.
Nevertheless, we in the Sheridans Sports disputes team consider providing dispute-preventative foresight just as important as advising on issues in hindsight. To that end, the recent ‘Independent Study Addendum’ controversy involving NFL team the Arizona Cardinals and their star quarterback, Kyler Murray, presents a good opportunity to reaffirm certain principles which sports teams, brands and agencies should not lose sight of in the pursuit of securing talent.
Kyler Murray and the Arizona Cardinals: The Background
The Addendum provided that Murray would (among other things) spend four hours of his own time in each week of the NFL season watching game footage provided to him by the Cardinals. This ought to have been a relatively benign and frankly redundant clause. American Football, perhaps more so than any other sport and in particular at the professional level, requires a great deal of film study[1] to be even moderately successful. Therefore, independent film study is something which Murray will have likely been doing in any event, and far in excess of the four hours prescribed by the Addendum. Murray and/or his team would likely have agreed to the Addendum on this basis.
On 25 July 2022, the Addendum was leaked to the media and the public, which took great interest in it and what it suggested about Murray’s professionalism. Specifically, the Addendum provided that Murray would not receive any credit for independent film study if he was either (a) not watching the footage while it was playing; or (b) he was engaged in another activity on another electronic device while the footage was playing (i.e., ‘playing video games’ – Murray is a member of the eSports and entertainment team/group ‘FaZe Clan’).
After 4 days of backlash, the Cardinals decided to strike through the Addendum stating that “it was clearly perceived in ways [the team] had never intended”[2].
All of which raised a number of questions including, why the Cardinals proposed the Addendum in the first place if it was as dispensable as it later appeared, and why the public’s apparently incorrect perception of the Addendum should have had any retroactive impact on the value of the Addendum to the Cardinals. Those specific questions aside, the fiasco brings to mind a handful of factors for sports teams and indeed brands entering into ambassador or endorsement deals with players or talent to consider.
Takeaways for teams, brands and agents
1. Unequivocal obligations
It is or should be a universal truth that a contractual obligation is only as useful as it is clear, specific and capable of being enforced.
Notwithstanding this, even seasoned negotiators can find themselves with little more than vague obligations to seek to enforce or on which basis to terminate an agreement in the event of non-performance by the counterparty.
In the case of the Cardinals and Murray, while the team would issue Murray with an iPad on which they could in theory track the time spent watching the footage provided, it is not clear how the team intended to practically assess whether Murray was watching or gaming on another device simultaneously.
If a contractual obligation is worth having, then it is capable of being clearly defined, and should be so defined, unless the party to whom it is owed is comfortable with the risk of not being able to either monitor or enforce it, nor terminate the agreement on the basis of it.
2. Confidentiality Protections
Clearly the Cardinals thought the Addendum was desirable and necessary at the time of negotiating Murray’s contract. Therefore, one would assume that the team only agreed to strike through it because it was leaked and because of the public reaction to it. If so, the outcome of the fiasco is that the Cardinals lost a contractual protection only because the contract was not kept confidential.
If a contract contains information which is commercially sensitive or provisions which a party would like to avoid being disclosed, there are options available to the concerned party beyond the standard contractual confidentiality provisions.
For example, contracts can be watermarked or otherwise individually marked to indicate which organisation or individual the copy was created for. In the event of a leak or unauthorised disclosure, the responsible party could in theory be identified from the marking, and the ‘innocent party’ could pursue a claim for breach of contract. The use of this or similar more advanced methods would likely act as a stronger deterrent to unauthorised disclosure but, failing that, would make taking remedial action easier.
An alternative and simpler approach would be to keep the circulation of the contract, or particularly sensitive provisions within it, restricted to only those who need to see it in order for the contract to be performed. This may not be possible in the realm of sports where playing contracts must often be centrally lodged with the governing body. However, the governing body’s right to receive copies of contracts for its approval or simply for its records, will rarely if at all extend to permit it to disclose copies of such contracts.
3. Is the partnership, right?
Finally, if it is necessary to include provisions in a contract to compel the other party to do something fundamental to the optimum performance of the contract, is the partnership (be it employment, ambassadorial, sponsorship or otherwise) right? Is the other party as invested in achieving the deliverables in the contract, and so likely to fulfil their obligations of their own initiative, in a timely manner and without coercion?
In Murray’s case, it can only be reasonably assumed that the Cardinals considered that the Addendum was necessary, and that Murray would not otherwise carry out any independent film study. Ultimately, the Cardinals will have been content to strike through the Addendum because Murray is a unique talent and so is not interchangeable with other quarterbacks. That will be true in the case of sport generally.
However, in the case of brand partnerships and endorsement agreements at least, if there is a risk of lack of engagement by the talent after the contract has been signed (and in some cases money paid upfront), it may be sensible to consider the extent to which that talent is interchangeable. In particular, in the case of brand partnerships, it is arguable that a less famous or prominent talent who may objectively have a smaller ‘following’ than the brand’s ideal target talent is:
(a) more likely to act in the spirit as well the letter of the contract in fulfilling deliverables; and
(b) could on balance deliver greater value; and
(c) ultimately pose less risk of a dispute developing which in hindsight was avoidable.
[1] i.e., watching video footage of the opposing team to identify strengths, weaknesses, or tendencies
[2] https://www.espn.co.uk/nfl/story/_/id/34309612/arizona-cardinals-remove-independent-study-clause-quarterback-kyler-murray-contract