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  • Writer's pictureNandan Malhotra

Dynamics of a player-agent relationship in the NBA - Part 2

The Nerlens Noel and Rich Paul Saga

Nerlens Noel, centre for the New York Knicks, sued his former agent Rich Paul and his firm Klutch Sports for breach and misrepresentation of contract, negligence and gross negligence, breach of fiduciary duty and breach of duty of good faith and fair dealing. Paul represented Noel from 2017-2020. Noel, in his law suits, alleged that he lost approximately $58 million in relinquished salary due to Paul’s actions as his agent. Rich Paul is a marquee agent in the NBA; his clientele includes box office players like Lebron James, Anthony Davis, Draymond Green, Zach Lavine, and John Wall, to name a few. Apart from this, he has a long list of NBA players whom he represents. Nerlens Noel was part of this long list. It all started when Noel met Paul at NBA player Ben Simmons’ birthday party in Los Angeles, who is also represented by Paul and Klutch Sports.


At the time Noel was in his contract and was offered a contract worth $70 million over four years by the Dallas mavericks, Paul advised Noel not to accept that contract and told him that “he was a $100 million man”. Noel thought that Paul could land a max deal for him and subsequently signed with Klutch Sports, firing Happy Walters of Catalyst Sports and Media. On the advice of his new agent, Noel turned down the four-year, $70 million contract in favor of a one-year qualifying offer worth $4.1 million. The contract was titled “National Basketball Association Uniform Player Contracts” (“the Dallas UPC”). Paul recommended Noel to seek a max contract in the following year’s free agency market. At the time (2016), Noel was only averaging 8.5 points, 6.8 rebounds, and 1.1 blocks per game. Paul charged 4% of the value of the contract as his compensation. In December 2017, Noel suffered a thumb injury and had to undergo surgery to repair the torn ligament in his thumb. As a result, Noel only played 30 games of the season and was forced to miss 42 games due to the injury. During those 30 games that he played, his statistics reached career lows in all categories, and he finished the season with 4.5 points, 5.6 rebounds and 0.7 blocks per game while playing only 15.7 minutes per game. Noel had a rough season dealing with his injury.


Contracts and agent commission


After the season, Noel did not receive any good offers, and he alleged that there was no implementation of a strategy to help Noel secure a long-term contract by Paul or anyone from Klutch Sports. He also alleged that he ended up signing a two year minimum deal with a player option in the second year with Paul George and Russell Westbrook led Oklahoma City Thunder (OKC), only after both of them recruited Noel. There was no work done by Paul and Klutch Sports. Nevertheless, Paul went on to receive his 2% intermediary compensation for the deal. Noel played well in his limited role during the 2018-2019 season. As advised by Paul, Noel declined his player option for the following season and entered the free agency market where again no work was done by Paul and he ended up signing one year league minimum deal with the OKC and Paul received his 2% intermediary compensation. Noel alleged that he received information regarding Paul’s breach of duty, as he did not receive calls from team representatives who were interested in signing Noel. In 2020-2021, the newly elected President of Basketball Operations for the New York Knicks, Mr. Leon Rose, contacted Noel in aspiration of signing him. In November 2020, Noel signed a one year Uniform Player Contract with the Knicks worth $5 million. By the time Noel signed his contract with the Knicks, his relationship with Paul was on the brink of despair. In December 2020, Noel terminated his relationship with Paul and Klutch Sports and signed with George Langberg of the GSL Sports Agency. The 2021-2022 season turned out to be a great year for the Kicks organisation, as the team qualified for the playoffs after eight years. Noel being the defensive anchor of the team, signed a three-year deal with the Knicks worth $27.7 million.


The responce


In October 2021, Rich Paul filed a motion to dismiss the lawsuit at the Texas Northern District Federal Court, stating that the Dallas County District Court lacks jurisdiction over the matter and that the matter should be adjudicated by National Basketball Players Association arbitration as per the terms of Standard Player Agent Contract. Paul claimed that Noel is yet to pay his arrears of 4% for the New York Knicks deal negotiated by Paul in 2020. In the motion to dismiss, Paul also asked for the removal of Klutch as a party to the suit. As per NBPA rules governing Player Agents, only individuals, and not corporations, can be certified as agents. Paul has also filed a grievance complaint against Noel for the non-payment of his intermediary compensation with the NBPA.


In response, Noel has filed his grievance with the NBPA and initiated arbitration proceedings against Paul for breach of contract, breach of fiduciary duty, negligence, and gross negligence. Currently, the arbitration proceedings are pending and shall be presided over by NBPA arbitrator and retired Judge Richard Levie.


Conclusion

The NBA has had numerous players who, after a decent season, bet on themselves, reject a lucrative offer, and then sign a short-term deal in hopes of landing a max deal the following season. This situation turns out well for a superstar-calibre player such as Kevin Durant. He signed multiple one-year deals with the Golden State Warriors to increase his chances of winning a championship, which he was able to accomplish by winning two titles in his three year tenure with the team. Kwahi Leonard, a small forward for the Los Angeles Clippers, tore his anterior cruciate ligament (ACL) but was still able to sign a max deal because of his superstar stature. When a non-superstar player bets on themselves after a decent season, it mostly goes against them. Players like Dennis Schroeder, Nerlens Noel, Victor Oladipo, and DeMarcus Cousins who bet on themselves but due to injury or poor performance have 'fumbled the bag'. In my opinion, non-superstar players, rather than betting on themselves, should try to get a long term deal and 'secure the bag' because, as an athlete, you never know what the future holds. Athletes should not let injuries and poor performance in a single season hinder their contract situation. An athlete's prime is very short lived; thus, their priority should be to make as much money as possible during their prime.


From a poaching stand point, the league needs to set up new rules. In a situation where the rookie player has signed with an agent, the agent will not make any significant money until the rookie’s second contract, and the rookie might fire his agent in the fourth year of his rookie contract (length of a rookie contract is typically four years) and sign with a new agent. The previous agent, who has laid the groundwork for four years for contract negotiation, will not receive any intermediary compensation. A potential solution can be that if a player decides to fire an agent when he is about to hit the free agency market, there must be a spilt of intermediary compensation between the prior agent and the new agent. In order to sustain oneself in this competitive business, one must work in the best interest of the client because, at the end of the day, the bread and butter of intermediaries is in the hands of the athletes.

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