Oakley suing Rory for not considering their counter offer

**Valleygolfer** · January 3, 2013

http://sports.yahoo.com/blogs/golf-devil-ball-golf/report-oakley-sues-rory-mcilroy-nike-over-breach-204614013--golf.html

Oakley is complaining that Rory and agent ignored their counter offer of $60 million vs Nike's reported $200 million. Hmm I wonder why.... I guess they must have some ground to stand on for a big company like Oakley to file this type of suit...

**RonTheSavage** · January 3, 2013

Ummmmmm.......Lol. Thats exactly what he shouldve done.

***iacas*** · January 3, 2013

Originally Posted by Valleygolfer

Oakley is complaining that Rory and agent ignored their counter offer of $60 million vs Nike's reported $200 million. Hmm I wonder why.... I guess they must have some ground to stand on for a big company like Oakley to file this type of suit...

They had the right of first refusal or the first match option or something. The Oakley contract is not for clubs, so $60M might have been plenty to match the apparel portion of the Nike contract.

I posted this news in the Cink thread... December 17 is the date on the article.

**CanuckAaron** · January 4, 2013

Originally Posted by iacas

They had the right of first refusal or the first match option or something. The Oakley contract is not for clubs, so $60M might have been plenty to match the apparel portion of the Nike contract.

I posted this news in the Cink thread... December 17 is the date on the article.

Yeah, but I doubt they (Nike) would let Rory wear anything other than Nike apparel if they are shelling out that kind of money.

**KrazyTrain18** · January 4, 2013

Like stated above, Nike wouldn't allow Rors to wear Oakley, to the average viewer if McIlroy took that deal and they saw him on TV, they'd have no idea he's playing Nike clubs.

**newtogolf** · January 4, 2013

Rory should fire his agent (he might have already) for cutting such a deal with Oakley. Right of first refusal handcuffs him and makes future negotiations with other sponsors more difficult, as he's now finding out. I'm sure a court won't rule against him but it's a hassle he didn't need.

**Deryck Griffith** · January 4, 2013

Nike's investment in Rory is a long term plan for them. Considering Nike's size, love for top athletes and experience in similar lawsuits in the past with other athletes, I'm pretty sure that they will settle this with Oakley behind the scenes, no matter what the cost.

***iacas*** · January 4, 2013

Originally Posted by newtogolf

Rory should fire his agent (he might have already) for cutting such a deal with Oakley. Right of first refusal handcuffs him and makes future negotiations with other sponsors more difficult, as he's now finding out. I'm sure a court won't rule against him but it's a hassle he didn't need.

I think that contract was one negotiated by the guy he already fired: Chubby Chandler.

And to the others, the lawsuit is about exactly that: what Nike would and wouldn't allow. If the valuation of Rory wearing Nike clothes is $5 or $5M or $500M, Oakley had contractual rights to be allowed the opportunity to match. They were denied those rights, and are suing.

It may be up to a court to determine how much of the $200M contract (even that's a rumor) the apparel side of it is worth, and once that value is assigned, Oakley can match the offer and Rory would be contractually obligated to wear Oakley apparel. Nike will try to do all they can to make that portion of the contract seem like it's worth the most they can, and Oakley will try to make it as little as possible. But let's say it's valued at 10%, and the $200M is accurate. Oakley can match the $20M and keep him. And Nike could counter-offer by saying the apparel deal is worth $50M because they think Oakley can't afford that, but they'd have to up their whole deal to $500M since the court would have already decided that apparel is 10% of such a contract.

Nike was stupid. They probably could have avoided all of this by courting Rory to an apparel contract only, then once that was signed (because it was too expensive for Oakley), they could have added an equipment contract for $1M or something after the fact. Oakley would then have to prove that they colluded the whole time, and if that discussion was never written into a contract or an email or recorded, they'd have a hell of a time proving that.

And Deryck is probably right - Nike will probably settle, and if you're Oakley, you may have lost Rory, but you've gained some press AND a few million bucks that you now DON'T have to spend on anyone.

**Valleygolfer** · January 4, 2013

Probably why the announcement is being delayed. Nike does not have the right to see previous contracts and if they were told he was free and clear to pursue, Nike probably didn't think twice about it. I am sure the contract could easily be structured to say $100 mil is for apparel considering most of Nike's revenue is apparel. This just costs Rory time and irritation and lawyer fees and if it is not his fault it will cost his agent lawyer fees instead.

**newtogolf** · January 4, 2013

Rory probably had to sign a waiver as part of his agreement with Nike to ensure Nike that he wasn't bound to any other contract and was free to sign on with them. I suspected this was a deal Chubby Chandler did while he managed Rory but wasn't sure. Nike may eat the legal fees but I'd assume Rory is going to be on the hook for some pain here as he and his new agent should have been aware of the terms in their agreement with Oakley before they signed a deal with Nike.

As an employer, I require full disclosure from any prospective employee that they are not under an employment contract, non-compete, etc before they sign our offer letter to avoid any legal actions and expenses.

Oakley may be happy with some cash and press but my guess is they make Nike pay big money to get him out of this deal since he is the #1 golfer in the world right now.

Quote:

Probably why the announcement is being delayed. Nike does not have the right to see previous contracts and if they were told he was free and clear to pursue, Nike probably didn't think twice about it. I am sure the contract could easily be structured to say $100 mil is for apparel considering most of Nike's revenue is apparel. This just costs Rory time and irritation and lawyer fees and if it is not his fault it will cost his agent lawyer fees instead.

***iacas*** · January 4, 2013

Originally Posted by Valleygolfer

I am sure the contract could easily be structured to say $100 mil is for apparel considering most of Nike's revenue is apparel. This just costs Rory time and irritation and lawyer fees and if it is not his fault it will cost his agent lawyer fees instead.

It is his fault in the eyes of the law.

And I agree that they could have structured the contract differently BEFORE, but they have likely lost the right to make up the terms and assign them percentages now because it would be easy to say they're only doing that to ensure Oakley can't match.

The BAG matters a lot in golf too, as well as the rights to the player's name and image - and those don't include apparel (Titleist ads often feature guys wearing a PING hat or something, but because they play a Titleist ball, Titleist can use their name and image).

**WWBDD** · January 4, 2013

Reason enough to not buy their crappy shades.

**boogielicious** · January 4, 2013

Well, they make great shades, so that shouldn't be the reason. This is business and contract law. His agent and lawyers should have known better. Maybe it would be better for Rory to get new representation.

**Valleygolfer** · January 4, 2013

Originally Posted by iacas

Quote:

Originally Posted by Valleygolfer

I am sure the contract could easily be structured to say $100 mil is for apparel considering most of Nike's revenue is apparel. This just costs Rory time and irritation and lawyer fees and if it is not his fault it will cost his agent lawyer fees instead.

It is his fault in the eyes of the law.

And I agree that they could have structured the contract differently BEFORE, but they have likely lost the right to make up the terms and assign them percentages now because it would be easy to say they're only doing that to ensure Oakley can't match.

The BAG matters a lot in golf too, as well as the rights to the player's name and image - and those don't include apparel (Titleist ads often feature guys wearing a PING hat or something, but because they play a Titleist ball, Titleist can use their name and image).

By meaning "fault", the representative responsible to protect his interests dropped the ball and not a executive decision by Rory to say screw them I am moving forward anyway. It does fall on Rory either way but his agent/lawyer whomever is responsible to read the contracts and give him advice in his best interest may have to eat a bit of crow on this.

**boogielicious** · January 5, 2013

My wife is an attorney. It is never the client's fault. They are ultimately responsible because they sign, but you get fired very quickly for mistakes like this.

**bubble** · January 5, 2013

does'nt rory have the right to say no even if oakley's offer is higher in finance ?

I mean he might have the right to be a human being and have a personnal preference not ?

If oakley invested 300 grand into photos without certainty that he would renew his contract thant they are just plain stupid anr'nt they ?

from were I live this lawsuit seems so stupid and so far from human rights that it looks only like a viralmarketing strategy from oakley to get press headings.

**newtogolf** · January 5, 2013

Someone in Rory's camp messed up and allowed him to sign the agreement. The clause provides Oakley the right to match any offer he receives in order to retain his services, the purpose of the clause is to ensure Oakley has the right to protect their investment in marketing the player and their products.

A court may offer Rory relief from the agreement if he can demonstrate that he will be harmed in some way beyond the financial terms of their specific agreement, i.e. such an agreement would prevent him from signing a more lucrative contract with Nike because they require he represent their apparel and equipment. Unless Oakley wishes to retain an unhappy client, they will likely settle after Nike reimburses them for most of their past investment in Rory.

Bottom line is don't sign a contract without reading it and ensuring you are willing to abide by all the terms of it.

Originally Posted by bubble

does'nt rory have the right to say no even if oakley's offer is higher in finance ?

I mean he might have the right to be a human being and have a personnal preference not ?

If oakley invested 300 grand into photos without certainty that he would renew his contract thant they are just plain stupid anr'nt they ?

from were I live this lawsuit seems so stupid and so far from human rights that it looks only like a viralmarketing strategy from oakley to get press headings.

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