“Are you ready for some frivolous litigation??”
A Georgia-based, roof replacement company apparently is, and its Complaint filed earlier this month against the NFL’s Jacksonville Jaguars in the Fourth Judicial Circuit in Florida offers lessons for both companies thinking about sponsorship deals with their local professional sports teams, as well as the franchises or team organizations themselves.
According to RoofClaim.com’s complaint, the Jags had tried to get RoofClaim as a team sponsor in the past, to which RoofClaim had apparently responded with something along the lines of “thanks but no thanks”.
Things turned, however, with the Defendant’s splashy hiring of celebrated former Florida and Ohio State college coach Urban Meyer this past Summer. The hiring apparently had enough sizzle to convince RoofClaim to get on board the Jag train and, in August 2021, the two sides entered into a “Jacksonville Jaguars Sponsorship Agreement”.
RoofClaim’s Complaint alleges that during negotiations “RoofClaim.com made it clear that its primary interest in a sponsorship deal was Urban Meyer and further specified that any sponsorship deal would need to be tied to Urban Meyer’s tenure with the team.”
To be sure, the JJSA provided for RoofClaim to have the option to terminate the agreement upon written notice if Meyer ceased being the coach after the “final regular season Team Game of the Third Contract Year…”
However, after just thirteen games, a string of embarrassing incidents both on and off the field for Meyer, and a league worst 2-11 record, the Jaguars parted ways with the controversial head coach.
The Clown Out
As part of a laundry list of Sponsorship Benefits, “Exhibit A” to the JJSA provided for RoofClaim to be allowed “title sponsor rights” to one regular season home game per season. After discussion between the two camps, RoofClaim settled on the January 9th season-ender against division foes the Indianapolis Colts.
Unfortunately for RoofClaim.com, the game they chosen was the one which understandably frustrated Jags fans had tabbed to stage a well-publicized “clown out” for the game, i.e., members of Jaguars Nation were encouraging one another to don wigs, clown makeup, and big floppy red (or teal and black?) shoes both before and during the game in a show of peaceful and (mostly) civil dissatisfaction with the direction of their American football club.
The threat of an imminent clown-out was apparently the last straw for the Georgia roofing company, which filed their lawsuit against the Jaguars organization on January 6, 2022.
Although the Complaint claims the Jaguars “utterly failed to provide the sponsorship benefits outlined in the Agreement” and are “incapable of providing the promised benefits” under the JJSA, RoofClaim.com’s lawyers never actually specify in the filing which of benefits in the contract the Jags refused, or are not able, to deliver.
While the single count lawsuit is ostensibly one for breach of contract, the Complaint instead yammers on at several points about a “toxic environment” surrounding the Jaguars brand and how such an environment has become a “detriment to RoofClaim.com” [Um, have these guys even watched the Jaguars the past few seasons?]
Takeaways from the RoofClaim.com Complaint
Look, I’ve been an Arizona Cardinals fan since 1994 and have endured more than my share of season after season of unwatchable football and so can relate to following a franchise that is a League embarrassment.
But while I do empathize with the Jaguars fanbase and their exercise semi-First Amendment rights, as far as RoofClaim.com’s claims go, this is not a serious lawsuit in my opinion. The jurisprudential version of the “Florida Man”, if you will.
Having read the Complaint and the JJSA, I can’t foresee a way that RoofClaim gets let out of this contract. Although the Complaint seems to tease allegations of misrepresentation on the part of the Jaguars’ representatives during JJSA negotiations, RoofClaim never actually asserts such claims as a formal count, although I suppose an amended Complaint could be forthcoming.
However, actually litigating this thing and winning at trial may not be the ultimate goal here. Rather, it seems to me that RoofClaim is trying to force the Jags into either reducing the time period left in the JJSA or perhaps re-working it to lower the “Annual Fee” owed (RoofClaim has already paid half of the first year, or $300,000, with the balance of the first-year payment due on January 15, 2022). Viewed in that light, escaping or reducing some well-over $2M in Annual Fees over the next three and a half seasons under the deal might actually be worth litigating over.
For businesses considering sponsorship deals like this, it critical that your team not only know what contingencies are critical to you in pursuing the deal but also that you think through as many possible outcomes with those contingencies as you can. Your legal counsel should be able to help you in this regard.
As mentioned above, RoofClaim did, in fact, make provision for termination of the JJSA if Meyer’s employment with the team ended. However, either due to tough negotiation on the part of the Jags or something else, these termination rights don’t actually kick in until after the third season of the deal. Oops.
Now, I’m not going to sit here with my feet up on the ottoman watching this weekend’s first set of Wild Card games and say it is easy to predict the future. Yes, these contractual blindspots are always easier to spot in hindsight. However, as my fellow Cardinals fans can attest, and as RoofClaim.com should’ve been well aware of, firing a coach after or during their first year is not uncommon in the NFL. Not anymore.
Also, while I was not inside the deal negotiations, of course, I think it unlikely that RoofClaim had its hat in hand approaching the Jags about entering into the JJSA. As the Complaint notes, the Jags had been pursuing RoofClaim for sometime it sounds like. In other words, RoofClaim’s bargaining strength was such that they could’ve negotiated the Meyer-employment commitment term down. As the Complaint didn’t note, seriously, it’s the Jaguars…
For the sports teams, both mega-franchises and smaller local professional and semi-pro clubs, they should avoid having their sponsorship deals tied to ongoing employment of any one coach, coordinator or player. If such a connection is unavoidable or a “deal breaker” with that sponsor, consider having the provision be dependent upon and make reference to whatever “morals clause” or similar language is contained in that coach, coordinator, or player’s contract, so at least provide you with an an additional “out” (or, more accurately, an “in” to continue to bind that sponsor to its agreement with the team).
Ironically, in the ultimate on-brand for anything having to do with the Jaguars, the “clown out” game that Sunday turned out to be one of the Jags best of this season to forget, with the Jags shocking their division rival (and helping to toss the Colts out of the NFL Playoff picture)!
And Go Cards!!
Photo “Before the Jaguars-Jets game” by Joe Shlabotnik via Flickr (image cropped)
Ben Bhandhusavee is the Managing Attorney for BHANDLAW, PLLC, a startup, technology, and e-commerce law practice advising founders and management teams on company startup, corporate and technology transactions, e-commerce, as well as Internet privacy concerns. The firm serves corporate and individual clients throughout Arizona, the United States, and internationally. Our offices are conveniently located along the Camelback corridor in Phoenix’s financial district. For more information about our Sports & Entertainment Law practice, feel free to reach out using the contact form on the right or call us at (602) 222-5542 to schedule a meeting. Connect with Ben on LinkedIn or Avvo.