Brent Randall is a JD candidate at the University of Ottawa.
Proactive Sports Management Ltd., the former agency of English soccer star Wayne Rooney, was recently granted leave to appeal a decision of the High Court regarding the payment of commissions from an image-rights agreement between Proactive and Mr. Rooney.
Although Mr. Rooney ended his relationship with the group, Proactive argued that they should still be entitled to their 20% commission from those endorsements and advertising deals negotiated when he was a client of their agency. Based on Mr. Rooney’s age at the time of agreement, 17, lack of familiarity with the legal implications of the contract, as well as the relatively long term and high, unchanging, commission rate, Judge Hegarty QC originally ruled that the image-rights agreement was unenforceable. Lord Justice Ward, for the Court of Appeal, granted leave to appeal Judge Hegarty's decision.
Lord Justice Ward referred to the 1974 decision of Lord Reid in A Schroeder Music Publishing Co. v. Macaulay, in finding that the doctrine of restraint of trade should be more narrowly applied than in the High Court’s decision. As Lord Reid stated in Esso Petroleum Co. Ltd. v. Harper’s Garage, which set the precedent followed in Schroeder Music, “[i]n general, unless a contract is vitiated by duress, fraud or mistake its terms will be enforced though unreasonable or even harsh and unconscionable…”
What is particularly interesting in Lord Justice Ward’s decision on the application for leave are his remarks on commission owed to agents from those image agreements negotiated prior to an agency losing its client, stating “[i]t seems to me to be arguable that, although the applicant would have ceased to provide any services to the client after determination of the agreement, the commission is nonetheless payable for the service [the agency] did provide to secure the particular contract…”
While this case is primarily a contract dispute, this statement by Lord Justice Ward, if it is adopted by the court on appeal, could have significant implications for who is entitled to profits made from a client’s image and marketability.
Contracts like the one between Proactive and Mr. Rooney could potentially pay an agent his or her commission indefinitely. Details of the contract in issue must be examined. In this case, if Proactive negotiated lucrative deals for Mr. Rooney that he would not want to end, the agency would effectively continue to make money as long as Mr. Rooney’s name, likeness, and overall good-will, of sorts, remain unchanged.
Closer to home, Dwayne “The Rock” Johnson has recently parted ways with his agent, Darren Statt. This comes shortly after the fifth instalment in the Fast and the Furious series of films, Fast Five, starring Johnson, opened to major box-office success worldwide and reignited his career as an action star. Fast Five marked Johnson’s first appearance in the film series. With news of at least one sequel, and the likelihood of Johnson returning to reprise his role, how might a former agent such as Statt be affected by the proceedings between Proactive and Mr. Rooney? Undoubtedly, Statt had some hand in negotiating Johnson’s role in Fast Five, and the Fast and the Furious series, overall. Like Proactive, Statt could argue that despite no longer having Johnson as a client, he should still be entitled to Johnson’s future earnings from Fast Five and any additional instalments in the Fast and Furious series that Johnson appears in. This also says nothing about what Johnson’s appearance in a successful action film like Fast Five might do for roles offered to him in the future. Should Statt be entitled to some credit if Johnson, based on Fast Five, is offered other lucrative opportunities in the genre? How would such credit even be determined? Parties like Johnson and Statt will be looking carefully at their contracts to answer these questions.
The developments between Proactive and Mr. Rooney could have an impact on the way commissions are paid to agents in the future. Since agents play a key role in helping to shape the perception and ultimate marketability of their client, when does their service truly end? If Proactive wins its appeal, an agent’s service could extend past the end of its working relationship with a client.