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The Vick Saga: A Personal and Business Tragedy

By Sam Esan

Introduction

We all know that Michael Vick was recently sentenced to do a twenty-three month term in federal prison. [1] Most of us even know why he got the sentence and have made our judgments based on whether we love football, love animals or simply dislike very well paid athletes. [2] In an ESPN poll asking for responses to various questions about Vick's sentence, the results showed that of the 136,898 votes tallied, among other things, 53.4% of the individuals that voted believe Vick's sentence was just right, 72% would not want their favorite team to take a chance on him when he gets out of prison, and 57.8% of voters would not want the NFL to allow him back in the league when he gets out. [3] While many have been blinded by the glitz and glamour that comes with being a professional athlete, some have characterized them as overpaid, spoiled brats that have no concept of what the real world is like. Others respect the amount of time and effort it takes to not only become the best at your chosen sport, but to maintain that edge, that keeps one among world class athletes at the top of their game for anything from a few years to several decades.

The fact is that it cannot be easy to make it as a professional athlete. Apart from the talent and physical attributes required to make it to the professional level of any sport, there are the countless hours in the weight room required to stay in shape and the constant pressure that the athlete must feel because someone is always waiting in the wings to take their job (see Article XIV discussion of the NFL CBA below). There is also the constant scrutiny from the media and fans, the daily (if not hourly) requests for favors (from money to tickets) and probably last but not least, the isolation these individuals must feel that comes from never knowing if family, friends and hangers-on are there because they want something or they are truly people of the afore-mentioned titles.

But I digress, Vick has been criticized countless times for his crimes and now he is paying for it. [4]There are however two questions that come to bear when I consider the Vick situation: first, how did it all go so wrong for such a gifted athlete, and second, from a business perspective; what happens to an owner when your $130 million investment agrees to a plea deal that sends him to jail for twenty-three months? [5]

The Wonder Years

Vick was born in Newport News, Virginia, a depressed port city that has seen its share of good and bad times. [6] His parents struggled but they managed to raise polite and focused Vick. [7] Boddie, Vick's father, put a football in his hands for the first time when he was just three years old and he learned the fundamentals of the game from both Boddie and Aaron Brooks, his cousin, and another future NFL quarterback. [8] It was through following Brooks where ever he went that Vick ended up in the Hampton Roads Boys and Girls Club, where Vick met the club's football coach, James Johnson. [9] Johnson encouraged Vick "to hit the weight room and add muscle to his sinewy frame."[10] By the end of his high school years, Vick was considered one of the top quarterbacks in the country and was highly recruited by colleges all over the country. [11]

Vick eventually settled for Virginia Tech, choosing to be close to family and friends and picking the school that would allow him to play. [12] In Vick's first year at Virginia Tech, one that was supposed to be a rebuilding year, the team went 9-3 although Vick was mostly planted on the sidelines to allow him to develop and learn. [13] In his second year in school, Vick was inserted into the starting line-up and he did not disappoint, taking the Hokies to the Sugar Bowl and passing for 1,840 yards, rushing for 585 more, and accumulating twenty all-purpose touchdowns, eight on the ground and twelve in the air. [14] He attained instant celebrity status, earning First Team All-American by The Sporting News, winning the Big East Offensive Player of the Year and finishing third place in Heisman Trophy voting. [15] It was not long before the National Football League ("NFL") came calling after a successful sophomore year. [16] The twenty year old Vick was the Atlanta Falcons' first round pick and the first overall pick of the 2001 draft. [17]

Within his first several seasons with the team as a starting quarterback, Vick turned the team around from a 5-11 record in 2003, to an 11-5 division winning year in 2004. [18] This impressive turn-around culminated in the Falcons signing Vick to a ten year, $130 million dollar contract extension, with $37 million of that amount in guaranteed bonuses. [19] Both contract numbers were the richest in NFL history, supplanting the previous record $98 million and $34.5 million contract and guaranteed bonuses respectively, that the Indianapolis Colts gave to Peyton Manning the year before. [20] After that season, while Vick continued to improve individually, the team's record went south, going 8-8 in 2005 and 7-9 in 2006. [21]

The Big Bang

Asked his opinion about the dog fighting incident, Dan Reeves, the man who drafted and coached Vick in his first three years, stated that in the time he spent around Vick "you couldn't have asked for a better guy. He worked hard. He prepared well. He listened. I never had any indication he could be around this stuff." [22] The sentiment is echoed by others. [23] James Johnson, his former Boys and Girls Club coach noted that Vick was loyal to his friends to a fault, "sometimes that [attitude] can create extra baggage that you never anticipated." [24] His long time so called friends and family seemed to be the ones always getting his name in the news, including his cousin, who was arrested driving a car registered to Vick. [25] That is, until the 2006 season, when he made the news all on his own by flipping off fans in a losing game and being stopped at a Miami airport for "carrying a water bottle with a suspicious compartment." [26] As an ESPN.com senior writer put it, "the sad thing about Vick at the moment, [b]efore this latest incident, all of his trouble could be filed under the category of silliness. It all could have been avoided with more forethought. Clearly, he couldn't provide that for himself. And while the Falcons claim they didn't coddle him -- "We've been very firm with Michael in terms of what we expect," Falcons owner Arthur Blank said during [a] news conference - the fact is they did exactly that."[27]

What is worse is that Vick could have gotten a lesser penalty from the court for his transgressions, however, when he was supposed to be on a goodwill tour to clear his name from his atrocious actions, he tested positive for marijuana. [28] For this and other misgivings, U.S. district judge Henry E. Hudson threw the book at Vick, giving him two and five more months respectively than his co-defendants, Purnell Peace and Tony Taylor. [29]

The fact remains however, that the federal case is all done. Vick is in prison for the foreseeable future and "Bad Newz Kennelz" will be forever linked with the once prized quarterback of the Atlanta Falcons. The business question then comes to mind; what are the Falcons to do about that $130 million contract they gave Vick back in 2004?

Business 101

Under the NFL Collective Bargaining Agreement ("CBA"), Article XIV requires that all players use Appendix C - the "NFL Player Contract," for all player signings. [30] Specific terms of Appendix C include an "Employment and Services" clause that states that the "[c]lub employs Player as a skilled football player. Player accepts such employment. He agrees to give his best efforts and loyalty to the Club, and to conduct himself on and off the field with appropriate recognition of the fact that the success of professional football depends largely on public respect for and approval of those associated with the game." [31] The contract also includes a "Skills, Performance and Conduct" clause that states "[p]layer understands that he is competing with other players for a position on Club?s roster within the applicable player limits. If at any time, in the sole judgment of Club, Player?s skill or performance has been unsatisfactory as compared with that of other players competing for positions on Club?s roster, or if Player has engaged in personal conduct reasonably judged by Club to adversely affect or reflect on Club, then Club may terminate this contract. In addition, during the period any salary cap is legally in effect, this contract may be terminated if, in Club?s opinion, Player is anticipated to make less of a contribution to Club?s ability to compete on the playing field than another player or players whom Club intends to sign or attempts to sign, or another player or players who is or are already on Club?s roster, and for whom Club needs room." [32]

Last but not least, the contract includes a termination clause that states "[t]he rights of termination set forth in this contract will be in addition to any other rights of termination allowed either party by law. Termination will be effective upon the giving of written notice, except that Player?s death, other than as a result of injury incurred in the performance of his services under this contract, will automatically terminate this contract. If this contract is terminated by Club and either Player or Club so requests, Player will promptly undergo a complete physical examination by the Club physician." [33]

The bottom line here is that an NFL player is essentially an "at-will" employee. The only remuneration the athlete is entitled to, despite the purported $130 million contract, is the guaranteed signing bonus amounts. And as the Vick incident showed, even that supposedly "guaranteed" money is not so guaranteed because the Atlanta Falcons took advantage of Article IX of the NFL CBA [34] and filed a "Non-Injury Grievance" to recover the signing bonuses of approximately $20 million dollars they had paid Vick since signing him the massive 2004 extension. [35] A special master ruled that the Falcons could retrieve all $20 million of the bonuses from Vick because they argued that he had used the money for his illegal activities, however, on appeal, United States district judge David Doty ruled that retrieving the funds would be a violation of the NFL CBA. [36] Specifically, the judge interpreted the CBA as disallowing a club from repatriating roster bonus funds once the amounts had been earned. [37] The judge however held that the Falcons could recover their signing bonus funds of $3.75 million because those are governed by different rules. [38]

Conclusion

The Michael Vick situation is a very unfortunate story. Sadly however, it seems like it is not unusual for professional athletes to get into trouble - insert Kobe Bryant, Ray Lewis, Tank Johnson, Travis Henry and too many others to name. The more unfortunate thing however is the lack of reporting that is done when athletes do good things - insert Dikembe Motombo building a $29 million hospital in his birth country of the Democratic Republic of Congo, with $15 million of the funds coming out of his own pocket. [39] Or Warrick Dunn's Home for the Holidays program that helps single parents with a down payment on a home. [40]

Vick's troubles are far from over, he still has state dog fighting charges to face in the near future [41] and has lost an estimated $122 million in potential revenue: $71 million in salary and $50 million in endorsements. [42] However exceptional his skills are, for now, they have been put on hold while he is forced to face his demons. The Atlanta Falcons may not be out much in terms of payments owed to Vick, it is no surprise however, that while the team's value from 2006 to 2007 has increased from $730 million to $796 million, income is down from a $6.6 million profit to a $3.4 million loss. [43] The bottom line is that a player with those physical skills sells tickets and people pay to see him; that value lost to the Falcons is immeasurable.

Sources

[1] Ed Werder, Apologetic Vick Gets 23-month Sentence on Dogfighting Charges, ESPN, Dec. 11, 2007, http://sports.espn.go.com/nfl/news/story?id=3148549 (last visited, Apr. 3, 2008).

[2] Vote, What do You Think of Michael Vick's Sentence?, ESPN, Dec. 10, 2007, http://proxy.espn.go.com/chat/sportsnation/polling?event_id=3281&action=1&question24384=97493&question24385=97497&question24386=97498&question24387=97513&question24388=97503&question24389=97505&question24390=97511  (last visited, Apr. 3, 2008).

[3] Id.

[4] See Werder, supra note 1.

[5] Id.

[6] Jockbio.com, Micheal Vick Bio, http://www.jockbio.com/Bios/Vick/Vick_bio.html (last visited, Apr. 3, 2008).

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] Id.

[13] Id.

[14] Id.

[15] Id.

[16] Id.

[17] Id.

[18] 2004 NFL Regular Season Standings, YAHOO! SPORTS, http://sports.yahoo.com/nfl/standings?year=season_2004 (last visited, Apr. 3, 2008).

[19] Falcons Quarterback Signs Richest Deal In NFL History, JET, Jan. 17, 2005, http://findarticles.com/p/articles/mi_m1355/is_3_107/ai_n9771537 (last visited Apr. 3, 2008).

[20] Id.

[21] 2005 Regular Season Standings, YAHOO! SPORTS, http://sports.yahoo.com/nfl/standings?year=season_2005 (last visited, Apr. 3, 2008); 2006 Regular Season Standings, YAHOO! SPORTS, http://sports.yahoo.com/nfl/standings?year=season_2006 (last visited, Apr. 3, 2008).

[22] Jeffrey Chadiha, It's Hard To Explain Vick's Bad Choices, ESPN, Jul. 28, 2007, http://sports.espn.go.com/nfl/columns/story?columnist=chadiha_jeff&id=2947882 (last visited, Apr. 3, 2008).

[23] Id.

[24] Id.

[25] Id.

[26] Id.

[27] Id.

[28] Associated Press, Special Conditions Placed On Vick After Positive Marijuana Test, ESPN, Sept. 27, 2007, http://sports.espn.go.com/nfl/news/story?id=3037175 (last visited Apr. 3, 2008).

[29] Associated Press, Apologetic Vick Gets 23 Month Sentence On Dogfighting Charges, ESPN, Dec. 11, 2007, http://sports.espn.go.com/nfl/news/story?id=3148549 (last visited Apr. 3, 2008).

[30] NFL Players Association, Article XIV NFL Player Contract, http://www.nflplayers.com/user/template.aspx?fmid=181&lmid=231&pid=533&type=c (last visited Apr. 3, 2008).

[31] NFL Players Association, Appendix C NFL Player Contract, http://www.nflplayers.com/user/template.aspx?fmid=181&lmid=231&pid=708&type=c (last visited Apr. 3, 2008).

[32] Id.

[33] Id.

[34] NFL Players Association, Article IX Non Injury Grievance, http://www.nflplayers.com/user/template.aspx?fmid=181&lmid=231&pid=517&type=c (last visited Apr. 3, 2008).

[35] Associated Press, Federal Judge Rules Vick Can Keep More Than $16 Million In Bonus Money, ESPN, Feb. 5, 2008, http://sports.espn.go.com/nfl/news/story?id=3229782 (last visited Apr. 3, 2008).

[36] Id.

[37] Id.

[38] Id.

[39] Motombo Set To Open Hospital In Congo, NBA,  http://www.nflplayers.com/user/template.aspx?fmid=181&lmid=231&pid=517&type=c (last visited Apr. 3, 2008).

[40] Warrick Dunn Foundation, Home For The Holidays, http://www.warrickdunnfoundation.org/homes_for_holidays.php (last visited, Apr. 3, 2008).

[41] Associated Press, Vick To Go On Trial On Virginia Dog Fighting Charges In June, ESPN, Mar. 25, 2008, http://sports.espn.go.com/nfl/news/story?id=3310881 (last visited, Apr. 3, 2008).

[42] See Apologetic Vick supra note 29.

[43] See NFL Team Valuations, FORBES, Aug. 31, 2006, http://www.forbes.com/lists/2006/30/06nfl_Atlanta-Falcons_300786.html (last visited, Apr. 3, 2008); NFL Team Valuations, FORBES, Sept. 13, 2007, http://www.forbes.com/lists/2007/30/biz_07nfl_Atlanta-Falcons_300786.html (last visited, Apr. 3, 2008).

Full post as published by The Journal of the Business Law Society on April 11, 2008 (boomark / email).