Corporate & Securities Law

More on Letter of Intent and Release Bargaining

Last month I highlighted the story of DeMarcus Cousins, a blue chip high school basketball recruit who was playing a game of chicken with the University of Alabama-Birmingham (UAB) over signing his National Letter of Intent — the letter that commits a player to attend the university and imposes the penalty of giving up a full year of eligibility if the student-athlete transfers.  Cousins claims that he stayed near home and UAB to play for former Indiana University coach Mike Davis who had allegedly represented to Cousins that UAB would release Cousins without penalty if Davis was no longer his coach.  Cousins has been holding out to try to bargain for this term in his NLI.  Nothing new there — though if anybody has information on the follow-up story there I’d love to hear it.

I came across this story at ESPN on the release of Miami University QB Robert Marve which includes the following detail:

The release comes with conditions that don’t sit well with Marve. He can’t play for teams in the Atlantic Coast Conference, the Southeastern Conference or the state of Florida. It’s not unusual for programs to place restrictions on the deal when a marquee player transfers.

If this sort of ex-post imposition of non-compete conditions on player releases is standard fare, which the article suggests that it is, Cousins’ strategy seems even more reasonable to protect against this sort of hold up with contractual protections ex ante.

Full post as published by Truth on the Market on December 30, 2008 (boomark / email).