Zion Williamson lawsuit: Analyzing latest developments in case
The multi-court litigation involving New Orleans Pelicans rookie forward Zion Williamson and his former marketing representative, Prime Sports Marketing president Gina Ford, now threatens Williamson with more than $200 million in potential damages. The litigation also continues to raise questions about Williamson’s business arrangements prior to, and during, his time at Duke University from 2018-19.
As detailed in previous SI legal stories, Williamson signed a five-year contract with Prime Sports on April 20, 2019. This was five days after Williamson had declared for the 2019 NBA Draft. The contract called for Ford to serve as Williamson’s marketing representative, meaning the person who would represent Williamson in endorsement negotiations. At no time was Ford Williamson’s player agent (i.e., the person who negotiates his NBA employment contract).
Over the following month, Ford negotiated on Williamson’s behalf with a wide-range of companies and brands. They included Mercedes-Benz, EA Sports and Puma. However, by the end of May, Williamson decided to fire Ford and replace her with agents from CAA. CAA would then represent Williamson in both endorsement opportunities and in his employment contract.
The central legal question is whether Williamson unlawfully breached his contract with Prime Sports by firing Ford and, if so, how much money Williamson owes Prime Sports (Ford) as result. Ford stresses that the marketing contract could only be terminated “with cause,” meaning on account of a serious mistake, such as breaking the law or willfully ignoring a contractual requirement. Ford contends that she made no such mistake and therefore Williamson couldn’t breach the contract without paying her considerable damages. The damages would reflect Ford’s right to a 15% commission on endorsement deals potentially signed by Williamson over the five-years of the contract.
Meanwhile, Williamson maintains the marketing contract was invalid from the start since it did not—as required by North Carolina’s Uniform Athlete Agent Act (UAAA)—provide him with the requisite warning. Under the UAAA, a contract must alert a student-athlete that by signing, he or she would forfeit remaining NCAA eligibility. There was no such warning in the marketing contract. It’s debatable whether Williamson forfeiting his remaining NCAA eligibility was meaningful. There was no question that Williamson was headed for the NBA.
Williamson has sued Ford in U.S. District Court for the Middle District of North Carolina, while Ford has sued Williamson and a group from CAA for more than $100 million in Miami-Dade County Circuit. Absent a settlement, both cases will likely continue through 2020 and into 2021.
There have been two important developments over the past several days that highlight how the litigation is spiraling into new directions.
Sports Illustrated has learned that last Friday, Ford countersued Williamson in North Carolina federal court. She demands that Williamson pay her at least $100 million in damages. Ford’s countersuit contains claims for breach of contract, breach of the implied duty of good faith and fair dealings, fraud and misappropriation.
Ford maintains that Williamson, along with his mother, Sharonda Simpson, and stepfather, Lee Anderson, “knowingly, voluntarily, intelligently and strategically” evaluated marketing firms and decided that Ford, who negotiated contracts for Usain Bolt and Kevin Durant’s mother, Wanda Durant, was the best person. Ford also contends that Williamson willingly relinquished his status as a student-athlete. He allegedly did so by, among other things, signing with Ford, accepting benefits without NCAA authorization and declaring for the NBA draft with no intention to return to Duke. Ford further maintains that Duke head coach Mike Krzyzewski was on notice from the NCAA that his players could forfeit their eligibility by engaging in any one of many acts deemed NCAA-impermissible. Thus, Williamson should have been on notice, too. These arguments are intended to convince the court that Williamson was already a pro by the time he signed with Prime Sports and thus wasn’t protected by the UAAA.
Second, last Wednesday, Ford’s attorneys filed a request of admissions to Williamson as part of the Miami case. The admissions are designed to get Williamson to admit that he wasn’t owed protection under the UAAA at the time he signed with Prime Sports.
To accomplish that goal, Ford’s attorneys would like Williamson to admit that he had already violated NCAA rules. Therefore, the request asks that Williamson admit he:
• Knew that his mother and stepfather had demanded and received gifts and economic benefits from persons acting on behalf of Duke to influence him to attend Duke.
• Knew that his mother and stepfather had demanded and received gifts and economic benefits from persons acting on behalf of Nike to influence him to attend Duke.
• Knew that his mother and stepfather had demanded and received gifts, money and economic benefits from persons acting on behalf of Adidas to influence him to wear Adidas shoes.
• Accepted benefits from a NCAA-certified agent that are not expressly permitted by the NCAA legislation between Jan. 1, 2014 and April 14, 2019.
Williamson would be under oath in admitting or denying those statements, meaning (at least in theory) he could be charged with perjury if he knowingly lies. If Williamson admits to any of the statements, Ford could more credibly argue that Williamson was already NCAA-ineligible by the time he signed with Prime Sports on April 20, 2019. As explained above, the key to the Ford winning the case—and potentially being awarded a massive civil judgment—is Williamson being unable to escape the contract without paying damages for breach. The UAA would seem to protect Williamson, but only if he was a student-athlete as that term is understood by the NCAA.
Of course, there would be other interested parties should Williamson admit that he attended Duke while in violation of NCAA rules or admit that Duke somehow broke NCAA rules in recruiting him. For one, attorney Michael Avenatti might feel vindicated. Avenatti, who is currently in prison after being convicted of attempting to extort Nike of up to $25 million, insists that Nike paid Simpson for “bogus consulting services” as part of an effort to convince Williamson to play at Duke, which is sponsored by Nike. Avenatti more broadly asserts that Williamson’s matriculation to Duke was fraudulent.
Of potentially greater to concern to Duke would be if the NCAA takes a closer look at the recruiting of Williamson while he played high school ball at Spartanburg Day School. Last September, Duke announced the findings of a five-month internal review into Avenatti’s claims. The school found that no recruiting violations occurred. Obviously, a university is not a neutral party when it investigates itself. At the same time, as an NCAA member school, a university is aware that the NCAA will expect a credible and thorough probe. The NCAA could take a closer look into possible influences on Williamson’s college decision.
Don’t expect Williamson to answer Ford’s requests anytime soon. His attorneys will undoubtedly object to the lawfulness of the requests and, at a minimum, delay the timeline in which Williamson would have to provide answers. Williamson’s attorneys might argue the requests are designed not to uncover relevant evidence but rather to embarrass Williamson. They might further portray the requests as thinly-veiled attempts to nudge Williamson into agreeing to a settlement before he has to go on the record. In response, Ford’s attorneys would maintain that the information they seek is relevant to whether the marketing contract is enforceable.
The most likely path for the litigation remains that the two side will reach a settlement long before the litigation could possibly threaten the reputations of Williamson, Nike, Adidas, Duke and other high-profile parties connected to the 19-year-old phenom.
Michael McCann is SI’s Legal Analyst. He is also an attorney and Director of the Sports and Entertainment Law Institute at the University of New Hampshire Franklin Pierce School of Law.