The dotted line: examining the evolution of athletes’ contracts

As the amount of money sloshing around the sports industry, from player remuneration to sponsorship and broadcast rights fees, has risen, so too has the need for specialist legal expertise. Using Ayrton Senna’s 1987 and 1988 contract with the Lotus Formula One team as a base, SportsPro invited leading sports lawyers to examine the evolution of athletes’ contracts over the past 25 years.

As the amount of money sloshing around the sports industry, from player remuneration to sponsorship and broadcast rights fees, has risen, so too has the need for specialist legal expertise. Using Ayrton Senna’s 1987 and 1988 contract with the Lotus Formula One team as a base, SportsPro invited leading sports lawyers to examine the evolution of athletes’ contracts over the past 25 years.

Ayrton Senna’s 1987 and 1988 contract with Lotus was recently made publicly available online by the Legacy Tobacco Documents Library, a University of California resource charting the growth of the tobacco industry. In step with many Formula One teams of the day, the Lotus team of 1987 was funded largely through tobacco dollars; it was the first year of the team’s new title sponsorship agreement with RJ Reynolds, the result of which was the distinctive yellow Camel colours dominating the cars’ livery.

It is rare for a document such as this to be made publicly available – “a little piece of gold” was how one sports lawyer described this document to SportsPro, while another admitted “it wasn’t worth your life” to publicly disclose any sort of confidential legal agreement – and even if this one is 25 years old, it provides a glimpse into how contracts of the day were negotiated.

First, some context: the Senna of 1987 was considered a rising star of Formula One. This contract, which runs to 19 pages, was the renewal of a deal the Brazilian had struck with the team for the 1985 and 1986 seasons. In 1985, Senna had scored the first of his 41 Formula One victories on the way to fourth place in the world championship. He was fourth again in 1986. As this agreement was negotiated, he was still two years away from the move to McLaren which paved the way for his three world championship seasons.

For Lotus, 1987 was a year of change. The team switched from Renault to Honda power and attracted RJ Reynolds as a new investor after another tobacco firm, John Player & Sons, took away its famous black and gold branding in ending its sponsorship at the end of the previous year.

“Senna was apparently renowned for negotiating hard,” notes Anil Matharu, a senior sports lawyer at Harbottle & Lewis who SportsPro asked to cast his eye over the archive contract. “But the 1987 contract doesn’t appear to have been heavily negotiated, or at least if it was, Senna and his representatives settled for some key points, such as number one driver and a number of concessions regarding his right to do personal sponsorship activities.”

Harbottle & Lewis has acted for three of the major title sponsors in today’s Formula One – Vodafone, Infiniti and Philip Morris – and for the likes of the England cricket team and Chelsea FC.

“I think if we saw a contract like this today it would be slightly more balanced; there would be more stipulation in terms of what the team has to do in terms of its general duty of care towards the driver,” continues Matharu. “I don’t think, bar one or two significant areas, that the format of this contract from ’87 to a typical player contract now has changed dramatically. But there are some aspects of Senna’s contract which are quite specific to how Formula One is run, as opposed to a player contract in a true team sport such as rugby or football.”

To continue reading this article, open up the full digital version of the December/January 2014 magazine feature below:

 

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