A contract can be described as an agreement enforced legally involving exchange of promises (Hums, 2011). Some of these promises can be services, rights or money. Over the past years sports and entertainment industry has grown rapidly. Due to this growth, a number of agencies have started procuring and negotiating employment as well as endorsing contracts for players, actors and writers (Hums, 2011). This is a kind of business which has developed whereby the agents receive a certain percentage from the playing or endorsement contract. Conflicts normally arise between the involved parties where, in most cases, the people who are hired end up suffering. Thus, it is advisable for the involved parties to consider some things before signing a contract to avoid conflicts which might influence their contracts in a negative manner. This paper will address the negotiation and conflict resolution of sports and entertainment contracts. In this context, an overview of the sports and entertainment contracts will be provided in the background section of the paper. The next section will provide literature review of the subject.
Sports and entertainment contracts in the United States date back to the year 1876. This is also the year when a number of modern games began to develop (Walton, 1998). During this period, private ownership of clubs started and they would hire talented players under contracts. In the twentieth century, the world of sport and entertainment changed fundamentally. There were many changes such as sports becoming a big business and entertainment taking a great step due to the advancement of electronic technology which in one way or another is connected to the entertainment industry. For instance, the invention of sophisticated televisions and radios brought entertainment to the public who appeared to be very interested in these gadgets in this century. In the sporting world many clubs became privately owned and were worth millions of dollars; thus, they had the capability of hiring the best players through contracts. Due to the demand of good players, writers and actors, agency corporations began to develop with an aim of benefiting from the private owners of clubs and entertainment facilities by providing them with highly qualified personnel. The transaction between the three parties normally took place through a contract, and that is what is happening up to today.
Sporting contracts are different from entertainment contracts. There are different types of sports contracts which depend on the role you play in a certain sport. Examples of sport-related contracts include personal service contract and standard representation contract (Hamrick, 2009). Personal service contract has been categorized so due to the fact that the one signing it has unique abilities, skills and talents to offer. It normally specifies the amount of money one should be paid for the services he/she is offering. Standard representative contract enforces the relationship between you and your agent or sports lawyer. This contract specifies the responsibilities of your agent/lawyer and his/her compensation. Unlike sports industry, entertainment industry is regulated by unique laws and thus its contracts are different from that of the sport industry. Entertainment industry has many types of contracts compared to sports industry. Examples of entertainment contracts include: recording contracts, development contracts, production contracts, publishing contracts, trademark and copyright registration, media distribution contracts, screenwriter contracts etc. (Hamrick, 2009).
Conflict resolution alternatives in sports and entertainment
According to Freedman (2003), we cannot run away from conflict as human beings. It is inevitable, but the good side is that it is possible to find an efficient resolution. Alternative dispute resolution (ADR) is a term which is used to refer to modern procedures which are applied to resolve disputes separately from traditional litigation channels. ADR normally falls into two categories: consensual non-binding procedures and binding adjudication. Non-binding procedures involve mediation process which is usually aimed at achieving agreement between the involved parties as well as preserving relationships in the process. Binding adjudication includes arbitration which is supposed to be cheaper and faster than litigation.
Numerous studies have revealed that business professionals and a number of lawyers are unable to differentiate mediation and arbitration. According to Freedman (2003), the two terms are confusing because in early days, during the development of English language, they were used interchangeably. This confusion is further enhanced by two organizations which use mediation in their title; yet, their main function is to promote arbitration. The two organizations are: The Federal Mediation and Conciliation Service, and The National Mediation Board (Hums, 2011).
Conciliation is another form of resolving conflicts. By choosing this alternative, players and organization may have a positive relationship. In conciliation, a third person is involved to build a relationship between the parties; that third person/party may or may not be very neutral to the interest of the parties (Moore, 2003). The conciliator contributes in a sense that both parties agreed on establishing the communication and clarifying the misunderstandings.
The next alternative is to use dispute panel. Players or organization use impartial individuals who are trusted by both parties and are supposed to clarify misunderstandings, fill the communication gaps, and resolve the conflict or difference between both parties. The panel reviews conflicting data or facts, or the main issue between the parties, and then concludes and solves the conflict. The main responsibility of this panel is to be fair to both parties and not to be biased towards anyone (Moore, 2003).
Facilitation is also a technique used in resolving conflicts. In this technique, information flow is improved between the parties, and it is used in decision-making meetings. Here the main player is the facilitator. Facilitator is the person who improves the resolution process by listing all factors to both parties and then suggesting some points which can facilitate dispute resolution process. This technique is good to use when there is no big difference in the opinion of both parties and emotions are low.
Fact finding is one of the best methods to resolve a conflict. In this alternative, impartial group of experts is hired or selected to find the real facts and reasons of the disputes. The higher authorities appoint those experts. Their opinion is a trusted one and impartial and is of great importance to the parties (Moore, 2003). Those experts usually do not resolve the conflict but find the reasons and facts behind it. The main task of this group of experts is to find the correct or actual facts and not to mislead them.
Interest-Based Problem-Solving can be applied where the conflict is realized to be one sided. In this alternative, the conflict can be resolved by improving relationship between players and organizations. This procedure separates the person from the problem and explores all the interests to define the issues. The main factor in this alternative is trust as a common theme for both parties.
Mini trials are also essential in resolving conflicts. This alternative contains the structured settlement process. Both parties give mini trials and provide summaries of cases before the final decision of the committee resolves the issues. The reason behind this mini trial is that the judgment makers are fully informed about the merits of the case and those of the opposing parties.
Negotiations tactics are very important in resolving conflicts. This section will discuss some of such tactics which can be used to resolve conflicts in sports and entertainment industry. One of the negotiation tactics is ‘trial balloon’. It means trying to give a final solution and see the reaction of the other party. If they resist harshly, then move on or find any other way out. In other words, it is trying other’s flexibility in particular conflicts. The other option is to give only one solution and ask to take it or leave it because there is no other option. This is an autocratic style, but this may resolve the conflict. If player or organization wants to continue, they can; otherwise, they move on and find another contractual agreement (Fishof & Shapiro, 1983).
Another tactic to resolve conflict between player and organization is that one party can find the logics and leading question to convince the other party. This is a very useful tactic as it has very good significance in conflict resolution. Deadline can be used as a tactic to resolve conflict whereby the conflicting parties are given a certain time. For example, player tells the organization to increase his/her incentives within this month; otherwise, he/she is going to leave contract as there is another offer (Maddux, 1995).
Types of contracts
Sports and entertainment contracts are different. Examples of sports contracts include personal service contract and standard representation contract (Hamrick, 2009). On the other hand, examples of entertainment contracts may include: financing agreements, production contracts, protection of intellectual property, recording contracts, copyright and trademark registration, publishing and licensing agreements, screenwriter contracts, royalty, media distribution contracts and publishing contracts (Hamrick, 2009).
Player associations and WGA
NBA, NFL, Vanguard Records studio group etc. are some famous associations of players. Writers Guild of America Strike (WGA) took place in November of 2007 and ended in February of 2008 (Walton, 1998). This strike was by Writer’s Guild of America West and East. The labor unions of WGAE and WGAW are the presenters of film, radio and televisions in the USA. Twelve thousand writers joined the strike. The strike was for the escalation of monetary compensation for writers in contrast to the large earnings of the studios.
The first basic dispute in any sports or entertainment industry is salary dispute. When any organization hires a player for any purpose, the first thing, which is discussed, is salary and other incentives (Mayer, 2009). In other words, we can say that organization concerns with as low salary as they can, and a player wants as high as he can get. Therefore, conflicts start from here.
Another major dispute concerns the bonuses. The players concern with some extra incentives on different occasions or any high performance in their sport. At that point, an organization has to pay money in terms of bonus; thus, they have their own considerations at that matter, and conflict or dispute arises.
The most common conflicts that arise between involved parties are the Contractual Terms Disputes. When an organization hires a player, it is the legal contract, and there are lots of terms and conditions by violation of which one party has to face legal issues. In the contract, there is a chance that one party does not agree with a term.
Discipline issues are also a matter of concern when we come to player-organizational disputes. We all know that players are free lancers; they resist restrictions and organization has to treat them accordingly. However, this is the most difficult issue to be handled by organization and a conflict arising party.
Recommendations for Future Positive Relationship between Players and Organization
The following are some recommendations which can improve the relationship between the players and the organizations, thus reducing conflicts;
- Whenever an organization or a player signs a contract, all the clauses should be clear, and terms and conditions should be defined clearly and by mutual understanding. In other words, there should be no ambiguity in the contract.
- There should be a monetary body which monitors both parties, player and organizations, and intervenes between them if any conflict arises. This should reduce the autocratic style of the organizations and lower the player’s power by which both parties exploit each other (Rosner & Shropshire, 2004).
- Sometimes, conflicts arise on the issues of unfair or demand of the excessive bonus. For example, if player performs well then he/she demands for bonus, but there is a question of who will decide the reasonable bonus or incentive (Cozzillia, 2007). Therefore, to avoid that issue, this should be pre-decided when the contract is signed.
The literature review section has highlighted a number of issues associated with negotiation and conflict resolution in sports and entertainment. Some of the issues discussed include: conflict resolution alternatives in sports and entertainment, negotiation tactics used to resolve conflicts in sports and entertainment industry, types of contracts found in these industries, player associations and WGA, and player-organization disputes. Also, there were given some recommendations which can help in improving the relationship between the players and the organizations.