Corona vs basketball, from a legal standpoint

Agent Misko Raznatovic from BeoBasket has released the following statement about the current situation related to Coronavirus and its effect on basketball’s contracts.

During these difficult times, we are witnessing a great number of conflicting positions between the clubs and the players with regards to the financial and contractual obligations that the clubs have towards their players. These conflicting stances extend beyond just players on one side and the clubs on the other; this is now an issue between various clubs as well as between the players themselves.

As a lawyer and a basketball agent to many of the players affected by this, I feel entitled to give my opinion on this situation especially taking into consideration that I actively participated in negotiations with FIBA during the establishment of Basketball Arbitral Tribunal about 10 years ago. Once BAT was instituted, I was also the first agent ever to try a case in front of the tribunal, subsequently having an enormous number of cases tried since then, so I think that my opinion on this matter can help many who are currently undecided on this issue.

First of all, there is no argument that the current suspension of all championships due to the pandemic falls under the category of unforeseeable circumstances, in legal terms known as – force majeure. Secondarily, there is also no argument that European contracts do not have clauses that regulate these unforeseeable circumstances, making our contracts different from those in the NBA that has a collective bargaining agreement in place.

Therefore, the situation must be resolved in accordance to the general principles of the law but especially important for all contracts that fall under the BAT jurisdiction, it must be resolved in accordance to the principle ex aequo et bono. In other words equality, justice and fairness.

In my opinion, the situation is not that complicated. The players have already earned their seven monthly salaries and that is almost not disputable. All of the focus, discussions and dilemmas are centered around the resolution of the fate of the remaining three salaries, in other words 30% of financial earnings.

The unofficial recommendation of Euroleague clubs to pay 67% of the contract value (in other words to pay only what has been earned) is most definitely not an acceptable solution to this matter because such a proposition puts all of the negative effects and ramifications of the current situation on the players themselves.

Additionally, it is not acceptable to offer as an explanation the fact that clubs have no more income and therefore the players won’t be paid. This proposed solution leaves the players without any income which most definitely, cannot be considered equality and fairness. Further more, the Euroleague unofficial recommendation is the absolute opposite of the ex aeque et bono principle and it can be said that with absolute certainty that it will not be accepted.

Until today, there has been only one case before BAT where force majeure has been cited as a prominent objection. The case was BAT 0529/14 against Lebanese club Champville. BAT took the position that it was fair and just to split the burden of force majeure consequences between the club and the player. Based on this precedent, I am absolutely certain that all of the cases that will be tried in front of BAT will have the same outcome where the negative consequences brought on by force majeure (in this case the corona virus pandemic) will be split evenly between the clubs and the players.

Since we are practically talking about 30% of the value of the contracts,  I am convinced that the damage will be split in equal parts. This means the clubs will have to pay additional 1.5 salaries to the players instead of the three salaries or expressed in percentages it is 15% of the contract. The players, on the other hand, will have to forego the exact percentage of their contracts.

Simply put, the players would be paid the 70% of their contract for the games they played with additional 15% compensation making it a total of 85% of the contract worth.

Having said that, I must point out that even the unofficial information that ELPA will demand 80% is, in my opinion, unsatisfactory and does not adequately represent interest of the players in this situation.

Depending on the specifics of each case, the compensation can amount to even more but in my opinion, it will be very difficult for it to be less than what I have written above, especially when taking into consideration that clubs to not have force majeure in their contracts.

Finally, I am pointing out that this is my professional opinion that is not obligatory but I stand behind it absolutely sure that it is completely in accordance with the principle ex aequo et bono and I expect BAT to take this same position. All of the above remains my point of view unless there is a continuation of the season in some way. Should the season continue, the clubs would be, in my opinion, obliged to pay additional money and most likely fulfill entire contract obligations.

None of the afore mentioned is applicable for the players who do not have the BAT clause in their contracts and whose contracts fall under the jurisdiction of the local legislature.