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Wednesday, June 14, 2006
The Legality of Oral Promises by NBA GMs to Potential NBA Draft Picks
Jeff Clark of Celtics Blog e-mails me an interesting topic to consider: oral promises made by NBA general managers to potential draft picks. In these promises, a GM promises a draft-eligible player that if he is still on the board when the team selects, the team will draft him. Here are Jeff's thoughts:
Clearly, oral promises are of great value to the players who receive the promises. Perhaps foremost, a promise indicates a "worst-case scenario" (i.e., at worst, the team making the promise will pick him). Moreover, for some underclassmen, a promise can help them decide whether they should remain eligible for the draft or return to school. The same is true of international players who already earn high salaries playing in Europe: remaining eligible in the draft only makes sense if they are going to be a high enough pick (and thus command a high enough salary). Others will use promises to help determine which teams to workout for--if you have a promise from, say, the Seattle Supersonics, who pick 10th in this month's draft (June 28), then you will probably spend your time meeting with teams picking 1-9, rather than those picking after 10.
Promises also supply important benefits to teams. For instance, they may convince the player receiving the promise to remain in the draft (if that is an issue). Or they may discourage the player from meeting/working out with other teams, thus raising the probability that the player is still on the board when the promising team selects.
And promises have clearly been influential. For example, in the 2003 NBA Draft, Celtics GM Danny Ainge promised high school senior Kendrick Perkins that the team would select him in the first round; without that promise, it is thought that Perkins would have matriculated to the University of Memphis to play for John Calipari. And Ainge kept his promise (by way of a trade with the Memphis Grizzlies). In that same draft, at least two other high school seniors received first round promises--Travis Outlaw (Portland) and Ndudi Ebi (Minnesota)--and those promises were also kept. Interestingly, one of the top high school players in the 2004 NBA Draft who did not receive a first round promise was LaMarcus Aldridge, who, without the promise, removed his name from consideration and matriculated to the University of Texas. Fast-forward two years, and Aldridge is expected to be one of the top three picks in this month's drafts. Brandon Roy--who is also projected to be a top pick--has a similar story from the 2002 NBA Draft. Promises were so influential in the 2005 NBA Draft that Sports Illustrated Ian Thomsen's recap of it was entitled "Behind the Curtain: Promises, Surprising Picks Quietly Shaped '05 Draft." In this draft, it is thought that international player Tiago Splitter won't stay in the draft unless he obtains a promise from a team picking in the lottery (apparently, the buyout in his European contract is too costly to take mid to late 1st round money).
But what happens when a promise isn't kept? And has that ever happened?
First off, I'm unaware of an instance where an oral promise to a potential draft pick was broken, although in a recent interview with the Portland Oregonian, Portland Trail Blazers President Steve Patterson said, "There can be promises that just don't work out to be so guaranteed." I'm not sure whether Patterson is alluding to broken promises in the past or the potential for broken promises (he was discussing Tyrus Thomas), but other than his statement, everything I've read suggests that teams do, in fact, fulfill their draft promises. However, if you know otherwise, please contact me--I would appreciate it. **UPDATE**: A couple of people commenting on True Hoop say that both Rashard Lewis and Vladimir Radmanovic were the victims of broken promises--and their agents were irate--check out the post.
Hypothetically, let's say that a team in the 2006 NBA Draft doesn't live up to its word. And let's try this hypo: Celtics GM Danny Ainge promises point guard Marcus Williams that if he is still on the board at #7 (when the Celtics pick), Ainge will take him. But on draft night, something strange happens: power forward LaMarcus Aldridge--who, as I note above, is projected by most draft experts to be a top three pick--is still on the board at #7. And Ainge decides to take Aldridge instead.
Can Marcus Williams successfully sue Danny Ainge and the Celtics for breach of contract or detrimental reliance? The answer is probably "no" but not without some decent arguments by Williams. Here's why:
Although many oral contracts are enforceable, the Statute of Frauds (adopted in some form by all 50 states) requires that there be a written contract for any contract that entails more than one year of performance. Here, Williams would have to sign a rookie first round contract, which would entail at least three years of performance, and possibly five depending on the exercising of team and player options. On the other hand, perhaps Williams could argue that oral contract between he and the Celtics only concerned the draft itself, and not the subsequent player contract he would sign. Under that interpretation, the Statute of Frauds would not apply.
But even then, Ainge could argue that the alleged agreement lacked "consideration," which requires that each party give something up for formation to a contract. Ainge could say that Williams didn't give up anything when he received a promise from him--Williams was going to participate in the draft no matter what (in contrast, with the Kendrick Perkins example described above, Perkins could argue that his consideration was in remaining eligible for the draft). But Williams could argue, perhaps, that he decided to not work out for certain teams after receiving Ainge's promise--and to the extent that hurt his draft position, he did give something up: his stock with certain teams. Such an argument would be consistent with a detrimental reliance (promissory estoppel) claim, which does not require consideration, but modern courts are usually reluctant to recognize it.
Yet even if Williams could argue that there was a valid oral contract, keep in mind that oral contracts are extremely difficult to prove. Did Ainge really promise Williams, with 100% certainty, that he would take him, or was it more of a "if you're still on the board when we pick, I think you might enjoy playing with Paul Pierce" type of statement? Contract law typically considers that kind of nebulous promise to be an illusory promise, which is not enforceable. And were there any witnesses? Would it simply be Williams' word versus Ainge's word? Or Williams' agent's word versus Ainge's word?
Alternatively, what happens if Williams is still on the board at #7 and Danny Ainge is about to select him when, suddenly, former teammate and Minnesota Timberwolves GM Kevin McHale calls Ainge up and says, "Danny, hold on a second! Look, we'll trade you Kevin Garnett for that pick, plus Al Jefferson, Gerald Green, and Dan Dickau." And Ainge decides to make the trade. And with the 7th pick, McHale selects center Patrick O'Bryant. Marcus Williams then free falls, until the Philadelphia 76ers select him at #13. Would Williams have a claim against the Celtics in that instance? Here, I think the answer is almost certainly "no," since an oral promise to draft a player is likely conditional on the player being there at that pick and that the team actually makes that pick--but you can see the interesting legal complexities of oral promises in the context of the NBA Draft.
This analysis shouldn't be limited to the "legal," however. Consider the possible reputational harm a GM might endure if he breaks a promise. He would lose credibility and possibly generate negative attention for his employer. He could also suffer a backlash from certain agents, which could affect his capacity to sign free agent players in the future. Those types of consequences may be far more powerful than any legal issues.
Also see: True Hoop's Henry Abbott discussing this post (6/14/2006).
Also see (2): Celtics Blog's Jeff Clark discussing this post (6/14/2006).
Also see (3): Contracts Prof Blog's Carol Chomsky discussing this post (6/14/2006).
Also see (4): Oral Promises & Professional Sports: The Carlos Boozer Saga (7/13/2004).