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Wednesday, June 06, 2007
Were Orlando Magic Season Ticket Holders Deceived by Billy Donovan's Hiring?


Darren Rovell has an excellent post on his CNBC Sports Business Blog regarding whether Orlando Magic fans who purchased season tickets while Billy Donovan was a willing head coach have a legal right to demand a refund from the Magic (Howard blogged about Donovan's situation earlier this week).

Rovell interviews Duke law professor Paul Haagen, who I blogged about last September in regards to the Faculty Associates Plan at Duke University, for his story:
Assuming the 200 fans that bought season tickets in the 24 hours surrounding Donovan’s hiring bought the average seats -- $40 per game for $1,800 a season -- that would mean that the Magic would have to refund $360,000. I called the team this morning and asked them if they were refunding tickets. A ticket representative told me that nothing had been determined yet.

Duke law school professor Paul Haagen told me earlier this week, he thought the team would have a case if they didn’t give the fans their money back. “I suspect that they intend to hold those ticket holders into their contracts and they’re not intending to release them,” Haagen told me. “They didn’t in fact guarantee that Billy Donovan would be the coach when they announced that he would be the coach.”

Now that’s interesting. Haagen is basically saying that there wasn’t any legal language that tied Donovan to season ticket contract. I’m not a lawyer, but I think this is good enough.

Have fans ever before demanded a refund because they were upset about a coach quitting so quickly? Neither Rovell nor I are aware of that happening. But I do recall the one day when Bill Belichick was, in his words, "HC of the NYJ." However I don't recall any Jets fans claiming that they bought season tickets because Belichick was, at least for several hours, going to take over for Bill Parcells as head coach. Rovell does cite a Canadian case where a fan of the Ottawa Senators unsuccessfully argued that he would not have bought season tickets for the 1999-2000 season had he known that Alexi Yashin would not be part of the team (Yashin held out for the entire year). That case was dismissed because it was impossible to prove that the fan bought the seats because of Yashin.

Along those lines, would any Magic fan spend thousands of dollars on Magic seats merely because of Billy Donovan's hiring? I suppose it's possible, as they may pay that money to see a star player even if his team stinks. But I suspect fans bought those seats because they were excited about Donovan, a good possibly great coach, coaching promising young players like Dwight Howard and Jameer Nelson on a team with a ton of salary cap space to spend on free agents. In other words, they were probably buying into the situation that Donovan was a part of; whether he was an essential part seems hard to establish. That is particularly true in a "players league" like the NBA, where coaching does not appear as meaningful to a team's win/loss record as it does in other leagues, most notably in the NFL, although that point is debatable.

There may be several other possible reasons against Magic fans enjoying a legal right to a refund. How about when a team markets a player to prospective season ticket holders and then trades him? Say the Lakers trade Kobe Bryant later this summer--will fans who purchased season tickets thinking that Kobe would be part of the 2007-08 Lakers team be able to demand a refund? The sensible answer would seem to be no. As Paul Haagen notes, teams can't guarantee future rosters or even coaching and management staffs. Change and turnover are the nature of modern sports teams.


Note, of course, that if a fan could bring this breach-of-contract claim against the Magic, the Magic could sue Donovan, probably for interference with the team's contractual relations with its fans, to recover whatever it had to pay the fans.

Blogger Howard Wasserman -- 6/06/2007 9:21 PM  

Once again, a college coach leaves a school (or team) and only the student-athletes (or fans in this case) are bound to their agreements. Everyone gets screwed but the coach. Let them out of their ticket agreements and then require Donovan reimburse the team. Better yet, put that in standard language contracts in coaching contracts at the college and pro levels.

Anonymous Anonymous -- 6/07/2007 6:52 AM  

The only case ruled in courts that I know is Strauss v. Long Island Sports, Inc., 89 Misc. 2d 827, 394 N.Y.S. 341 (1977), a case involving the sale of “Dr. J” (definitely a franchise player) from Nets to 76ers, and the plaintiff was rejected.

But, we have to remember that even in that issue, the Nets and the New York State Attorney-General established a plan where Nets season ticket holders could receive a 10% rebate. Strauss rejected the offer and sued the Nets in court.

Another case, in 1993, was settled by the San Diego Padres when some season ticket holders filed a class-action lawsuit, accusing the franchise of dismantling the team. Two similar class actions where filed by angry Marlin´s fans after the "firesale" of key players, winners of the 1997 world championship.

So, even if the courts are against admitting that kind of lawsuits because "[i]n this age of ‘team-jumping ball players’ and ‘renegotiated’ athletic contracts, the risk that Dr. J might not be playing for the Nets might ‘fairly be regarded as within the risks that a purchaser assumed under the contract.’ " even the teams know that there’s a sense of unfairness against the season ticket holder when this happens. So, maybe not a fully refund but a rebate should be fair, specially considering the fact that we are talking about team sports and not individual performances.

Anonymous Ariel Reck -- 6/08/2007 5:23 PM  

Why could the Magic sue Donovan to "get their money back"? The Magic gained money from the sale of new season-ticket packages, and at worst would refund either the full cost or a deposited amount to any new season-ticket holders who chose to back out (unless there is something in the agreement that says otherwise).

As regards the example of Kobe and Lakers season-ticket holders: Anyone buying season tickets knows that Kobe did ask to be traded this summer; why would that be any different than, say, Kobe goes down with a season-ending knee injury in training camp?

Anonymous Anonymous -- 6/08/2007 9:17 PM  

Asking to be traded and actually getting traded are different. Not only that, the better analogy would be to get traded, and then two days later be traded back! Also, the fact that the team "gained" revenue from ticket sales is exactly why the team should refund the fans, then pursue Donovan for the difference. Good (or at least future) contract drafters could provide this in a coaching contract as sort of a newly named force majeure clause of sorts.

Anonymous Anonymous -- 6/09/2007 9:59 AM  

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