Kicks Inc.: Confidential Information for Jack Watson (Itf Representative)

Kicks Inc., a manufacturer and distributor of athletic apparel and shoes, had plans to launch a new tennis shoe line within the year and was seeking an up-and-coming young athlete to be its spokesperson. Sebastian Martinez had emerged as an ideal candidate, and contract discussions were underway. Six issues need to be resolved to the satisfaction of the six parties involved—the athlete, the athlete's mother, the athlete's father, the athlete's agent, the Kicks brand manager, and an International Tennis Federation (ITF) representative. This case provides specific role information for the ITF representative. The case needs to be accompanied by the background information case, UVA-QA-0739. Excerpt UVA-QA-0742 Rev. Dec. 2, 2010 Confidential Information for Jack Watson (ITF Representative) Jack Watson had been involved in tennis for over 40 years. Now, in his mid-60s, he had taken on the role of compliance official for the International Tennis Federation (ITF). Watson had seen the game of tennis evolve from an elite country-club sport to a game of athleticism and commercialism. Watson had been a strong supporter of the growth and popularity of the sport, but he was well aware of many professional athletes in a variety of sports who had been exploited by media and fame. He continued to be involved with the ITF because of his mission to retain the dignity of the sport and its athletes. And ultimately, his role was to protect the athlete. Each year, every professional tennis agent was required to attend a one-day conference held by the ITF on agent compliance. Each agent took a test on the rules, and upon receiving a nearly perfect score, the agent would be registered as a preferred agent by the ITF. To remain in compliance, an agent must have ITF approval for each sponsorship deal completed. Many times, the agent would send the official contract terms before it was signed, and once the ITF approved it, the deal could be completed. Each year, however, Watson liked to actually take part in at least one negotiation so he could remain current with American culture and become a better critic. Watson had already planned a trip to the United States for other matters, so he decided to be a part of the negotiations with Sebastian Martinez. He was also interested in getting to know some of the U.S. agents better, in hopes of better controlling the perceived exploitation of athletes in the United States by companies and agents alike. To prevent tennis players from being exploited, the ITF had created guidelines that all agents and companies were required to abide by in all endorsement contracts. (The guidelines were distributed at every annual conference and required strict adherence.) These guidelines included a maximum annual endorsement base fee of $ 5 million; a maximum signing bonus of 15% of the endorsement base; a limit of 15 athlete appearances; and a maximum of 30% of endorsement base for a performance-based bonus. Watson believed that if athletes were given the maximums in each category, it would set a precedent for future athletes; he feared the agents would continue to lobby the ITF, and limits would continue to rise with each coming year. . . .