Veteran NBA center Nerlens Noel recently sued his former agent, Rich Paul, for damages totaling $58 million. The suit was a countermeasure to Klutch Sports initially filing a grievance with the National Basketball Players Association, citing that Noel had failed to pay $200,000 in commission. The story was originally broken by Sports Agent Blog owner Darren Heitner.
The NBA has a firm stance on contract negotiations, and Nerlens Noel has already ended his association with Rich Paul. Noel, now represented by George Langberg, negotiated a three-year, $32 million deal with the New York Knicks this summer.
Rich Paul's Klutch Sports has gained serious ground in recent years. Their clientele is headed by LeBron James himself and also includes other stars such as Anthony Davis and Ben Simmons. Paul has changed the dynamic of athlete representation in the sports agency business and, through Klutch Sports, has jettisoned to the top of the sports agency game.
The involvement of Rich Paul and Klutch Sports has made this lawsuit noteworthy. Sportskeeda reached out to Darren Heitner looking for clarity on the original story posted by him. An attorney at law, Heitner spoke to us about the events that led to this case and the potential ramifications of the suit filed by Nerlens Noel against Rich Paul. Here are excerpts from this exclusive conversation.
Darren, let's get right to it. Provide context for NBA fans trying to make sense of this dust-up between New York Knicks center, Nerlens Noel and his former player agent representative, Rich Paul, of Klutch Sports.
Darren Heitner: My interpretation is that this has been bubbling over for quite some time. Whenever you hear about a player on his third or fourth agent, typically, there’s a lack of comfort there between the player and his representation over time. There are also people in the ears of players. It has reached a tipping point here where the player believes he needed to do something about all this money that I think objectively people understand he lost out on. I think where there’s certainly subjectivity is who is to blame for that?
"In any agent relationship, ultimately the blame has to go to the principal. No one put a gun to Nerlens Noel’s head and said sign this document, or pull out of this offer that you’ve received from the Mavericks, or else. Or, don’t sign with the 76ers or else. Where I think it’s really interesting, is in the alleged lack of communication on behalf of the agent not fielding calls or not responding to communication."
But that’s very very difficult evidentiary standard and a burden for Nerlens Noel to have. What does this really boil down to, if you take a step back, this is a dispute that you, me and everybody else should have never even heard about. This is a typical type of dispute. Typical, because it’s not so common in the NBPA, but there are disputes between players and agents. Under the standard player/agent contract there is clear language in the NBPA regulations governing player agents, and there is mandatory arbitration.
Obviously here, Nerlens’ representation made a determination that they were going to proceed by way of filing litigation in a court of law as opposed to NBPA arbitration. I think it’s quite clear why because they wanted the world to know what was happening.
My personal belief is that the very first and perhaps the only filing we’ll see from the opposition won’t be on the subject matter of the litigation but instead on a procedural ground – which is that it should have never been filed in a court of law, and it needs to be removed to NBPA arbitration.
Where does Nerlens Noel go moving forward? How do agents see him?
DH: Well, I don’t think he cares about what agents think of him. He’s currently represented by George Langberg. He’s not underrepresented, and I have no reason to believe he’s going agent shopping again. He recently signed his current contract with the New York Knicks. For all intents and purposes, I believe him to be happy at this point in time.
Is there a noticeable resentment of the power Klutch Sports is currently yielding over the NBA? Are agents encouraged by that perceived power, or are they threatened by it?
DH: It’s a hyper-competitive field. Whether an agent will admit it or not, I believe the old guard and the new agents feel threatened by the consolidation of power in Klutch Sports. Whether it’s Klutch Sports or any agency, when a lawsuit like this is filed or any negative news is reported by a competitor – which is absolutely huge on the recruiting path. Whether it be with current veterans in the NBA or recruits coming out of college, or even on the NIL level.
"I know this to be true, agents across the country are clamoring about this specific case and talking about the particular ramifications for it. I think many who are threatened by Klutch Sports’ accumulation of power in a very short amount of time, would they miss this opportunity?"
That's a good question. What is LeBron James' part in the daily operations of Klutch Sports?
DH: I don’t have the answer to that. I’ve seen a lot of speculation surrounding to what extent he’s involved in the corporate operations, but I don’t have any personal knowledge.
I’m obviously aware that Rich and LeBron have a relationship that goes back decades, and Rich got his start at Creative Artists Agency (CAA) largely because of his relationship with LeBron. He has absolutely leveraged that relationship to gain additional and very notable clientele.
Beyond LeBron being a fan, a vocal supporter of Rich Paul and everything he’s done with Klutch, I really don’t have an appreciation for LeBron’s involvement in the daily operations if he has any at all.
What are some of the pros and cons of a player representing himself sans an agent in contract negotiations?
DH: I think the one pro about not going with representation is the athlete is able to save money. Typically an agent has the capacity to charge up to 4% on the player contract...that was an expense that could be deducted on a tax return. That is no longer the case. So, that’s money being deducted out of the pockets of players.
There are many positives of having representation. Particularly in regards to second, third and fourth contracts in the NBA. Whereas the rookie contract is obviously largely slotted based on where the player is selected.
Number one, the experience of the agent in negotiating these types of deals, the knowledge of what the standard should be in terms of compensation and other areas of the contract to look out for in terms of the negotiation, is very valuable. Many agents would say the value is in excess of the fee that’s being paid.
"In addition to that, the relationships between agents and those franchises should not be diminished or discounted in any way. Often times, those relationships can end up helping a player get a slot on a team where two players similarly situated may be going for the same opening, and those relationships can matter quite a bit."
Everything the agent does outside of that specific negotiation. Players will very commonly go to their agents for training and various forms of advice – things that aren’t really compensable right off the bat. So, a lot of agents feel they aren’t being compensated enough, and many are charging less than the max of 4%.
So how does this all move forward? How does this dynamic between player and agent continue?
DH: I don’t know if this particular lawsuit changes the dynamic of agents and players as a whole. I think it brings to light the possibilities and the ultimate consequences for agents in taking on certain players for representation.
"Players should be doing their due diligence on the agents they ultimately decide to retain. I think agents should also be conducting respect to due diligence, making sure that the player is a good fit for the agency, not only if the agency is a good fit for the player. If you ask Rich Paul, and I doubt he will speak publicly on the matter currently because obviously he’s named as a defendant, I assume he regrets even signing Nerlens Noel as a client knowing now, and hindsight is 20/20 that ultimately he was going to be sued by him. I’m sure that whatever commissions he’s received doesn’t make up for the resulting harm in just being named in a public lawsuit."
That said, I don’t think the relationship between agents and players changes much, if at all, based on this lawsuit. It’s ultimately a he said, he said situation. Ultimately at some point in time, whether it’s in litigation or at the NBPA level of arbitration, Rich is going to defend himself and say he did everything in his power to assist Nerlens Noel. There is no way he controls the fact that Nerlens Noel was injured. I do think it’s going to be a difficult burden for Nerlens Noel in this case.
What is the NBPA’s role in this? Do you think they’re advising Noel?
DH: I think the Players Association is put into a difficult position. The Players Association does not represent the agents. At any certain point in time, the NBPA can decide we’re no longer certifying agents; we’ll just represent the players on our own. It’s a bargaining unit for the players to protect the players’ best interests.
I think the NBPA is conflicted here because it probably believes Nerlens Noel filed in the wrong jurisdiction; that there is no procedural backing in order to justify it in a court of law. The NBPA wouldn’t want to go against its own players seeking to represent the best interests of. It certainly won’t go out of its way, I would assume, to protect and benefit Rich Paul because the NBPA doesn’t represent him.
The NBPA is probably going to take a hands-off approach for the time being, but if a court of law asks for the NBPA’s opinion, I would it says that this belongs under our arbitration procedure.
Also read: NBA Rumors: Nerlens Noel's former agent Rich Paul prevented him from returning to the Philadelphia 76ers