Yesterday, May 18, 2022, R. Montgomery Sports Group filed a lawsuit against veteran NBA agent Derrick Powell. Roger Montgomery, CEO of Montgomery Sports Group, has been an NBA agent for over 20 years and spent 3 years at Roc Nation. In the complaint, Montgomery claims he hired Powell in August of 2020 to work as an NBA agent at Montgomery Sports. He says Powell resigned from that position, effective November 3, 2020. Powell's biggest NBA client was then-Brooklyn Net Center Jarret Allen.
After leaving Montgomery Sports, Powell continued his representation of Allen, helping the rising star reach a massive $100,000,000 agreement with the Cleveland Cavaliers. However, Montgomery claims his company should be paid a fee from that contract, even though Powell had resigned and moved on before it was signed. Montgomery alleges Powell’s employment agreement with Montgomery Sports Group contained a fee tail provision that provided for Powell to pay Montgomery 70% of the fees for contracts that Montgomery otherwise would have been entitled to had Powell remained employed with Montgomery. He claims the Allen contract falls under said provision.
Often in sports agency, there are major, negative ripple effects for an agency when an agent leaves (and takes his or her clients). With that, agencies draft fee tails into employment agreements. A “Fee Tail” boils down to an obligation by an individual to make payments to a former employer based on revenues received after termination/expiration of the employment agreement. The purpose of a fee tail provision is to protect an agency in light of the NBPA policy that gives players full discretion to choose their agent.
Montgomery claims he has made multiple demands of the commission fees from Powell he feels he is entitled to. He says Powell ignored him and won't pay, sparking this lawsuit.
In connection with the Allen Contract, Powell will be splitting the agent fees with Jim Tanner and Tandem Sports + Entertainment. Pursuant to Powell’s split with Tandem, Powell will receive 50% of the agent fees received by Tandem. As Powell will receive agent fees pursuant to Allen's Contract, Montgomery claims such agent fees should fall under the fee tail provision Powell had in his employment agreement with Montgomery and thus entitles Montgomery to a portion of this commission.
As a result of Powell’s alleged breach of the employment agreement, Montgomery brings this suit to collect damages in excess of $1,000,000.
Jason Morrin is a soon-graduate of Hofstra Law School. He was the President of Hofstra’s Sports and Entertainment Law Society. Currently, he is a Law Clerk at Zumpano, Patricios, & Popok. He can be found on Twitter @Jason_Morrin.
Image via News 5 Cleveland
