Last week in Part 1 of our interview with lawyer Genevieve Gordon of Tactic Connect we discussed topics such as when a driver should engage a lawyer, how to do so and why it is important. You can read Part 1 here.
In Part 2 we get into more detail about how to find a motorsport lawyer, red flags to look for in a contract and the Business of Motorsport Masters program that Genevieve runs in conjunction with De Montfort University.
Please keep in mind that this information is of general interest only and should not be construed as legal advice. Please consult your own attorney to discuss your particular situation.
Motorsport Prospects: How do you find a motorsport lawyer?
Genevieve Gordon: Good question!
When researching, you have to find someone who understands the environment they are working in; that they are up to date with changes and general discussion. That is what will make them effective. Lawyers specialize because no lawyer can know everything. Definitively get somebody who understands the format of motorsport and the roles of the various bodies. Definitely find a person that is engaged in the sports industry because that is where the idiosyncrasy will come in and above all find somebody that wants to work with you in a manner that suits your needs as a driver which isn’t always easy.
MP: What are some important things a driver and their parents should look at in a contract? What would be some “red flags”?
GG: Terms and conditions – Understand the difference between a term and condition as well as a warranty and guarantee.
Exclusion clauses – What are you being excluded from or what are you being included in that excludes you or precludes you from something else.
Intellectual property rights – You need to know who owns your IP and for how long.
Restrictive terms – clauses that restrict you (often when the contract is completed too).
The impact of external factors – How would that leave you with your contract.
The actual parties to the contract – Quite often people think they are contracting with that person over there, but they are not, they are contracting with a person or entity that is 3 steps behind.
Exit/severance and conditions for breach of contract – Make sure that you know what your termination opportunities are and how the generic breach of contract rules relate to the jurisdiction of the law that the contract stipulates applies.
Jurisdiction – Just because you are drawing up the contract in one country does not mean that the contract will be accepted in that jurisdiction. If you are looking at driving in different countries you’ve got to have an international contract because there will be different jurisdictions impacting on that contract at any one time so terms that frustrate a contract in one country may not apply in another.
Performance – Performance of a contract can equate to acceptance!
MP: How do you deal with restrictive covenants in contracts?
GG: Argue them! Make sure its proportionate because the majority of the time it will be disproportionate.
MP: How do you know if you are essentially a training partner or testing partner subsidizing another driver on the team?
GG: Make sure your role is clearly defined in the contract. Both parties have a clear definition in the body of the contract even if it is in the schedule of the contract. Often you have a schedule of work defining what is expected of each driver and it might be that if you are defined as a testing or training partner there might be specific requirements of one that wouldn’t apply to another. But again, that is the point of using a sports lawyer with motorsport knowledge, they will iron these labels out so there is no grey area. Definition for me is key.
Another important point is that people often don’t read contracts because they think they will enforcement of them is unlikely which is a mistake. They think their relationship is bigger than the contract. Believe me when I say it never is.
Let me tell you a recent anecdote. I have just negotiated some contracts for a driver with sponsors and I asked to have eyes on previous agreements they had been party to. My client wondered why I would need to look over old agreements, especially when they weren’t with the potential new sponsor, perhaps concerned that this was a waste of fee-paying time. Had I not completed due diligence and looked through the previous agreements my client would have in fact been in breach of both the old and the new agreement. You see the old contracts contained restrictive terms that said he couldn’t work with any like-minded business for x number of years. I explained the restrictions and we managed to agree completion of the old contracts as were also unable to rely on a buy-out clause leaving my client free to continue with the new negotiations. People don’t think like that; they don’t realize just because a contract has completed it isn’t still restrictive. By using a lawyer’s services, clients don’t need to think like that because they are paying us to think like that!
MP: What are some moral and ethical considerations that come up in the business of racing?
GG: Age – I sometimes consider the ages children are racing at and whether it is morally acceptable that we don’t let a child drive on the road in the UK unitl they are 17 but we let them whizz around a karting track at high speed. Should a parent really be telling their child to go faster?
Gender – The big discussion of the moment is women in motorsport. We’ve recently seen the launch of the W Series and Reema Juffali has a seat in Formula 4. I can’t decide whether I think the W Series is a good thing or a bad thing for women – I understand both perspectives of the for and against camps. Perhaps I am indifferent about the series because it doesn’t (or shouldn’t) matter. It’s there. Do it and be as good as you can be. If you are good it will act as a stepping stone to the next series you want to tackle and that is how any event should be – give you the opportunity to reach your full potential regardless of sex or gender.
Parental Involvement – Parents should receive support from governing bodies and motorsport organisations, to be a continued support to the driver who is first and foremost their child. Sport the world over sees the pressures children face when they show promise in a particular sport and motorsport should be doing all it can to engage parents in suitable conduct and actions.
MP: How does motorsport licensing work at an international level and do you need a lawyer to prepare your licensing paperwork to race beyond national borders?
GG: Each of the governing bodies will have grades of license and most, if not all, have an international license that will allow a driver to travel around and race in countries that the FIA is working with but not necessarily countries outside the FIA. The FIA is comprised of 240 motoring and motorsport club members in 144 countries. Your licensing is dependent on which governing body you are regulated by and their relationship with the FIA as to you where you can use that license.
MP: You are involved with The Business of Motorsport Masters distance learning program. Tell us a little bit about the program and why somebody would want to consider it?
GG: I wrote the course due to repeated comments from industry about not being able to find people with motorsport business experience and it being hard to train non-business employees with the relevant knowledge of the sector and an understanding for the business elements with reference to motorsport.
The course covers the following modules:
- History, Structure and Governance of Motorsport aims to provide a solid theoretical background on key themes within the context of the history and development of motorsport. This module will also provide a thorough understanding of the roles, responsibilities and operating framework of the key regulatory and commercial organisations within the motorsport industry
- Site Visits, Foreign Trip and Motorsport Business Reflection affords students the perfect opportunity to interact with the motorsport world through visiting various motorsport sites such as Donington, the MSA and Prodrive. Industry leaders will offer an insight into their roles and the organisation’s objectives within motorsport
- Ethics in Sports Management and Governance concentrates on ethical issues in the modern sports industry and explores crises in the sector. You will develop an agenda for reform and examine legal and organisational frameworks relating to problem areas in sport. This module also covers existing regulations, management and governance in relation to other business and cultural areas
- Sponsorship Models in Elite Motorsport and the Role of the Media offers the opportunity to look at a wide range of commercial principles as applied through third party support and sponsorship of motorsport activity. Commercial case studies and lectures from industry experts will form a central part of this module
- Commerce within Motorsport provides the opportunity to analyse a wide range of commercial principles applied within the motorsport industry. From budgeting and financial management of competing in motorsport as a driver or team, the costs of managing motorsport venues, sponsorship and brand activity through to the need for fan engagement
- Motorsport Brands, their Extension and Future Trends explores a range of topics related to the current and future commercial rationale for brands becoming associated with motorsport. You will critically assess what brands look for in their association with motorsport and identity how this is likely to evolve in the future
Plus one from the following:
- Dissertation offers the student the opportunity to research and write an academic paper centred around a specific motorsport topics.
- Consulting Project offers students the opportunity to complete a 3 month consultancy project on a live business case. Students will be given the opportunity to critically apply knowledge gained over the period of their study and have a real impact on a local company/employer.
Plus one option from the following:
- Change Management: Motorsport is a sector under constant change from external and internal factors. Global megatrends are creating commercial opportunities and risks faster than most traditional organisations can respond to them. Those who respond quickly and effectively stand to be at the forefront of their game. Setting and delivering strategic direction rapidly, restructuring how value is created through optimal supply chains and developing a culture of high performance become critical functions for successful organisations undergoing change.
- Mega-Events: Global Sport in Perspective explores the boom in major sporting events through ownership, infrastructure, management and the bidding and hosting processes. This module uses historical and contemporary approaches to explore structure, and governance, and commercial aspects of sport within political, social, cultural, and economic context. This module will include visits to major sporting venues and placements at relevant events.
MP: Anything more you would like to add?
GG – Always look after your own interests, be fair, be resilient and don’t ever think an offer is a once-in-a-lifetime chance.
Details on the The Business of Motorsport Masters program can be found here.