LONGTIME LICENSING AGENT SUES MLBPA OVER CONTRACT DISPUTE
The MLBPA has been sued by Tampa-based Mike Schechter
Associates, Inc., its non-exclusive group licensing agent since
'77. The lawsuit, filed in NY Supreme Court in February, alleges
that the MLBPA -- through the actions of MLBPA Exec Dir Donald
Fehr and Dir of Licensing Judy Heeter -- "breached its agency
agreement with MSA, tortiously interfered with MSA's business and
business relationships, and engaged in various schemes to
intimidate MSA, deprive MSA of rightfully-earned commissions and
exert undue control over licensees." MSA, which earns a 25%
commission from MLBPA for all gross income from licensing deals
entered into by the company, claims to have generated over $100M
in revenues -- securing contracts with such companies as Burger
King, Coca-Cola, Kraft, McDonald's, Pizza Hut, Pinnacle Brands,
Sony and Sega (MSA).
A CLOSER LOOK: According to the complaint, much of the
dispute stems from a paragraph in the original agency agreement
signed by MSA Founder/President Mike Schechter and then-MLBPA
Exec Dir Marvin Miller in June '77. The so- called "evergreen
provision" establishes MSA's 25% cut and contains language which
could be interpreted to allow a continuing commission -- even on
license "extensions, renewals, replacements and substitutions"
entered into after the termination of the agency agreement. In
May '89, this provision was allegedly modified, reducing MSA's
commission to 10% for certain post-January '89 licensing deals.
The complaint asserts that MLBPA has breached the agreement by
unlawfully attempting to circumvent or eliminate the "evergreen
provision," impede MSA's normal business routine and dilute its
general powers. MSA is seeking compensatory and punitive damages
in excess of $1M (THE DAILY).
THE CHARGE: Schechter told THE DAILY his main concern is
that MLBPA desired to cut back or eliminate MSA's commission
while still keeping its other regular business arrangements. He
said he was "saddened" to file the lawsuit after a "very
successful" 20-year relationship with MLBPA. He also made an
analogy to "intimidation tactics" used by the union against MLB
owners during the strike (THE DAILY).
THE RESPONSE: Heeter told THE DAILY that she, too, was
"saddened" by the collapse of such a "long and cordial"
affiliation. She said the union was "stunned" by the filing of
the suit, and "even more stunned by its viciousness." Heeter,
who revealed that the MLBPA had officially terminated its agency
association with MSA effective May 3 (following the required 60-
days written notice), stated that the organizations had been
trying to "transition" in preparation for the day when Schechter
"would not be able or willing" to serve as an agent for MLBPA.
Heeter: "We did not want to terminate our relationship. We
wanted to change by mutual agreement." Heeter added that the
MLBPA was not planning to hire a new licensing agent, but rather
was working towards a "fully integrated marketing program in-
house." She said the MSA lawsuit will "precipitate much sooner
what we were trying to do for a while" (THE DAILY).