Prominent MLB player agent Greg Genske is suing TLA Worldwide and its successor company, GSE Worldwide, for breach of contract, among other things, after he was removed as president of baseball earlier this year.
In a lawsuit filed Jan. 17 in California state court in Santa Ana, Genske alleges that TLA Worldwide, which is now GSE Worldwide, engaged in a “scheme to terminate Genske” in order to save the costs of paying him his salary and other expenses, and to reap the benefits of MLB player fees for contracts already negotiated.
Since 2011, Genske had run the division that once employed 20 MLB agents who represented more than 100 players and secured more than $1 billion in player contracts. The lawsuit was filed after TLA Worldwide, which had traded on the London Stock Exchange, was sold to Gatemore Capital Management after a steep decline in its stock price.
Earlier this month, TLA Worldwide announced it was rebranding as GSE Worldwide in a press release stating that Gatemore had purchased the company and privatized it. GSE Worldwide announced that former TLA MLB agent Peter Greenberg would lead the baseball practice, former TLA executive Andrew Witlieb would lead the new sports marketing practice and Mike Principe would continue as CEO. Other than Greenberg, it’s not clear how many MLB agents are at GSE Worldwide now.
Gatemore Capital Management is an investment firm founded in 2005 by Liad Meidar, with over $1 billion in assets under management.
Asked for comment on Genske’s lawsuit, Principe did not address specific allegations but issued this statement:
“With the GSE Worldwide rebrand and our vision for the future, it is pivotal for new ownership, who is investing much capital into the company, to have the right leadership in place in our baseball and other divisions to best serve our existing clients and position us for growth moving forward. Because of this, GSE needed to make some personnel changes in our organization and those decisions have resulted in a few minor and expected legal disputes. We have a policy of not commenting publicly on these types of personnel disputes but suffice it to say that we could not be more excited about our restructured GSE team and the direction of the company.”
Genske’s lawsuit tells a different story.
Genske had been a certified MLB agent since 2004 at Legacy Sports Group. In 2011, Legacy Sports merged with The Agency, forming The Legacy Agency, or TLA. Genske had been president of the baseball division since 2011 under an employment agreement that was extended in 2016 to run through 2021.
Since 2011 until last September, TLA Worldwide traded on the London Stock Exchange at a range between 14 and 59 pence. The lawsuit states that on Sept. 4, 2018, TLA Worldwide “was forced to publish a negative update, indicating that it would not meet financial projections and was expected to violate bank covenants.” The bad news resulted in a “crash” of the stock price and “triggered an inexorable exit of agents,” Genske’s lawsuit states.
Although “a majority of the baseball agents have now left,” the baseball division “still has substantial value,” the lawsuit states. “On information and belief, Principe’s and Meidar’s business plan for TLA was not to continue operating as a baseball agency, but rather to reduce expenses as promptly as possible and then realize ongoing fee income on previously-signed player contracts.”
Genske found out in early December at the MLB Winter Meetings that Greenberg was “informing numerous people that he was the new President of TLA’s baseball division,” the lawsuit states.
On Jan. 4, according to the lawsuit, Genske received a memo from Meidar demanding he attend a call the next day. Genske attended the call and denied any wrongdoing, the lawsuit states. On Jan. 6, Genske received another memo, titled “Notice of Intended Termination,” indicating that GSE/TLA was placing him on administrative leave.
Genske responded by saying he would not accept administrative leave but would continue to represent his three arbitration-eligible clients. Not clear from the lawsuit is whether Genske resigned or was terminated.
Genske is asking the California court for a declaration finding he had “good reason” under the law to resign his employment. He also is asking for unspecified damages, and disgorgement of fees and expenses he incurred, including “material reimbursement and indemnification related to a specific player representation” relating to a player client signed in 2015. The player is not named, but the lawsuit states, “All actions taken by Genske in securing the representation of this player were done with the express prior approval of (then TLA) CEO Mike Principe” and other officers of the agency.
Liz Mullen can be reached at lmullen@sportsbusinessjournal.com. Follow her on Twitter @SBJLizMullen.
