Contracts Featured

By Ted Craig July 03, 2019 1183

If you follow the music industry, celebrity gossip or live in my house, you know that Taylor Swift saw her music rights sold out from under her this past week. Ms. Swift isn’t the first recording artist to feel cheated by a contract she signed in her youth and she won’t be the last. She is falling back on the greatest Millennial legal principal there is: “No fair!”

But it is fair. She signed a contract. Your customers also sign contracts and sometimes when things go against them, the media publicly makes their “no-fair” case, just like it is doing for Taylor Swift.

Sometimes contracts work the other way. Another story that drew a lot of attention this past week concerned the Mets making their annual payment to Bobby Bonilla, as they have done since 2000 and will do for another 16 years. It seems that rather than buy out the erstwhile slugger’s contract at the time, the team’s owners deferred the payment of $5.9 million over 35 years and also agreed to pay 8 percent interest. By the time he’s done, Bonilla will have collected $29.8 million. That seems absurd. But at the time, the Mets thought they had found a brilliant financial strategy. They would offer players contracts with deferred payments. The team would then invest that money and get back far more than they paid out to the players. On paper, brilliant, especially since they were working with one of the best firms on Wall Street – Bernard L. Madoff Investment Securities.

Nobody pities the Mets’ owners. Nobody pities you if you fall behind on your payments and run afoul of your floor planner. In that case, you are the bad guy. But if a single mother falls behind on her payments and you repo her car, you are also the bad guy.

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Last modified on Wednesday, 03 July 2019 19:57

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