Klutch Sports Group and agency founder Rich Paul have been sued for allegedly not paying fees to a former veteran agent, who used to head its NBA contract negotiations arm and engineered more than $1 billion in deals.
Ex-Klutch agent Mark Termini, in a lawsuit filed on Tuesday in Ohio district court, accuses Paul of breach of contract for failing to pay him more than $4.9 million on fees for deals he says he negotiated, including LeBron James’ $154 million 2018 contract that saw the star sign with the Los Angeles Lakers.
In 2019, United Talent Agency bought a majority interest in Klutch, with the agency continuing to operate under its own brand and expanding into representation of athletes in other sports. Paul was named head of UTA Sports as part of the deal. The agency’s clients include LeBron James, Anthony Davis and DeAndre Hopkins.
According to the complaint, Termini was asked in 2012 to oversee contract negotiations for Klutch, then in its infancy after Paul departed Creative Artists Agency with four clients. Under their deal, Termini agreed to “provide contract negotiation, business advisory and other administrative and support services” as an independent contractor for Klutch in exchange for 25 percent of the agency’s fees for negotiating any NBA or marketing contract. The agreement outlines that Termini is to be paid “upon the signing by the Client of the underlying playing or endorsement” deal and that he’s the exclusive provider of such services.
The lawsuit claims Paul, who’s on UTA’s board of directors, in 2018 started shortchanging Termini once the James-confidant’s credibility and experience in the industry was established. Other violations of his contract include hiring third party agents to provide services he was exclusively supposed to render, concealing the existence of certain contracts in order to avoid payment and failing to properly calculate fees on extensions and renewals.
In the lawsuit, Termini takes credit for designing and implementing James’ 2014 contract with the Cleveland Cavaliers in which the athlete signed a so-called “one plus one,” a maximum contract for a single year with a player option for the second. The strategy allowed James to earn roughly $19 million more over the course of his next three contracts with the team than by signing the typical maximum extension. He says he negotiated deals for Draymond Green, Dejounte Murray and Ben Simmons, among others.
“Termini conducted all details of the contractual monetary discussions with the NBA teams and instructed KSG and Paul in every aspect of the execution of the negotiations, including when to release information to the media, what to explain to Clients regarding negotiation strategies, and when to engage or not engage with a Team,” the complaint states.
Wednesday’s lawsuit isn’t Klutch’s first run-in with litigation. In 2021, former NBA center Nerlens Noel sued the agency, which filed its own lawsuit against the player for unpaid fees, for allegedly ignoring duties related to its representation of him. He claimed that he was advised by Paul in 2017 to turn down a four year, $70 million contract extension from the Dallas Mavericks, which then signed him to a one-year $4.1 million offer. Over the next four seasons, he made significantly less than the deal he was originally offered by the Mavericks. Noel’s lawsuit was dismissed and sent to arbitration before the National Basketball Players Association.
Klutch has set its sights on media and entertainment through its production banner, Klutch Originals. In 2021, it partnered with BET Studios for a five-part documentary series, Klutch Academy, exploring six college basketball players preparing to make the jump into the NBA.
