Athletes in Family Matters<br><i><font size="-1">Part Two of a Two-Part Article</i></font>

Forum Choice

It is important to look at the laws of other states with which the athlete (or the athlete's spouse or child, as the case may be) has significant contacts, to see if residency can be established in more than one place. This can help your client because some states emancipate children earlier, while some are potentially less generous to spouses.

Taxes

With regard to the athlete's earnings, taxes need to be examined frequently when determining net income, as athletes are taxed where they play.

Termination and Dissipation

If the athlete is terminated and loses his or her income, or spends it on others outside of the marriage, how should that be addressed? The first question is whether the termination of the athlete was within his or her control or not. The other issue is whether the expenditures of money earned during the marriage constitute dissipation, and whether there should be a credit back. There have been cases where money paid to third parties or relatives gave rise to such a dissipation claim.

Another way to analyze this situation is to determine what is an asset and what is income for the athlete. One issue that has not been fully addressed in the courts is whether assets earned during the marriage by an athlete should be treated as an active asset and paid out at a lower percentage. After all, it is up to the athlete to perform in order for the income to be earned. Unfortunately, some athletes spend the money that they earn and ultimately there is not anything left to divide. An asset is not available for equitable distribution unless it has been saved/preserved. The money must be earned during the marriage to be an asset of the marriage.

Josh Brown, a Giants football player, admitted to committing acts of domestic violence. He was briefly placed on the Commissioner's exempt list, paid for his work for the Giants, and shortly thereafter was released from the team based upon the admission. As of this writing, Mr. Brown's wife, Molly Brown, is considering divorce. Arguably, his wrongdoing caused his loss of income. Can his income, had he not committed domestic violence, be imputed to him for purposes of the divorce? Is there any point to the argument, since the income does not exist any longer? In effect it was a voluntary loss of income. On the other hand, the reality is that Mr. Brown is currently unemployed and it is questionable what his future earnings will be.

In Gastineau v. Gastineau, 573 N.Y.S.2d 819 (Supp. 1991), a New York court was faced with the question of what extent Mr. Gastineau had dissipated a marital asset when he quit the New York Jets while still under contract. The court found that he had dissipated marital assets to the extent of the amount he was still owed on his contract.

Good Will

The good will of an athlete has never been awarded, although it's been discussed. It is an issue for the future. Good will occurs when an individual has an enhanced earning capacity, expertise in a field and probable future earnings that are in excess of the average earned in that field. An argument can be made that there is good will to be awarded in the case of the athlete. The issue was discussed in Piscopo v. Piscopo, 232 N.J. Super. 559 (1989), but no actual award was made representing good will. One issue with good will in the sports figure case is that it is impossible to quantify, since future earnings are so speculative. This is an accounting issue.

Rights of Publicity

The right of publicity can give rise to a payment to an athlete as the value of the athlete's likeness that may be used in advertising and for endorsements. Endorsement deals, for products ranging from clothing to energy drinks to video games, can represent significant additional compensation to the athlete. The matrimonial lawyer needs to see if there are contracts in place, and if services have been performed. The question is, as always, “How much has been earned during the marriage?”

Awards

With regard to a Superbowl Ring, or other such tokens, the question is, is it a gift from the team or is it an asset earned and therefore subject to equitable distribution? No court has ruled on this issue! The jewelry needs to be located to appraise it. At least, it has to be covered by an insurance rider.

Attorney Fees

With regard to counsel fees, the athlete litigant needs to expect to pay a portion of the fees, if not all of them. The athlete must try to get the case resolved in a reasonably quick manner, either through mediation or, if need be, arbitration. He or she should make it clear that if there is no publicity and no court, the athlete may be more likely to pay the fees.

Conclusion

Representing an athlete or the athlete's spouse requires thorough contract review, the analysis of the compensation stream from all sources — in all likelihood, by a forensic expert — and a careful analysis of the particular facts of the case. While such a case may seem “glamorous” or “spicier” than the average family law case, it requires due diligence, artful negotiation and excellent trial skills in order to carve out a resolution that takes all the special facts of the athlete's life into account.

***** Lynne Strober, a member of this newsletter's Board of Editors, is Chair of the Family Law Department at Mandelbaum Salsburg. Elisabete M. Rocha is an associate at the firm.