Two things to understand before signing your new contract

Maybe the most nervous I’ve ever been in my life was when I served as an expert witness in a lawsuit filed by a sports broadcaster. He was suing a huge corporate employer over a non-compete clause in his contract.

On one side of the table were the plaintiff’s attorney and I. Opposite us were three exceptionally well-dressed, intimidating-looking corporate attorneys. At the head of the table sat the arbitrator.

I was sweating bullets.

The story came to mind as I prepared this post.

A sportscaster told me, “I’m being offered a position where they want me to sign a two-year deal. Do you have any advice when it comes to signing a contract with a station?

There are two things to be especially aware of.

1. Restrictive covenants

Restrictive covenants are more commonly called non-compete clauses. They are common in radio and TV contracts. Be sure you understand that a non-compete states you cannot work for another employer in that market for a particular amount of time. Anywhere from 6-18 months is common. Be careful you understand it is in the contract so you’re not caught off guard should it come into play after you and the employer part ways.

2. Escape clauses

Some contracts include language that, to someone without legal expertise, looks like an escape clause or a buyout option — money you can pay to leave your contract early. The reality is that leaving a contract early is a breach of contract. What appears to be a buyout is really an explanation of what is called “liquidated damages.”

Some employers even state in the contract that they might pursue additional damages or file an injunction in the event of a breach. I have not yet seen that be tested, though.

Every once in a blue moon, a station will not hire a talent that is, in effect, breaching a contract by paying liquidated damages.

Be clear — there are contracts that have “out” clauses (ie: top 10 or specific market outs). That is not a breach of contract.

Should you even be negotiating your own contract?

It is worth considering hiring an attorney to negotiate your contract. You don’t need an agent who is going to take 7 to 10% every month. Pay an attorney a one-time fee instead. It may be $900 or $1000, but it’s worth it. They’ll likely negotiate a contract that covers their fee and still leaves you with more money than had you negotiated on your own behalf.

Using a contract attorney also precludes you from potentially stressing your relationship with your new employer during negotiations. Let a professional do it and take all of that off your plate.

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