Rooney win highlights importance of restraint of trade considerations when contracting minors

August 2010


Whilst Wayne Rooney might be one of the planet’s best known football stars, the England and Manchester United striker’s legal triumph is an important reminder about the role of restraint of trade in contracts, particularly those involving minors. Rooney was accused of withholding commission on multi-million pound deals that had been brokered by the sports management firm Proactive, which used to represent him in a claim totalling £4.3 million. Rooney made no payments after the football agent Paul Stretford, a director and founder of Proactive, left in October 2008, taking Rooney with him.

The 24-year-old was signed by Stretford for Proactive in 2002 when he was then 17 and he went from being an £80-a-week Everton trainee living in his parent’s council house in Croxteth, Liverpool, to being a Manchester United and England star enjoying multi-million-pound sponsorship deals with the likes of Nike and Coca-Cola. Rooney was unhappy about certain financial disclosures in Court but the case revealed the value of his image rights – in addition to his weekly £90,000 club salary for playing football, he receives £700,000 a month for image rights, as well as £1 million per annum from Nike and £237,000 annually from EA Sports. He has also generated £3.55 from a five book publishing deal and £600,000 for a four year deal with Coca-cola.

Proactive argued that as such contracts for Rooney and his wife, Coleen, were brokered by Stretford while he was at the firm, they were still due 20% commission, amounting to £4.3m. Paul Chaisty QC for Rooney condemned the contract signed by the then 17 year old as overlong and exploitative, tying him to paying 20% commission over a “football lifetime”. Judge Brendan Hegarty QC, who had postponed his ruling at Manchester Mercantile Court until after the World Cup, held that the original contract Rooney signed with Proactive amounted to( unreasonable) restraint of trade as it was up to eight years long, noting that the Football Association recommended a maximum of two years. Judge Hegarty said that the agreement imposed “very substantial restraints upon Mr Rooney’s freedom to exploit his earning ability over a very long period of time on terms which were not commonplace in the market and which were not the outcome of commercial negotiation between equals” and ruled that the contract was unenforceable and that Proactive was only entitled to a “restitutional remedy” from the Wayne and Coleen Rooney (also a defendant) amounting to around £90,000, primarily for work Stretford undertook for Coleen prior to October 2008 when Stretford was still at Proactive. Coleen earns £13,000 for each episode of Real Women and £41,667 a month from her OK! magazine column. Stretford had previously brokered deals with Asda, Closer magazine and Diet Coke for Coleen.

Judge Hegarty rejected an application to appeal from Proactive’s lawyers although Ian Mill QC, representing Proactive, told the court the company would consider taking the matter to the Court of Appeal.
Paul Chaisty QC spoke about the case to The Times on the 22nd July 2010 (Law, P63).

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