Puma Claws Carter for Breach of Endorsement Contract

Awards $13.5 million in damages, injunction for breach

Toronto, July 22, 2000 -- After a season filled with awesome displays of gravity-defying dunks, Vince Carter seems destined for imminent superstar status. However, he'll have to do so in a different pair of shoes. The Toronto Raptors star guard has been ordered to pay $13.5 million in damages to his shoe company, Puma, after an arbitrator ruled he was in breach of his contract with the firm. In addition, the arbitrator issued an injunction against Carter that prevents him from endorsing or wearing the apparel or foot-wear of any competitor of Puma's for three years, and requires him to pay the fees and costs of Puma's lawyers.

Prior to his rookie season in 1999, Carter signed a multimillion-dollar 10 year contract with Puma, but the deal has unraveled quickly. Carter initially claimed that the shoes did not fit him properly and later claimed that Puma failed in its marketing obligation to him to make a signature shoe. While no Puma shoe bears Carter's entire name, Puma promotes a black and white model known as "The Vinsanity" that the company heralds as "the favorite shoe worn on the court by Puma athlete and NBA superstar Vince Carter."

Carter had stopped wearing Puma shoes this season, and seemed to wear a different brand of sneaker nearly every game. When Puma finally decided to take Carter to arbitration, it took the position that Carter was trying to escape his deal with Puma in order to negotiate a more lucrative deal with another manufacturer such as Nike, Reebok, or Adidas. Apparently, this argument struck a chord with the arbitrator, who levied the stiff penalty.

Unless some kind of agreement is reached, Carter will have to forego any endorsement income from sports apparel manufacturers for three years. Injunctions of this length are not frequency granted, unless the breach is "material" and the person committing the breach is "unique and extraordinary." [click here] Interestingly, Cater's deal with Puma was arranged by Tank Black, Carter's former agent. Black has been charged with defrauding several of his clients and has become a subject of a U.S. federal investigation into drug smuggling and money laundering. [click here]

Andrew Geiger