Rich Paul, KSP sued for $4.9 million over alleged breach of contract

Klutch Sports Group and Rich Paul, the agency’s founder, were sued in federal court Wednesday by a former associate and longtime NBA agent for an alleged breach of contract. Mark Termini filed the complaint in the Northern District of Ohio on Wednesday morning that alleges he is owed more than $4.9 million, plus interest, in fees for the services he performed for the high-profile agency.

Termini alleges in his lawsuit that he signed a contract in 2014 with Klutch to be the agency’s primary contract negotiator, after he had already worked with Paul for some 15 months. In that role, Termini says that he was the one running contract negotiations for Klutch and its clients — saying that his deal with Klutch said he would be the “exclusive provider” of negotiations — and the main point of contact for teams, as well as the one who planned the company’s strategy with NBA organizations and the media.

Termini says in the lawsuit that he was contractually obligated to earn 25 percent of Klutch’s agent fees for any deal its NBA clients signed. He said that the original contract was then extended to go until Dec. 2, 2020.

But Termini alleges that Klutch and Paul told him around 2018 that they wanted to pay him less than he was owed by the terms of their contract.

“Rather than attempt to renegotiate the written Agreement with MTA and Termini, KSG and Paul began to unilaterally and improperly submit payments to MTA and Termini at such lesser amounts,” per the lawsuit.

Klutch initially reverted to paying Termini the proper amount that was due him, according to the lawsuit, before again sending him payments that he says were less than what he was owed.

“This lawsuit is inaccurate and misguided,” a Klutch spokesperson said. “And will be addressed in the proper forum.”

Termini had represented NBA players since 1986 through his agency, MTA. His clients included Ron Harper, Jim Jackson and Rod Strickland. He said he had negotiated more than $400 million in deals by the time Paul reached out to him in 2012. Paul launched Klutch that year. It partnered with UTA in 2019 and branched out to other professional sports.

Termini said that he was empowered to essentially be the lead negotiator for the agency. He said that he was behind the strategy that brought LeBron James back to Cleveland in 2014 and that he executed the 1+1 contract terms James had with the Cavaliers. He said that from 2014 to 2019, he was the one who “designed and implemented the strategy for all KSG player contract negotiations,” and held sway on when to accept and reject contract offers.

Termini says in his complaint that he negotiated contracts worth more than $1.4 billion for Klutch, including those for Draymond Green, Ben Simmons, Eric Bledsoe, DeJounte Murray and James.

“Despite Termini being the lead (and substantively the only) negotiator at all points of the player contract negotiation process, KSG and Paul individually and collectively took public credit in the media for the contracts negotiated by Termini in order to enhance Paul’s industry reputation and the value of the KSG agency,” Termini’s lawsuit said. “In or about 2018, with the credibility of KSG and Paul now established in the marketplace as a direct result of MTA and Termini’s contract negotiation achievements, KSG and Paul expressed a desire to pay MTA and Termini significantly less than the amounts required under the written terms of the Agreement.”

By 2020, Termini’s lawsuit alleges that Klutch and Paul used the NBA’s stoppage during the COVID-19 pandemic to wait to sign two contracts until the day after Termini’s contract with Klutch ran out on Dec. 2, 2020.

Klutch and Paul will have an opportunity to respond to Termini’s claims in court, and file a response to his complaint.

(Photo: Nathaniel S. Butler / NBAE via Getty Images)