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The art of a bro' deal

Ed Templeton, like many in the "core" skateboard industry, rarely employs formal contracts. Deanna Templeton

"I've had a handshake agreement with Tod Swank that's been good for 19 years," Ed Templeton is fond of saying.

This may surprise some.

Within the skateboarding scene Templeton and Swank are not exactly Pollyannaish upstarts with marketing plans hastily scrawled on a restaurant napkin. Templeton is, of course, the longtime professional skateboarder, internationally recognized artist and owner of the highly regarded, blue-chip board company Toy Machine. Swank, himself a former professional skateboarder, is a pillar of the skateboard business community whose Tum Yeto corporation houses subsidiary brands such as Toy Machine, Foundation Skateboards, Pig Wheels, Dekline and Ruckus.

Naturally, one might assume that two standard bearers such as Templeton and Swank would have long ago decided to "memorialize" or otherwise "commemorate" their relationship in a legally enforceable document.

They are, after all, in business together.

Like any insiders, they have probably seen enough sponsor/athlete relationships go south.

However -- though Templeton has designed countless boards, T-shirts, socks and hats, retained riders, filmed videos, disbursed funds, organized demos and tours, managed a team, entered contests, cut checks, created and exchanged intellectual property, earned royalties, designed advertisements -- he and Swank do not possess one single legal document that clearly defines the parameters of their partnership.

They have no piece of paper with labyrinthine fine print and shadowy Latinate phrases.

They have no encrypted e-mail with ominous expressions like "acts of God," "severability," and "quorum."

They have no signature on a dotted line.

In other words: they do not have a contract.

Nor does Templeton possess a contract with any of his Toy Machine team riders. Like his agreement with Swank, Templeton's agreements with renowned pro skaters such as Leo Romero and Colin Provost have never been, and probably never will be, formalized on paper.

Instead Templeton prefers to rely on the sanctity of his "word."

"At Toy Machine we don't have contracts. That is just how I like to run it," Templeton says. "My word is my word. At the same time, in skateboarding there is sort of an unwritten performance aspect of it. If I come to a guy and I say, 'I am cutting your pay' or 'I am kicking you off the team' they know why."

In an age when doing something as mundane as riding a roller coaster or entering a skate park often requires signing something, this may seem strikingly Bohemian.

Perhaps to those of us leery of the thick layer of legal bureaucracy that seems to encroach upon an ever-wider swath of contemporary American life, Toy Machine's good faith arrangements may seem refreshingly simple, inspiringly idealistic. (Few among us relish the experience of purchasing a new cellular phone and gazing down at the sea of small print, the obfuscation through inundation. Why do we need a contract again? And, yes, of course, we leap at the chance, and diligently read, every Internet site's privacy policy before clicking "I agree.")

But to others, the informal underpinnings of Templeton and Swank's business partnership could give pause.

After all, many argue that the first rule of any business is "get it in writing."

But, far from being a striking exception, such "oral agreements" of the kind that bind Swank and Templeton still seem to be the norm within the core skateboarding industry.

For many skaters "handshake deals" or what Templeton somewhat archly calls "bro' deals" are standard operating procedure.

"It's always been an informal business, made by a bunch of people who aren't businessmen," Templeton says. "Basically, my experience is even if you have a contract there's a way for these corporations to get out and vice versa. So why even go there? They don't really mean that much. In skateboarding they haven't."

"Leave a lawyer out of it," says a pro skater, who asked to remain anonymous. "That may be what it comes down to -- skaters not having the best opinions of the legal system. Their interactions with it, on a street level [have them thinking] leave The Man out of it."

"I don't think it came from a position of let's do away with contracts; it was contracts weren't even a thought," Templeton says. "It was just like, 'Hey do you want to ride for my company?' " continues Templeton whose first pro-model was issued by New Deal skateboards. "I turned pro in 1990. I don't remember having a contract or even thinking about it. Or being offered one. It was just, 'Here's what you'll get paid and … OK.' "

A good number of attorneys would probably say, "Not OK."

"Obviously, not having a written agreement can lead to all kinds of problems with respect to who owes what and how much," says an attorney who has worked within the skateboarding industry. "I am not sure about enforceability of oral contracts. It probably varies from place to place."

Nonetheless, even some seasoned, legally sophisticated observers of skateboarding, see no inherent cause for concern when it comes to doing board business based only on one's word.

Circe Wallace, a senior vice president at Wasserman Media Group who is Paul Rodriguez's agent and no stranger to contract negotiation, essentially approves of the good faith agreements that are ubiquitous among board brands.

"I'd say a large majority of core brands -- whether it be wood, wheels or trucks -- are still done on a handshake," says Wallace, whose own career as an agent began when she, then a pro snowboarder, sued her sponsor for reneging on its contractual obligations after an injury, at which point she familiarized herself with some of the basics of contract law.

"A lot of times those deals work out great. It makes a lot of sense," she adds. "If it's working, it's working. If it's not, it's not. I think those kinds of relationships are extremely important. At the core of skateboarding, wood is kind of who defines you and there's not huge margins. These are kind of what make that your clique, or your tribe. It's a little bit more like art. It's a real creative space. And there's not a ton of money being made, so how screwed can anyone really get? The reality is, it's not like an agent is getting rich off a wood deal. And to be honest I stay out of those relationships most of the time because who am I to tell them how they should handle their business?"

"My opinion is you should always have a third party looking out for your interests, if you're signing a contract," continues Wallace. "If you're not, and it's a symbiotic relationship and you're doing good things for each other, and you're getting a check every month, then perfect. We would all love to have that kind of trust and mutual reward, you know?"

That previously mentioned anonymous pro skater says he has never had that much at stake.

"Like, 'You said you would pay for transportation to Tampa. And it's $300.' 'Ok, we'll cover $200.' And I'll either try and pay for the other $100 or get someone else who will," he says. "It's handled the way business deals are handled, just without it written down."

The point is that as long as professional skateboarders stay within what Wallace refers to as "the hard goods space," much of their responsibilities will likely remain unwritten.

[Although it's enough to wonder how a sport as subjective as skateboarding – a sport big enough to make room for skaters as disparate stylistically as Ryan Sheckler and Jason Dill – could even define terms of a rider-board sponsor agreement. Henceforth, the company ("we") and the signee ("you") give full authorization and consent to "rkip" and shall henceforth produce sufficiently "sick" footage with mutually acceptable "gnar" to "ledge-combo" ratio. I declare under PENALTY OF PERJURY under the laws of the state of _________________ that the foregoing is true and correct. WITNESS my hand and official seal.]

Though they occupy different positions in the skateboarding industry, in essence, Wallace, Templeton and the pro skater all agree. Not all that much money is at still stake when it comes to hard goods sponsorship, so things need not be that formal. Additionally, given that this aspect of the business still has a cloistered, small-town feel and -- like a small town where well-kept secrets are few and far between -- agreements are generally upheld.

You don't necessarily believe you need to sign a waiver if you know the country doctor. You don't generally have to show an identification at the post office if you know the local mailman. You perhaps trust the insurance agent on the corner because he's always been there, and you know all of his customers. Perhaps in the big bad world there is a need for fancy, slick lawyers, but in the skateboarding village, your word still means something.

Balancing credibility with logo placement

But of course, in the case of high-profile professional skateboarders such as Paul Rodriguez -- who do deal with multinational corporations like Mountain Dew and AT&T on a daily basis, and do command large sums for corporate appearances, marketing meetings, retail promotions and other "activations" -- contracts sharply prescribe most aspects of their professional lives.

For example, in the case of Rodriguez, a contract specifies that he will wear a Mountain Dew hat. A contract specifies that he wear a Target logo not only on his deck, but in a particular part of his deck.

"Oh, it's clearly defined. Logo size and placement. You name it," Wallace says. "Especially for an athlete of Paul's stature. You define their market value, by what any single brand is willing to pay for a particular space. That's kind of your real estate."

In fact, where and how large a logo will be on his person, is a common point of contention for Wallace in contract negotiations. Many corporations would be all too happy to splash their logo across Rodriguez's shirt, the bigger the better. Why? Because of his perceived cachet, his presumed "coolness."

But here's the rub: If Rodriguez was the kind of rider who was willing to simply become a billboard, to let his persona be subsumed by corporate sponsors, he would lose some of that cachet, perhaps be seen as "selling out," thereby decreasing the very thing that makes him attractive to corporations in the first place. If he wears too many logos, or logos of the wrong kind, or wrong size, he loses some of his coolness.

So it's something of a Catch-22. The sponsor wants to pay a skateboarder to prominently display their logo because the skateboarder is cool, but the minute he too prominently displays the logo he risks becoming uncool. Yet, many multinationals, in Wallace's view, fail to understand this dynamic, are clumsy when it comes to this delicate dance.
This can sometimes make for sticky contract negotiations.

"If I had a dollar for every deal we have turned down because the expectation from the corporate brand is so disconnected from what the athlete is comfortable doing," Wallace says. "There is an unrealistic expectation of, 'Slap this sticker on your board, and maybe we'll get 30 seconds on TV and then we'll sell a lot more tacos.' It really has to be a balanced relationship. You pay to use the name and likeness of this individual because they give you cultural relevance. But it's hard for [bigger brands] to understand nuances, if they're coming from traditional sports, stick and ball, which is really cut and dry. But in skateboarding, it's like no one is going to do any single deal at the expense of their market credibility or career. It can make or break you."

To put it plainly, many of those skaters who are sponsored by major corporations would like the logos to be smaller because even they think corporate logos are potentially uncool.

"Of course. The more obscure the better," Wallace says.

So, as with most negotiations, compromises must be made on both sides.

"Everyone would love to have clean board," Wallace says. "But the reality is it's hard to show value to the brand without some kind of on-body or board branding. So let's say for his Mountain Dew contract he has responsibilities to wear certain logos in certain places at all times," Wallace says. "But no one is going to slap a logo on their T-shirt that's not a core brand. Even though it might not be your biggest paycheck, it's important that the core brands get the majority of the love, purely from a credibility standpoint. I will say that is the biggest challenge that I tend to have. The brand is mad that someone else is getting a larger logo when they have made a larger investment."

Trend toward formal contracts

All in all, whether or not you admire skateboarding's "bro deals" and handshake agreements, their ubiquity is probably ebbing a bit.

"[It's] clearly been changing during my life," Templeton says. "And especially sped up over the last few years with all these companies buying other companies. And some of these skate brands are owned by giant companies."

Wallace says she believes formal contracts are on the increase because there has to be some accountability for large corporations.

"So, yes, I see it moving more in that direction," Wallace says. "The most successful brands tend to have an opportunity for acquisition or investor dollars. And at that point, they need to have some tangible assets. And athletes can be accounted for as that. And those contracts are pretty standard endorsement agreements with simple, two to three pages outlining services. Legal 101, boiler plate. 'Services,' 'term,' 'dissolution.' It's our job to make sure there are no weird things in there, like discretionary termination clauses. The one that really gets me the most worked up is 'discretionary termination.' It's like, why even have a contract?

"A contract, at its core, is important for anyone in the business realm, period," continues Wallace. "To define mutual expectations and deliverables. Sometimes it's symbolic. The reality is most contracts you put in a drawer and never look at, unless you get divorced."