Oakley Sues McIlroy And Nike

Oakley, the clothing and sunglasses company, is suing #1 golfer Rory McIlroy and Nike over breach of contract. Oakley contents that McIlory breached his existing contract with Oakley when he signed with Nike this fall. According to the lawsuit filed last week, Oalkley tried to use its “right of first refusal” to match Nike’s offer, but it was ignored by McIlory and his agent, thereby breaching the McIlroy-Oakley contract.

ESPN reports, “Oakley claims in its lawsuit that its contractual rights for McIlroy’s endorsements of its eyewear and performance apparel would be 30 percent of the Nike package. If the reports in European golf publications of a $200 million deal with Nike are accurate, then Oakley offered about $60 million to continue its deal with McIlroy. No one involved in the dispute will confirm the magnitude of the Nike offer, and it is described in the court papers only as an offer of ‘$_M.'”

Oakley says that by not renewing his contract, McIlroy has caused “irreparable” damage and is requesting an unspecified amount of money. Oakley does not list how much money they feel that they would have lost, but do list a $300,000 photo shoot for their 2013 product line that McIlroy was slated to endorse.

McIlroy’s management company released a statement Friday saying, “McIlroy has fulfilled all of his obligations to Oakley, and the claims in the lawsuit are entirely baseless.” They say that they have evidence that an Oakley marketing exec told McIlroy’s agent via email that, “We are out of the mix. No contract for 2013.” They argue that this amouted to a waiver of Oakley’s right of renewal with McIlroy.

However, after that supposed waiver, McIlroy’s agents and lawyers continued to bargain with Oakley for almost a month.

So what do you Rockheads think? McIlroy’s Nike deal is reported to be worth $200 and it’s doubtful that Oakley could have matched that. Is this just the cost of business and does Oakley have a case?