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Valuing Contracts and Endorsements in Divorces Involving Professional Athletes
Professional athletes often earn substantial salaries pursuant to contracts that guarantee their income for several years. Many pro athletes have other revenue streams as well, including endorsement deals. If a married athlete subsequently divorces, the value of their contracts and endorsements often comes into play and can be a source of contention. If you or your spouse are a professional athlete and you want to end your marriage, it is smart to talk to a lawyer about how the decision may impact you financially. The assertive Dallas divorce attorneys of McClure Law Group understand what valuing contracts and endorsements in divorces involving professional athletes entails, and if you hire us, we will diligently pursue the best outcome possible in your case.
Understanding Community Property Division and Professional Athlete ContractsIn Texas divorce actions, property is either separate, meaning it is the sole property of one spouse, or community property, meaning it is the property of both spouses. Absent a premarital contract, most income obtained during a marriage are considered community property.
Under Texas law, all community property is subject to division in a divorce in a way that the court deems right and just. For professional athletes, though, determining whether contracts and endorsements constitute separate or marital property can be challenging. Contracts and endorsements signed before the marriage may fall under separate property, while income earned during the marriage typically counts as marital property.
Valuing Contracts and Endorsements in Divorces Involving Professional AthletesValuing contracts and endorsements in divorces involving professional athletes can be challenging.
As a community property state, Texas mandates a division of community assets acquired during marriage, which can include not only regular income but also the unique compensation structures found in athlete contracts and endorsements. Professional athlete contracts often contain multiple forms of compensation, including bonuses, signing incentives, and pay tied to specific performance markers. In divorce, determining which portions of these contracts qualify as marital property demands an in-depth analysis.
Financial experts play a critical role in assessing the value of professional athlete contracts by analyzing their terms to distinguish between community and separate property. They can also project future income from contracts, particularly when performance incentives or royalties might continue beyond the marriage.
Endorsement deals, which depend heavily on an athlete’s public image, marketability, and continued performance, can add another layer of complexity. Valuing these endorsements may involve forecasting potential income and assessing the conditions that could impact their future value, such as exclusivity clauses or royalties from product sales. Texas courts typically consider endorsements and related income as community property if the deals were signed or revenue was earned during the marriage. However, calculating their exact worth often requires financial professionals skilled in valuation, as some endorsements include royalties and revenue-sharing structures that may continue after the marriage has ended.
Consult a Trusted Dallas Divorce Attorney About Your CaseWhile property division is a source of disagreement in many divorce actions, valuing contracts and endorsements in divorces involving professional athletes can be particularly complicated. If you’re a professional athlete or the spouse of one facing divorce, it’s essential to understand your options for protecting your financial interests, and you should consult an attorney. The trusted Dallas divorce attorneys of McClure Law Group have ample experience guiding clients through the complex process of valuing contracts and endorsements in divorces involving professional athletes, and if you engage our services, we will fight to help you obtain the outcome you deserve. Our main office is located in Dallas. We also have a Collin-County office in Plano where we are available to meet with clients by appointment. We frequently represent people in family law actions in Dallas, Fort Worth, Rockwall, Frisco, McKinney, Irving, Richardson, and Garland. We also assist people with divorce cases in cities in Dallas, Collin, Denton, Rockwall, Tarrant, and Grayson Counties as well. You can reach us by using our online form or calling 214.692.8200 to arrange a confidential conference.
