A client recently forwarded me an article about a lawsuit that Oakley brought against Nike and golf wonder-boy Rory McIlroy.  In that suit, Oakley claims that as part of its endorsement agreement with McIlroy it had a right to match any new endorsement proposals made to McIlroy.  Nevertheless, after Nike made a proposal to McIlroy, the golf star refused to consider Oakley’s tender of a match.  While it appears that Oakley’s claims in that case will rise or fall based on whether McIlroy/Nike can prove that Oakley waived its right to match, the dispute reminded me that rights to match (sometimes denoted as  “rights of first refusal”) can turn out to be extremely valuable assets in a host of contexts.

Perhaps the most common use of rights to match arises in the context of restrictions on the transfer of equity in a closely held business.  Indeed, without such restrictions, a competitor might easily be able to buy out a minority equity holder and instantly gain access to key company data.  Even if that is not a genuine concern, those involved in a closely held business generally do not want a stranger to suddenly … Keep reading