NFL star Odell Beckham Jr. scores win in Nike payment lawsuit

Last week, NFL wide receiver Odell B. Beckham Jr. won a significant victory in his lawsuit against Nike after a judge refused Nike's request to dismiss the case.

Beckham sued Nike (NYSE: NKE), claiming that the company was withholding millions from him.

Nike asked that the case be dismissed, claiming its files, which include details about its endorsement agreement with Beckham, were "highly confidential." Nike filed a motion as well to seal the documents.

In the original complaint, Nike was accused of refusing to pay royalties due to Beckham in violation its contract. Beckham is under several Nike contracts dating back to 2014. The complaint claims that Nike's competitor brand Adidas offered Beckham an offer of over $47 million dollars in 2017 including royalties and guaranteed extensions.

Nike has not yet responded to Business Journal's query regarding the denial.

The lawsuit stated that Beckham chose to stay with Nike after it matched its offer, even though Nike had not guaranteed him extensions. The documents filed in the lawsuit indicate that Beckham's contract would be extended in years six, seven and eight only if his net sales for years four and 5 met certain targets.

The lawsuit claims that Nike withheld more than $ 2 million in March, Beckham’s fifth contract year. Nike did not provide any explanation. The lawsuit claims that Nike told Beckham his guaranteed extensions were no longer based on net sales but instead earned royalties. This fundamentally altered the contract, according to the lawsuit.

The lawsuit stated that under Nike's newly-crafted position, net sales required to trigger the automatic extension ballooned up to $78,000,000 over Contract Years 4 & 5. The lawsuit stated that the parties had never agreed on these excessive increases to the benchmarks used to trigger the automatic extension.

The lawsuit claims that Nike did not release enough products to generate royalties in order to reach the trigger amount and that Nike deliberately lowered the sales of these products during the previous year of the contract.

The lawsuit also stated that Nike had charged Beckham over $2 million in the weeks 17 and 18, of the previous NFL season, for 'alleged violations'. Beckham denied that the violation took place in the documents.

Beckham has sued Nike for $20.6 million, claiming breach of contract, reformation, and breach of covenant of good faith, fair dealing.

Beckham, who was a free agent when the complaint was filed, recently signed a 1-year contract with the Baltimore Ravens. He is expected to earn more than $18 millions this season.