Nerlens Noel Is Suing Rich Paul And Klutch Sports For Costing Him $58 Million In Potential Earnings

Nerlens Noel has had a winding journey through the NBA, once thought to be a core piece of the Philadelphia 76ers Process-era teams, he bounced from Dallas to Oklahoma City to New York, where he’s established himself as one of the NBA’s best rim protectors off the bench for the Knicks.

His departure from Dallas to OKC was, in particular, a rough patch as he had turned down a lucrative offer from the Mavs as a restricted free agent in order to sign a qualifying offer that would allow him to become an unrestricted free agent a year later. A thumb injury derailed his next season and he would end up with the Thunder on a minimum deal that seemed to serve as a cautionary tale to players against risking their future on a qualifying offer.

However, there appears to be some significant behind-the-scenes drama that went on at that time involving Noel and Rich Paul, the head of Klutch Sports, that was previously not public knowledge. On Tuesday, this came to light in a lawsuit filed in Texas by Noel against Paul and Klutch Sports seeking $58 million in lost potential earnings for Paul’s role in luring Noel away from his original agent, Happy Walters, and advising him to take the qualifying offer instead of the Mavs’ contract offer, with Noel alleging that Paul failed in his duties as a fiduciary to act in his client’s best interests.

The lawsuit can be read in full here, courtesy of Darren Heitner at Sports Agent Blog, and makes some strong allegations that Paul began ignoring calls from teams about Noel and ignored Noel in favor of Klutch’s marquee clients. In the lawsuit, Noel says he was recruited by Paul at Ben Simmons’ birthday party, telling Noel he was a “$100 million player” and that he’d get him a “max deal” if he left Walters to sign with him and took the qualifying offer rather than the 4-year, $70 million deal that the Mavs were offering — that would’ve led to the commission going to Walters, having been the one who negotiated the contract.

After Noel got injured, the lawsuit alleges Paul grew disinterested in Noel and he was never presented with any plans for free agency.

Following the 2017/2018 season, Paul began to lose interest in Noel as a client. During the free agent season which began on July l, 2018, and after NoePs one-year contract with Dallas expired, neither Paul nor anyone at Kluteh Sports presented any real proposals to Noel in terms of strategies or ideas on how Noel might secure a long-term contract or even a significant contract for the following season. Indeed, as the 2018 NBA free agent season began, no real offers or deals were presented to Noel on the first day of free agency.

Noel’s lawsuit then claims there were rumors of a 3-year deal being on the table for him in OKC (citing a Woj tweet), which never materialized and he signed another minimum with the Thunder instead. It is at this point that the lawsuit gets particularly interesting as Noel claims his former Sixers coach Brett Brown told him Paul wouldn’t take calls from the Sixers about his availability.

Noel learned from his former coach with the 76ers, Brett Brown, who was still with the 76ers, that the 76ers front office had been trying to contact Paul to discuss the possibility of signing Noel to a contract where he would return to the 76ers. However, Paul did not take and/or return any of the calls from the 76ers. Noel also learned that Paul was not returning or taking calls from other team representatives who were interested in signing Noel for their respective teams,

After again alleging that he had been told about a long-term deal being in the works that never came to fruition, it states that Noel terminated his agreement with Klutch last December because of what he said was Klutch only serving “marquee clients,” and citing two other players who had similar issues with Klutch.

Noel’s frustrations with Paul came to a tilt in December 2020 when he learned that Paul had a history of mismanaging and ignoring other clients and costing them significant money. The belief was that Paul and Klutch Sports were only focused on serving their “marquee” clients and did not have the capacity to provide competent service to other clients such as Noel, or players like Norris Cole or Shabazz Mohammad, as additional example

The lawsuit closes with the assertion that he lost out on $58 million as a result of Paul telling him to turn down the Mavs’ $70 million offer and that he acted with “gross negligence,” “malice,” and “fraud” in his roles as a fiduciary.

Paul and Klutch Sports breached their duties to Noel by instructing Noel to cease negotiations with the Dallas Mavericks; instructing Noel to accept a qualifying offer from Dallas instead of the $70 million offer that was previously made; by failing to act diligently on Noel’s behalf in that Paul did little to no work in securing contracts, pitching teams, securing new endorsement deals, or offering strategies to Noel on how to maximize his value and earnings, and by refusing to take and/or return calls from teams who were interested in signing Noel to beneficial contracts. Paul and Klutch Sports otherwise provided poor business advice and focused more on other clients to Noel ‘s detriment.

Noel has suffered harm as a result of the negligence and gross negligence of Paul and Klutch Spons as alleged in this Petition in that he lost out on roughly S58 million in potential earnings and was forced to otherwise sign qualifying offers or league minimum payment contracts well below the actual market value of his services.

It will be very interesting to see how this holds up in court, as the obvious pushback from Paul and Klutch will be to the assertion that it was their fault he lost out on all that money, as they can fairly simply cite that Noel was aware of the risks of taking the qualifying offer and that it was the injury and performance that season that dictated a soft market for the young center, not a failure as an agency. How they respond to the allegations that they refused to take or return calls will be far more important to whether this suit manages to yield the intended results for Noel, as those are the most damning assertions of the entire suit.

As an agency, they are surely in contact with teams regularly, which phone records can show, but whether either side can prove Noel’s free agency was discussed in those calls will be much more difficult to prove one way or the other — which may be at the detriment of Noel’s case more than Paul’s.