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SPORTS AGENTS AND PROFESSIONAL ATHLETES: THELEGAL RELATIONSHIPS SURROUNDING PROFESSIONALSPORTSKatrina BarnettI. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2II. THE RELATIONSHIP BETWEEN AN ATHLETE AND AGENT . . . . . . . . . . . 5A. Contract Formation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51. Motivation for the Agency Contract . . . . . . . . . . . . . . . . . . . . . . . . . 62. Risks Surrounding the Agency Contract . . . . . . . . . . . . . . . . . . . . . 8a. The Uniform Athlete Agents Act . . . . . . . . . . . . . . . . . . . . . . 9b. The Sports Responsibility and Trust Act . . . . . . . . . . . . . . . 10B. Mutual Obligations Set Forth in the Agency Contract . . . . . . . . . . . . . . . . . . 131. An Agent’s Duties to an Athlete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132. An Athlete’s Rights and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18III. THIRD PARTY INTERACTIONS AND LIABILITIES . . . . . . . . . . . . . . . . . . . . . 23A. Possible Liabilities for Athletes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241. Contractual Duties and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 252. Tort Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26B. An Agent’s Role Concerning Third Party Negotiations . . . . . . . . . . . . . . . . . 271. Agent Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28IV. REQUIREMENTS AGENTS MUST COMPLY WITH . . . . . . . . . . . . . . . . . . . . . 29A. State and Federal Requirements for Agents . . . . . . . . . . . . . . . . . . . . . . . . . . 29B. League Requirements for Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30V. DIFFERENCES BETWEEN LAWYER AGENTS AND THOSE WHO ARE NOTLAWYERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35A. The Professional Code of Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35B. Compensation Differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38VI. RELATIONSHIPS AND INTERACTIONS BETWEEN A PROFESSIONALATHLETE, PROFESSIONAL TEAM, AND PROFESSIONAL LEAGUE . . . . . 39A. The Athlete’s Relationship with His or Her Team . . . . . . . . . . . . . . . . . . . . . 39B. The Athlete’s Relationship with the League . . . . . . . . . . . . . . . . . . . . . . . . . . 43C. The Relationship Between a Professional League and Its Member Teams . . 49VII. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501

I. INTRODUCTIONWould you be willing to put yourself and your career on the line for a professionalathlete? That is what sports agents do each and every day. From the recruiting process tosigning contracts, the agency world is not something handed to an agent on a silver platter.Amid a sports world where athletes can be taken advantage of, let alone be involved in scandalsor drug violations, it is important to know the law behind the athlete-agent relationship.The most important legal relationship for both an athlete and an agent is the player-agentrelationship. Once a player-agent relationship is formed, further legal relationships such as thatbetween the athletes‟ agent and the professional league or team become pertinent. Commonsense would have it that an athlete needs to trust his or her agent, but just as importantly, anagent needs to be able to trust the athlete he or she is representing.Recently media reports and investigations have questioned the formation andconsequences surrounding athlete-agent relationships. The NCAA has reprimanded manycollege football programs, such as those at the University of Southern California and theUniversity of North Carolina Chapel-Hill, for their players violating the rules set forth for playeragent contact while an athlete is playing for school that is a member of the NCAA.1 Manyarticles have been written detailing the NCAA rules agents and athletes have violated in pursuitof a promising career. Recently, Josh Luchs, a twenty-year veteran National Football League1See National Collegiate Athletic Association, Bowl Ban Among Penalties for Southern California (November 26,2010), available at:http://www.ncaa.org/wps/portal/ncaahome?WCM GLOBAL CONTEXT /ncaa/NCAA/NCAA News/NCAA News Online/2010/Division I/Bowl ban among penalties for Southern California; See also National CollegiateAthletic Association, NCAA Sets Reinstatement Conditions for Two UNC Football Players (November 26, 2010),available /Resources/Latest News/2010 news stories/September latest news/NCAA requires loss of contests, repayment for Burney and Williams; See also National CollegiateAthletic Association, News Release Archive, (November 26, 2010), available at:http://www.ncaa.org/wps/portal/ncaahome?WCM GLOBAL CONTEXT /ncaa/NCAA/Media and Events/Press Room/News Release Archive/2010/Infractions/.2

(NFL) agent came clean about the violations he committed throughout the years.2 Although thedetails of NCAA violations between athletes and agents are a discussion for another day, therules help bring to light the difficulties and the legal relationships behind the athlete-agentrelationship before it is even formed.The NCAA aside, there are many laws agents themselves must follow as they pursue andrepresent athletes on the professional level. These laws govern the athlete-agent relationshipfrom the point of formation until the contracts‟ dissolution. Beyond state and federal law, agentsmust abide by league requirements. Most professional leagues require agents to pass a leaguespecific exam before they can represent an athlete playing within the league. Furthermore,agents who are also lawyers must follow the Professional Code of Conduct within the state orstates of their bar memberships. If an agent who is a lawyer violates the Code he or she may bedisbarred or otherwise disciplined.Outside of the athletes‟ and agents‟ relationships is the relationship between an athleteand his or her team. Although an athlete‟s contract consists of mostly the collective bargainingagreement of the league, each team negotiates the particulars of the contract with the athlete orthe his or her agent. These particulars usually include player compensation as well as thepractice and game schedule that the player must comply with.The relationship between a professional league and its member teams also affects playersand their agents. Both recent scandals surrounding the use of performance enhancing drugs inMajor League Baseball (MLB), and other off-field scandals such as that surrounding NFL playerMichael Vick‟s dog fighting being brought to light in the media has affected the relationshipbetween a team and league. This is because the leagues have sanctioned the professional teams2Josh Luchs, Confessions of An Agent, Sports Illustrated (Oct. 12, 2010), available 10/12/agent/index.html.3

to enforce policies they have set in place concerning repercussions for athletes violating off-fieldor off-court policies. Teams in turn have taken the leagues sanctions seriously, and have beenstricter in handing out punishments, fines and suspensions to those athletes who violate leaguerules.3 This cohesiveness is important because teams and leagues must stand together as theyreprimand athletes who do not comply with the rules that have been set forth, either by theleague or by the law. Before getting to these issues though, it is important to understand thefoundations of each legal relationship an athlete or agent can be affected by.The legal relationships between professional athletes, agents, teams, and leagues areparamount to the success of the professional sports world. It is through these relationships thatnot only athletes, but their agents as well, can make a living by working hand-in-hand withprofessional leagues and teams.To understand the significance of these relationships, this paper will first discuss therelationship between an athlete and his or her agent. This relationship discussion explains theagency contract‟s formation, its importance and the risks surrounding its formation, and even themutual obligations it sets forth for both the athlete and the agent. Third party interactions thenbecome an integral part of the relationship between an athlete and his or her agent. Whileworking with third parties, such as professional teams, possible liabilities arise that both an agentand athlete must be aware of. An agents‟ major role, after all, is to negotiate contracts with thirdparties on behalf of the athlete they represent. In order to negotiate with third parties though,there are many state, federal, and even league requirements agents must comply with. If anagent is in compliance with these requirements, it is also important to understand the differences3See Mark Maske, Falcon’s Vick Indicted In Dogfighting Case, The Washington Post (July 18, 2007), available ticle/2007/07/17/AR2007071701393.html.; See also ESPN –MLB, Mitchell Report: Baseball Slow to React to Players’ Steriod Use (Dec.14, 2007), available at:http://sports.espn.go.com/mlb/news/story?id 3153509.4

between agents who are lawyers and those who are not lawyers. This is because there aredifferences in the types of conduct lawyer agents can act with verse those agents who are notlawyers. Athletes may also benefit from knowing these differences because they can affect themethod of compensation by which an athlete pays his or her agent. Beyond these interactionsare those that concern the professional athlete‟s relationship with his or her team and league, andeven the importance of a leagues interactions with its member teams. These relationships,overall, all affect the success of the professional sports world and help to show how the law playsa paramount role in sports.II. THE RELATIONSHIP BETWEEN AN ATHLETE AND AGENTAgency is the fiduciary relationship that comes about when a principal, or athlete,manifests assent to an agent for the agent to act on his or her behalf and subject to the athlete‟scontrol.4 In return, the agent must manifest assent or otherwise consent to represent the athlete.5An athlete or agent can manifest assent or intention through oral or written words, or eventhrough conduct.6 An agency relationship only arises when these elements are all present.7A. Contract FormationWhen an athlete and agent enter into a contract, they form a legally binding agreement inwhich both parties make promises that can in turn be enforced through legal remedies if eitherbreaches the agreement. These contracts bind the athlete legally to his or her specific agent untiltheir contract expires or is revoked. For this reason, it is important to understand why and how acontract between an athlete and agent is formed.4Restatement Third of Agency § 1.01.Id.6Id. at § 1.03.7Id. at § 1.02.55

Many athlete-agent relationships begin when an athlete is making the transition fromcollegiate athletics to the professional level. It is not uncommon, however, in sports such ashockey, for athletes to skip the collegiate level and jump right into their professional careers.Hockey players, for example, are able to enter into the National Hockey League (NHL) draft atthe age of eighteen, thus are known to have agents recruiting them at as young of an age asfourteen.81. Motivation for the Agency ContractImagine you are fourteen years old and have an adult telling you that you can make a lotof money playing the sport you love. Young athletes would likely love to jump into theprofessional sports world after hearing that they could make a living off of playing the sport theyhad lived and breathed for most of their young lives. But beyond the glory of having anopportunity to follow in the footsteps of great athletes they have aspired to become, are therealities that the sports world revolves around business. It is for this reason that the contractbetween an athlete and agent is so important. Courts have even ruled in favor of athletes beingrepresented by agents. In Los Angeles Rams Football Club v. Cannon, for instance, the courtstated:The Rams sought an injunction to keep [Billy] Cannon from playing in the AFL.In denying the Rams injunctive relief, the court permitted Cannon to breach hiscontract with the Rams for several reasons. The court opined that Cannon's age,business naiveté, and the fact that he was not represented by counsel duringcontract negotiations, made him susceptible to the sophisticated tactics of a clevergeneral manager like Pete Rozelle. Thus, the court emphasized that amateurathletes needed agent representation in order to protect their interests and matchthe negotiating skill of a general manager or member of a professional team.98NFL Draft Resources, (last visited Nov. 29, 2010), available at:http://proicehockey.about.com/od/prospects/NHL Draft Resources.htm9Stacey M. Nahrwold, Are Professional Athletes Better Served by A Lawyer-Representative Than an Agent? AskGrant Hill, 9 Seton Hall J. Sport L. 431, 437 (1999); See also Los Angeles Rams Football Club v. Cannon, 185 F.Supp. 717 (S.D. Cal. 1960).6

Agent representation becomes even more important because an agent not only negotiatescontracts for the athlete he or she represents, but also handles the athlete‟s media relations,endorsement deals, and finances.Athletes greatly benefit from the relationships they have with their agents. Not only doagents take care of the nitty-gritty details of the contracts between athletes and the team they playfor, but they also help athletes secure jobs outside of their time on the court or field.Endorsement deals become a large part of any well-known athlete‟s life. Lebron Jamesexemplifies how an athlete can use the influences of his or her stardom to help sell products forcompanies such as Nike.10 Endorsement deals also extend past the sports gear market and caneven influence what the society eats and drinks. For decades Wheaties boxes have featuredfamous athletes helping General Mills sell its products.11 Powerade and Gatorade both are wellknown for using athletes to promote their products as well.12Beyond endorsement deals, if an athlete experiences any trouble on or off the court, hisor her agent may also be responsible for clearing the air with the media. Although mediarelations are not always the responsibility of agents under an agency contract, they are becominga more integral part of an athletes‟ career and thus are becoming more customary within thecontract between an agent and athlete. When the agency contract includes a clause in which theagent is responsible for the athlete‟s media relations, the agent will fully support his or herathlete and make sure that the media portrays his or her athlete in the most favorable lightpossible.10The Huffington Post, LeBron James’ New Nike Commercial: ‘Should I Be Who You Want Me To Be?’, (Oct. 25,2010), available at: http://www.huffingtonpost.com/2010/10/25/post 567 n 773646.html.11General Mills – Wheaties, (Oct. 25, 2010), http://www.wheaties.com/.12YouTube – Andy Roddick Powerade Commercial, (Oct. 25, 2010),http://www.youtube.com/watch?v k981YyayjMQ&NR 1 and YouTube – Gatorade Super Bowl Commercial 2010– “The Journey”, (Oct. 25, 2010), http://www.youtube.com/watch?v 63oSn12n918.7

As it can be seen, athletes need agents so that they cannot only focus on theirperformances on the court, but also for professional advice off the court or field. Althoughagents may not always represent an athlete in legal proceedings, they do usually represent theirclients in every other professional circumstance the athlete encounters. In turn, agents wantathletes to sign with them so that they can make a living. It is safe to say that most agents areengrossed within the sports world and greatly value the opportunity to make a living representingathletes they love to follow on television, the radio, or even on the internet.13 As sports becomea bigger influence within the society, the role an agent plays becomes more important andprestigious.The result of an athlete needing an agent to represent him or her, and an agent wanting torepresent an athlete to make a living, is the contract that is formed between the two to make theirrelationship a legal obligation. With the enticing option of pursuing a professional sports careerverses continuing to play at the collegiate level, many athletes decide to terminate their collegecareers prematurely and hire agents to represent them as they pursue their professional careers.It is thus important for both an athlete and agent to understand the consequences of signing anathlete-agent contract before they do so.2. Risks Surrounding the Agency ContractIn response to athletes‟ commonly leaving college prematurely to pursue professionalcareers, the NCAA bylaws state that any athlete who signs a contract with an agent thereforerelinquishes his or her NCAA eligibility from that moment on.14 “The student-athlete who entersinto an agency contract may lose eligibility [to play at the collegiate level] and may diminish his13See infra Part IV(B).National Collegiate Athletic Association, Overview of NCAA Bylaws Governing Athlete Agents, (July 29, CAA/Resources/Latest News/2010 news stories/July latest news/Overview of NCAA bylaws governing athlete agents.148

or her value in the professional sports market. The educational institution may also lose postseason competition revenue and may be subjected to sanctions from the NCAA.”15 Thesesanctions, for example, can be handed out to institutions that unfairly gain team wins or postseason play due to an ineligible athlete continuing to play at the collegiate level after signing anagency contract.With agents enticing collegiate athletes with money and personal incentives to leave theNCAA and enter the major leagues, the NCAA felt the need to regulate what an agent wasallowed to do in his or her pursuit of an NCAA athlete.16 As former agent Josh Luchs shared inhis article Confessions of an Agent,17 many agents over the years have paid off student-athletesillegally in return for the athletes signing agency contracts with them once the athletes decide toenter the professional sports world. It is exactly these circumstances that the Uniform AthleteAgents Act (“UAAA”)18 attempts to eliminate in order to provide a more even playing field forathletes, and to protect the NCAA from agents who are willing to break the rules.a. The Uniform Athlete Agents ActThe UAAA was released in 2000 in response to the NCAA‟s concerns surroundingathlete and agent relationships.19 At the very least, the purpose of the Act was to provideuniformity to the inconsistent state legislative structure concerning sports agents.20 Although theUAAA is not itself legally binding upon agents, the National Conference of Commissioners onUniform State Laws (“NCCUSL”) composed the UAAA so that states could have the option ofadopting the Act into law.158 Vill. Sports. & Ent. at 10; Educational institutions may not allow players who are ineligible play on their sportsteams. If they do so they are breaching the NCAA bylaws and are thus subject to NCAA sanctions or punishments.16See supra note 2, at 2.17Id.18See 8 Vill. Sports & Ent. at 3; See also The Uniform Athletes Agent Act, available aa1130.htm.198 Vill. Sports & Ent. at 3.20Id. at 10.9

The NCCUSL itself was organized in 1892 as a state organization made up of lawyers,judges, legislators and law school professors.21 After composing of the