The Law of Agency and Athlete Agents Chapter 10 Curtis Fearrington & Chaz Gross

Agency and Relationship Agency describes a relationship between parties in which one party agrees to act as a representative (agent) of the other party (principal).  Agency Relationships:  Employee and employer relationship  Principal and agency relationship  Principal and independent contractor relationship  Example:  Principal and agency- pro athlete & agent

Creation of Agency Relationships  Consensual  Informal and formal agreements  Agency agreement is a contract, and basic contract principals apply.  Both parties must have legal capacity to enter into the agency agreement.

Creation of Agency Relationships  Express agency- written or oral agreement  Implied agency- no written or oral agreement, but rather an agreement is implied by the conduct of both parties.  Apparent agency- conduct of the principal leads a 3 rd party to believe another individual serves as his/her agent.  Ratification of agency- agent did not have any authority to act on behalf of the principal, but the principal accepts the agent’s act after the fact.

Fiduciary Relationship  Fiduciary- Defined as a person who acts primarily for the benefit of another.  Both principal and agent owe duties to the other as parties to the fiduciary relationship.  The agent must act loyally for the principal’s benefit, while the principal must follow through on promises of compensation.

NCAA Athletes and Agents  A student athlete loses his/her eligibility if:  Enters into an agreement with an agent  Retains an agent  Accepts transportation or other benefits from an agent  Ever has agreed, orally or in writing, to be represented by an agent for the purpose of marketing his/her athletic ability or reputation in that sport.

Notification Rule  Both the agent and the student-athlete must notify the athletic director that an agency agreement has been entered into.  Notification protects institutions from sanctions/ penalties should an ineligible player be allowed to participate.  Possible sanctions/penalties:  Loss of scholarships  Prohibition from championship events  Probation  Negative publicity  Forfeiture of tournament winnings or other revenue

Professional Athletes and Agents  Main job of the agent is contract negotiation  The type of agency here is typically an Express Agency  Other types of agency occur when the agent acts as a financial advisor or endorsement representative.

Competitive Advantage Strategies  To ensure compliance with agency laws:  Apply basic contract principles when establishing or dealing with agency relationships.  Always put agreements in writing  Educate yourself and employees about legal restrictions on athletes and agents, as well as those imposed by NCAA and other associations.  Conduct informational seminars for student-athletes to help them understand the rules.

Conclusion  Legal issues affecting athletes and agents arise in two main areas—agency for professional athletes and agency for student-athletes. A thorough understanding of agency law is important to enable any sport manager to function effectively as a representative of a sport organization. Knowledge of agency law is imperative for anyone who wishes to negotiate player contracts, evaluate athletic eligibility for a university or the NCAA, or pursue a career as an athlete agent.