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 3rd 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.