The Business of Sports Agents

The Business of Sports Agents

Copyright Date: 2008
Edition: 2
Pages: 224
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  • Book Info
    The Business of Sports Agents
    Book Description:

    The legendary Charles C. "Cash and Carry" Pyle, considered by most to be the first sports agent, negotiated a $3,000-per-game contract for Red Grange to play professional football for the Chicago Bears in 1933. Today, salaries in the tens of millions of dollars are commonplace, and instead of theatrical promoters and impresarios, professionally trained businessmen and lawyers dominate the business. But whereas rules and penalties govern the playing field, there are far fewer restrictions on agents. Incidents of agents' manipulating athletes, ranging from investment scams to outright theft of a player's money, are far too frequent, and there is growing consensus for reform In The Business of Sports Agents, Kenneth L. Shropshire and Timothy Davis, experts in the fields of sports business and law, examine the history of the sports agent business and the rules and laws developed to regulate the profession. They also consider recommendations for reform, including uniform laws that would apply to all agents, redefining amateurism in college sports, and stiffening requirements for licensing agents. This revised and expanded second edition brings the volume up-to-date on recent changes in the industry, including: - the closing of one of the largest agencies - high-profile personnel moves - passage of the federal Sports Agent Responsibility and Trust Act - the National Football League's aggressive and high-profile efforts to regulate agents

    eISBN: 978-0-8122-0916-7
    Subjects: Business

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Preface to the Second Edition
    (pp. vii-viii)
  4. Introduction
    (pp. 1-8)

    Many variables impact the still-maturing sports agent business. This book focuses on this evolving industry, the issues affecting it, and how to improve and regulate it. In recent years the key issues and problems associated with sports agents have been visible more at the professional than collegiate level. But no matter the concerns that lie at the center of the sports agent storm, it is a business that captures the attention of many.

    In the past, the dominant sports agent images were the imaginary Jerry Maguire and Arli$$. The sports agent image of the new millennium is more likely to...

  5. I. Background
    • Chapter 1 Historical and Legal Foundations
      (pp. 11-21)

      The sports agent profession is not a new one. What is relatively new are the high finances and intense competition that pervade the profession. Most attribute the genesis of the athlete agent industry to theatrical promoter, impresario, and showman Charles C. “Cash and Carry” Pyle. Pyle, the agent for many athletes in the early part of this century, most notably the legendary football star Harold “Red” Grange,¹ the “Galloping Ghost,” was a charter member of the NFL Hall of Fame. It was Pyle who negotiated a $3,000-per-game contract for Grange to play professional football with the Chicago Bears in 1925....

    • Chapter 2 The Business
      (pp. 22-36)

      For many people, the life of a sports agent conjures up visions of a Hollywood lifestyle complete with fast cars, fancy clothes, and beautiful women. The motion picture Jerry Maguire and the television series Arli$$ did much to further glamorize the profession. SportsCenter snippets of agents in action, such as Drew Rosenhaus, have enhanced this even further. Some sports agents refer to their profession as “the business,” in much the way natives of New York or San Francisco refer to their towns as “the city.” Longtime successful agent Leigh Steinberg once described the stereotypical agent as “short and slick, he...

    • Chapter 3 Consolidation: An Evolving Industry
      (pp. 37-52)

      The last decade and a half or so has been marked by an evolution, influenced significantly by consolidation, of the athlete agent industry. In the 1990s, taking steps to create their own full-service sports agent firms, SFX Sports (SFX), Assante Corporation (Assante), and Interpublic Group’s Octagon (Octagon) followed the lead of industry pioneer IMG in planning for the evolution of sports into a component of the larger entertainment industry. Not all of the firms created in this merger era are still with us. Even IMG, the longtime stalwart, is revising its business model, to some degree due to the death...

  6. II. Problems
    • Chapter 4 The Basics: Competition for Clients
      (pp. 55-71)

      The nature of “the business” continues to evolve, and a major influence on its evolution is the competition for clients. As the above quotation suggests, competition among agents is fierce and can lead to unethical behavior. In 2005, Major League Baseball Players Association (MLBPA) Executive Director Don Fehr commented that the number of complaints concerning improper agent conduct, including “stealing clients, telling lies about other agents and giving players improper inducements,” is a significant and growing problem.² In fact, because of the competition, many individuals with outstanding business or academic records are not able to sign a student athlete as...

    • Chapter 5 Unscrupulous and Criminal: The Problem Agents
      (pp. 72-87)

      Problems associated with unethical agents have clearly seeped into the public consciousness. Newspapers and television news programs, both sports and nonsports oriented, report with regularity on problems that ultimately stem from agents’ intense competition for clients. Widely reported incidents include the criminal case of agent Tank Black, athlete agents who mismanage and misappropriate client funds, agent conflicts of interest, and agents who bestow cash and gifts upon student athletes and thereby precipitate the NCAA’s imposition of sanctions against the colleges for which these athletes play. These incidents have alerted the public and those intimately involved in the sports industry to...

    • Chapter 6 Conflicts of Interest
      (pp. 88-96)

      Factual scenarios involving financial mismanagement potentially implicate several of the obligations identified in Chapter 1 that agents owe to their principals. These obligations include the duty of an agent to comply with all applicable laws and the agent’s duty to notify the principal of all matters that may affect the principal’s interests.¹ Allegations of financial mismanagement also implicate agent obligations related to conflicts of interest—the subject explored in this chapter.

      Agents have been under the microscope for engaging in practices in which conflicts of interest may be present. As discussed in Chapter 1, critical features of the agent/athlete relationship...

    • Chapter 7 Ethics: Attorney Versus Nonattorney Agents
      (pp. 97-106)

      The sports agent industry has evolved such that licensed attorneys comprise a significant percentage of the agents who represent athletes. The intersection of the legal profession and the agent profession is often an uneasy fit. Rules governing the practice of law do not seem particularly well equipped to handle the unique nature of the sports agent profession. Law professor Walter Champion notes that “[the] ethical code of a well-established profession . . . may not perfectly fit to the emerging, evolving and dynamic relationships that are inherent in the sports arena.”¹ This uneasy fit creates a myriad of issues, including...

    • Chapter 8 Agent Wars
      (pp. 107-116)

      Sometimes agents breach obligations they owe to their athlete clients. In many instances, however, athletes engage in conduct that runs contrary to the obligations that agency law imposes upon them. Although an athlete, unlike an agent, is not a fiduciary with respect to his or her agent, the athlete possesses certain obligations vis-à-vis his or her agent. Athletes are required to reimburse agents for reasonable expenses incurred on their behalf, to indemnify agents for any loss that agents incur in properly carrying out duties on behalf of their athlete clients, and to afford the agent a reasonable opportunity to perform...

    • Chapter 9 The Last Amateurs on Earth: Amateurism and Opportunity
      (pp. 117-128)

      Chapters 10 and 11 will explore private and public efforts to address the problems associated with the athlete agent industry. The major impetus behind such efforts, particularly state-enacted agent legislation, is to protect the interests of institutions of higher education that may be jeopardized by student athlete and agent interactions that violate NCAA rules and regulations. The NCAA has established a complex set of rules and regulations that govern all aspects of intercollegiate sports. Included within this regulatory structure are rules that circumscribe the student athlete/agent relationship. These and other rules within the NCAA’s regulatory regime are premised on several...

  7. III. Solutions
    • Chapter 10 Knights of Columbus Rules? Private Sports Agent Regulations
      (pp. 131-143)

      With the growth of problems in the sports agent industry, many concerned parties have sought regulatory solutions. Historically, the key entities involved in attempting to formulate legislation as the panacea for the problems that afflict the agent industry have been the NCAA, NCAA member institutions, players’ unions, state and federal law enforcement and legislative entities, and, of course, professional athletes, student athletes, and sports agents themselves. This chapter examines the legislative efforts of private entities, and Chapters 11 and 12 explore public entities’ efforts to regulate agents. The discussion below describes the private entities that have attempted to regulate sports...

    • Chapter 11 The Laws
      (pp. 144-156)

      In a recruiting pitch to an athlete, Norby Walters said, “The normal sports agent . . . he’s not gonna shake white America. I have been shaking those people for years in that music side of entertainment. Now it’s time to shake ’em hard in the sports side of entertainment.”¹ The “shaking” needs to come from the regulators of the sports agent industry. This chapter examines public attempts to regulate sports agents. In examining the problems that may restrict the effectiveness of existing public regulatory schemes, it looks at changes, such as the Uniform Athlete Agents Act, that may ameliorate...

    • Chapter 12 A Uniform Approach: The Uniform Athlete Agents Act
      (pp. 157-164)

      Somewhat anticlimactically, a uniform law regulating sports agents became official in the first year of the new millennium. The full impact of the uniform law is still not yet clear. This chapter describes the process undertaken to develop the Uniform Athlete Agents Act, discusses the basic elements of the final product, and provides some analysis of its likely long-term impact.

      On August 3, 2000, the National Conference of Commissioners on Uniform State Law (NCCUSL) completed a process begun in 1996 when it passed the long-awaited Uniform Athlete Agents Act (UAAA).¹ The press release issued by NCCUSL identified the purpose of...

    • Chapter 13 Conclusion: The Absence of a Panacea
      (pp. 165-172)

      This book has presented an overview of the background and the current state of the sports agent business along with the legal principles that impact the industry. In addition, it has touched on efforts undertaken by diverse parties to address the problems that confront the business. For example, the discussion in Chapter 12 of the Uniform Athlete Agents Act illustrates the efforts made by lawmakers to reduce certain aspects of corruption in the industry. In addition, those who control and manage college sports are focused on reforms that are intended not only to ameliorate inequities between student athletes and their...

  8. Notes
    (pp. 173-202)
  9. Index
    (pp. 203-214)
  10. Acknowledgments
    (pp. 215-215)