Legal Ethics in Sports
Part I. NCAA Eligibility Issues: Academic Integrity
Key Topic: Breakdown of NCAA Academic Issues and Recent Scandals
Many of the most known ethical issues in the sports agent space are those pertaining to college athletes and the National Collegiate Athletic Association (“NCAA”). It is important for an agent to know all the rules and state regulations, and be able to ethically recruit new clients. Failure for an agent to be ethical can result in consequences: A student-athlete can lose his or her eligibility and jeopardize his or future. An agent’s certification status and reputation can be jeopardized as well. Furthermore, an agent may face civil and/or criminal consequences. Over the years, scandals have rocked colleges and university tied to student-athletes. At all times, agents need to be mindful and keep abreast of all the current and new legislative acts, laws, and any new developments tied to student-athletes. One wrong move can lead an agent into losing his or her entire client roster, along with his or her ability to recruit prospective clients. Agents need to research and abide by all of the rules and state laws, because it is up to the agent to conduct business in an ethical manner. The agent cannot assume that the student-athlete knows or has been counseled on all of the rules. It is up to the agent to educate the student-athlete(s) to ensure ethical compliance.
Example: In regards to the ethical dilemma of paying NCAA players in order for sports agents to recruit them, a former agent described how he consistently violated state laws and the NCAA: by paying for lunches, various tickets, and helping out prospective student-athletes. This is one example on what provides a lot of confusion in the ethics of agents and adhering to state laws and college/university compliance. Just because you are not a member of the NCAA does not mean you are exempt from following their rules. An agent cannot break a rule, indirectly, and remain ethical at the same time.
One of the most notable examples of sports agents giving NCAA athletes improper benefits and jeopardized student-athletes’ collegiate eligibility is tied to the 2010 University of North Carolina football team. One individual was indicted on 14 felony counts for providing “gifts” for 13 University of North Carolina football players. One student-athlete alone was given over $18,000 in less than a year. The University of North Carolina was sanctioned in 2012 and was put under heavy probations. The NCAA issued formal sanctions against the team such as: a postseason ban, reductions in scholarships, probation, and player suspensions.
Part II. Media: Ethics, Integrity, and the Media
Key Topic: Discussion Within Media and Ethics Surrounding Sports Agents and Journalism
In today’s world of instantaneous information, it is very easy for information to be reached by millions of people in a matter of seconds. Sometimes, it is not the most flattering information about athletes. An exceptional agent needs to understand how to combat the negative press, as well as policing the false information that can become viral through social media. An agent needs to be on top of all of his or her clients’ press coverage and anything tied to public relations. An agent must also develop working relationships with national and local journalists for his or her clients, which will allow for them to discuss various issues that may come to light.
For example, there can be legal ramifications if an athlete posts a distasteful photo or text on his or her own social media accounts. There can also be legal ramifications if the athlete is commenting or posting on his friends’ accounts. An exceptional agent needs to understand how to prevent this from happening, and also know how to combat negative press if this situation occurs. At all times, an agent has to be able to deal with crisis management.
Communication is key. An agent needs to focus on clear communication with the athlete so that he or she knows what is appropriate and what is inappropriate. The agent is portraying a positive image of the player, and it is important for the player to know how to uphold that image. On a daily basis, an agent has to communicate with a player to always better him or herself and to surround him or herself with like-minded individuals. An agent teaches a player good standing fundamentals every day.
Example: Referring back to the 2010/2012 University of North Carolina football team scandal: one of the first issues that were brought to light and led to a formal investigation was when one of the University of North Carolina student-athletes posted on Twitter about a party in a club that was hosted by an agent. In the new age of social media, even prospective professional athletes’ lives are put under a high-scrutinized microscope.
Another more recent example is what took place during the first round of the 2016 NFL Draft with a University of Mississippi player who was projected to be drafted in the first quarter of the first round. Hours before the draft began, a picture that was tweeted through the player’s account showed what was allegedly him smoking marijuana with a mask. The player and his agent claimed that the account was hacked, and that is how the picture came to light. However, the damage was done and the player lost millions of dollars. Social media, if not monitored correctly, could have devastating effects on a professional athlete.
Another highly publicized example is when a star NFL player was in a dispute surrounding a contract extension. The media showed up and reported everything that was going on in the disagreement between the two parties. Ultimately, the Philadelphia Eagles chose not to strike a new contract with their own star player.
Part III. State-By-State Sports Agent Regulations
Key Topic: Sports Agent Compliance With the Various State Regulatory Boards
Part IV. Players Union: Agent Conduct and Disciplinary Actions
Key Topic: Complying With the Players Union
Part V. NCAA: Agent Certification for Representing Men's Basketball Student-Athletes
Key Topic: Complying With the Enforcement Certification and Approvals Group (ECAG)
Part VI. Collective Bargaining: What It Is and How It Plays a Role in All the Professional Sports Leagues
Key Topic: Discussion Surrounding Player Disputes Tied to Collective Bargaining and What Can Be Expected Throughout the Process
A league’s collective bargaining agreement (“CBA”) establishes specific elements of how the league will operate, such as: division of league revenues, team salary caps, free agency requirements, retirement benefits, restrictions on player mobility, provisions regarding the drafting of players, disciplinary rules, and other general regulations of the league. Agents need to issue spot and be able to dive into the collective bargaining agreement and discuss many of the various complicated provisions and potential ethical outcomes.
Every agent needs to be fully knowledgeable on the respective league’s collective bargaining agreement. The collective bargaining agreement holds the ethical standards for teams, league office, athletes, and even agents. The collective bargaining agreement is the governing document in which all parties, teams, player agents, and players must abide by. From an ethical standpoint, all parties must uphold a high degree of ethical behavior.
When an agent is dealing with teams or the league on his or her client’s behalf, it is important that the agent is able to use his or her collective bargaining agreement knowledge in order to make sure that all situations are handled ethically. The player agent, at all times, must abide by the collective bargaining agreement and also work within the confines of the collective bargaining agreement to ensure that all daily matters pertaining to the athlete are ethical. Acting unethically only hurts all parties involved and the agent’s reputation will deteriorate and hurt his or her chance of landing a new prospective client or at least keeping any active clients.
Example: Agents who are not well versed on the collective bargaining agreement can have a huge effect on a client’s career financially. One of the biggest mistakes a sports agent can make is how he or she advises his or her clients on injury protection, injury/non-injury grievances, and termination pay. There are many details that go into these topics, and if an agent is not extremely knowledgeable, it can cost his or her clients lots of money and possibly their employment with a club.
Part VII. Agent Recruiting: Compliance and Recruiting Guidelines
Key Topic: Client Poaching in the Sports Agent Industry
Stealing clients has become a big part of today’s agent game. It is a problem that the industry has had to deal with for many years. An exceptional agent does not need to poach clients; if the agent is as good at his or her job as proclaimed, he or she will not struggle to sign clients. An agent’s reputation is built by his or her relationship with his or her clients and the accomplishments achieved for his or her clients in terms of contract earnings, sponsorships, endorsements, placements, etc. Therefore, an agent should focus his or her time on building credibility in the field rather than looking to steal clients of other agents. Player agents must always uphold high ethical standards in representing their clients and should never seek to have another agent fired when recruiting a player.
Furthermore, agents who poach clients, and who are caught, risk their standing as certified athlete representatives with the players unions. There is a legal doctrine that provides legal remedies associated with unethically poaching another agent’s client(s). Tortious interference of a business relationship is a very serious legal matter and often applies to agents when one player switches over from one agent to a new agent. This is a very serious offense and civil penalties may become an issue.
The NCAA and state governments have put some metrics in place to dissuade unethical agent poaching; however, due to rising player salaries, agent impropriety does happen and ethical guidelines are ever-changing.
Several years ago, there was a famous case surrounding a marquee NFL player leaving his agent right before entering negotiations for his next contract. The agent only had a few clients; and the player had left him right before the negotiations started, to a much bigger firm. The agent filed a grievance with the National Football League Players Association (“NFLPA”) on the fact that he believed his client was poached.
Oftentimes, agents help introduce their clients to other professionals such as business managers and financial advisors. Example: A prominent agent introduced his marquee client to a financial advisor that would help manage the star player’s money. The financial advisor ended up making bad investments for the player as well as 30 other of that agent’s clients.