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So You Want to Be a Sports Agent?

By Kelli Masters

#57591383 | © Sebastian Duda | fotolia.com

It was 1996. The movie Jerry Maguire hit the big screen.1 And a generation of aspiring sports agents was born.

While attorneys may represent athletes in legal matters, being licensed to practice law does not automatically confer the right to represent professional athletes in contract negotiations. First, each organized sport has a set of rules and regulations governing agents in that sport, promulgated by the governing body or the union organized to represent professional athletes in that sport. Attorneys wanting to represent athletes in negotiations with professional teams cannot simply declare their interest in representing such athletes. They must be recognized, or “certified,” by the appropriate governing body. For example, an attorney wanting to negotiate a contract with an NFL team on behalf of a player must be certified by the NFL Players Association (NFLPA).2

In order to become certified by the NFLPA, an individual must have obtained a juris doctorate or other post-graduate degree.3 The prospective agent must submit an application during the requisite time period (typically early January through early February each year) along with a filing fee of $2,500. The prospective agent must also submit to a thorough background check. If approved based upon the application and background check, the prospective agent must attend a two-day seminar in Washington, D.C., in July and pass a written, timed exam administered by the NFLPA.4

The new agent exam includes multiple-choice questions covering the NFL Collective Bargaining Agreement, NFLPA regulations governing contract advisors and other pertinent information. Historically, passage rates were roughly 70 percent; however, the testing criteria became more rigorous in 2015, when the number of applicants with passing scores dipped below 40 percent.5 On several occasions, I have been asked to be part of the small group of certified contract advisors who draft questions for the exam, and I can attest – one must not take preparation for this test lightly. Just being an experienced lawyer and the winner of your office fantasy football league last year does not mean you are prepared to answer complex questions about salary cap allocations and NFL retirement benefits.

If you happen to be one of the unlucky and/or unprepared applicants who fail the new agent exam the first time, you may re-take the exam the following year without paying the application fee. If you fail a second time, you are prohibited from re-applying for certification for five years.

Passing the new agent exam is only the beginning. As a newly certified contract advisor, an agent is required to pay dues to the NFLPA as well as to obtain professional liability insurance approved by the NFLPA. This policy is required in addition to professional liability insurance carried as an attorney. The agent must also register in each state in which the agent plans to do business. While the Uniform Athlete Agent Act (UAAA) has been adopted in most states, the registration processes in each state are anything but uniform. Some states, such as Oklahoma and Texas, require filing fees as well as surety bonds of $50,000. Filing fees range from a $30 one-time fee in California to $1,000 in Oklahoma every two years. Many states do allow for reciprocity but apply strict guidelines to such filings. Applications are typically submitted to the state’s secretary of state, and no two states’ applications are identical.

Under Oklahoma’s version of the UAAA,6 an agent may not sign a student-athlete or even recruit a student-athlete unless that agent is issued a certificate of registration in the state of Oklahoma. An agent who violates the UAAA can be subject to civil and criminal actions, as stated in 70 O.S. §821.94:

A. An athlete agent, with the intent to induce a student-athlete to enter into an agency contract, shall not:

a. Give any materially false or misleading information or make a materially false promise or representation;

b. Furnish anything of value to a student-athlete before the student- athlete enters into the agency contract; or

c. Furnish anything of value to any individual other than the student- athlete or another registered athlete agent.

B. An athlete agent shall not:

a. Initiate contact with a student-athlete unless the athlete agent is currently registered pursuant to the Uniform Athlete Agents Act;

b. Refuse or fail to retain or permit inspection of the records required to be retained by Section 821.93 of this title;

c.Fail to register when required by Section 821.84 of this title;

d. Provide materially false or misleading information in an application for registration or renewal of registration;

e. Predate or postdate an agency contract; or

f. Fail to notify a student- athlete before the student-athlete signs or otherwise authenticates an agency contract for a particular sport that the signing or authentication may make the student- athlete ineligible to participate as a student- athlete in that sport.

C. An athlete agent is prohibited from any contact with a student-athlete who is not eligible to enter into a professional-sports-services contract. For the purposes of this subsection, “contact” shall not include general promotional brochures.

D. The Attorney General or a district attorney may bring an action to prosecute any civil or criminal actions as provided by this act. The Attorney General or a district attorney may also bring an action to recover actual damages, expenses, restitution, disgorgement of all compensation, consideration, gifts or profits, and penalties attributed to or flowing from a violation of this act.

The secretary of state can also assess an administrative penalty of up to $25,000 against an athlete agent for violating the UAAA. As noted in 70 O.S. §821.82, a family member is not considered an athlete agent subject to the UAAA unless that family member receives compensation, a gift or reward or the promise thereof in order to act on behalf of an athlete agent.

In addition to NFLPA regulations, state laws and federal legislation,7 sports agents are further subject to rules and policies implemented by colleges in order to maintain compliance with NCAA bylaws.8 By state law, agents must provide written notice to the athletic director of the school attended by the student-athlete within 72 hours of signing the student-athlete to an agency contract.9 Moreover, each school has its own registration process for agents who wish to recruit the school’s athletes. Many schools implement policies regarding time and place of all communications between agents and student-athletes.10 Often these policies change along with the coaching staff. Therefore, agents must stay in communication with the compliance officers of each school in order to confirm the appropriateness of all interactions.

Unfortunately, enforcement of these laws and regulations at every level is lacking. Less-than-scrupulous agents consistently disregard the rules in an effort to sign new clients. More than just cutthroat, the agent business can be downright dirty. Thus, the law-abiding agents are essentially at a disadvantage in the recruiting process. In order to “clean up” the agent business and its impact on schools and student-athletes, better enforcement is an absolute must.

The actual business of being an agent – and being a good one – requires dedication and sacrifice. Yes, being a skilled negotiator with an excellent working knowledge of the Collective Bargaining Agreement is vital, but so, too, is an understanding of the professional football industry: recruiting, the draft process, the relationship between the league and union, the dynamics within each club (the owners, the front office, scouting/personnel and coaching staff) and so much more. A football agent does not simply represent a client through the draft and the negotiation of a playing contract. An agent, or “certified contract advisor,” must also handle grievances, fines, injury/medical issues, crisis communication and a myriad of legal issues for both the athlete and his family. It is an extraordinarily time-consuming and expensive business, where regular travel is a given and player demands have increased.11 When viewed in light of the limited fees that can be charged by NFL agents (3 percent being the maximum fee, with the default fee being 1.5 percent), the business of being a football agent becomes a much less attractive option for most lawyers.

That said, if you are still intrigued by the possibility of working with athletes or in some capacity in the sports world, opportunities abound outside of being an agent. Sports law encompasses a wide variety of fields including intellectual property, antitrust, gaming, international law and more. Attorneys hold positions with teams (including general manager, salary cap director, operations director, player development director and, of course, general counsel), leagues and unions.

Some attorneys choose to work with athletes on the brand and marketing side; others chose to work for the brands themselves (Nike, Adidas and Under Armour to name a few). Still others find opportunities within athletic departments in schools. Even here in Oklahoma, opportunities exist for attorneys who are passionate about sports. And that is true whether you ever aspired to be Jerry Maguire – or not.

ABOUT THE AUTHOR
Kelli Masters is of counsel with the Fellers Snider Law Firm, where she has practiced since 2000. She founded KMM Sports, an Oklahoma City-based sports agency in 2005. She earned her Bachelor of Arts in journalism from OU and her J.D. with honors from the OU College of Law.

1. Crowe, C. (producer) & Crowe, C. (director), (1996), Jerry Maguire, United States.: TriStar Pictures.
2. See 2011 Nat’l Football League Collective Bargaining Agreement art. 69.1 (Aug. 4, 2011), nflpaweb.blob.core.windows.net/media/Default/PDFs/Active%20Players/2011%20CBA%20Updated%20with%20Side%20Letters%20thru%201-5-15.pdf.
3. Exceptions to this requirement are only granted if an applicant can prove, with documentation, seven years of negotiating experience. See www.nflpa.com/agents/faq.
4. See www.nflpa.com/agents/how-to-become-an-agent.
5. Liz Mullen, “Pass Rate Plummets for Agent Certification Exam,” Sports Business Journal (Oct. 19, 2015), www.sportsbusinessdaily.com/Journal/Issues/2015/10/19/Labor-and-Agents/Agent-exam.aspx.
6. 70 O.S. §821.81, et. seq. (OSCN 2018), Uniform Athlete Agents Act.
7. The Sports Agent Responsibility Trust Act (SPARTA) (15 U.S.C. §7801-7807) is modeled after UAAA. Violations of SPARTA constitute unfair and deceptive acts under the Federal Trade Commission Act and are punishable under 15 USC Sec. 41 et seq. by fines up to $10,000 per incident.
8. The NCAA has no authority to regulate agents, but, of course, member schools are punished for benefits provided by agents or agreements entered into with agents.
9. 70 O.S. §821.82.
10. In the state of Texas, agents may not contact student-athletes directly; rather the schools themselves set “Agent Days” in the summer, during which time agents are allowed to meet with senior athletes by invitation only. Section 2051.251 of the Texas Athlete Agents Act.
11. Agents typically spend tens of thousands of dollars to provide training, housing, rental cars, meals and more for draft-eligible clients preparing for the draft evaluation process. These expenses are not passed on to the client unless the client terminates the agent prior to signing his player contract with a team, so long as an enforceable written contract is executed and submitted to the NFLPA along with the standard representation agreement.

Originally published in the Oklahoma Bar Journal -- OBJ 89 pg. 26 (October 2018)