ULC

Athlete Agents Act Summary

With the proliferation of professional sport franchises in the United States, and the immense sums now paid to athletes for commercial endorsement contracts, it is no surprise that the commercial marketplace in which athlete agents operate has become very competitive.  And while maximizing the income of ones clients is certainly the American way (as well as good business practice), the recruitment of a student-athlete while he or she is still enrolled in an educational institution may cause substantial eligibility or other problems for both the student and the school, especially where the athlete is not aware of the implications of signing the agency agreement or where agency is established without notice to the athletic director of the school.  The problem becomes even more acute where an unscrupulous agent misleads a student.  While several states have enacted legislation to address these issues, agent registration and disclosure requirements vary greatly from state to state, causing confusion among student athletes, athletic departments, educational institutions, and the agents themselves. 

The Uniform Athlete Agents Act provides for the uniform registration, certification, and a mandated criminal history disclosure of sports agents seeking to represent student athletes who are or may be eligible to participate in intercollegiate sports, imposes specified contract terms on these agreements to the benefit of student athletes, and provides educational institutions with a right to notice along with a civil cause of action for damages resulting from a breach of specified duties.

The act requires agents to disclose their training, experience, and education, whether they or an associate have been convicted of a felony or crime of moral turpitude, have been administratively or judicially determined to have made false or deceptive representations, have had their agents license denied, suspended, or revoked in any state, or have been the subject or cause of any sanction, suspension, or declaration of ineligibility.  Agents are required to maintain executed contracts and other specified records for a period of five years, including information about represented individuals and recruitment expenditures, which would be open to inspection by the state.

While the act imposes significant disclosure, registration, and record-keeping requirements on athlete agents, those who are issued a valid certificate of registration or licensure in one state would be able to cross-file that application (or a renewal thereof) in all other states that have adopted the act.  This aspect of the act at once simplifies regulatory compliance for agents, while at the same time facilitates the ability of all jurisdictions to obtain dependable, uniform information on an agents professional conduct in other states. 

Because the potential loss of intercollegiate eligibility is a serious, and often unexpected, effect of entering an athlete-agent contract, the act provides student-athletes with a statutory right to cancel an agency contract within 14 days after the contract is signed without penalty.  In addition, athlete-agent contracts subject to the act are required to disclose the amount and method of calculating the agents compensation, the name of any unregistered person receiving compensation because the athlete signed the agreement, a description of reimbursable expenses and services to be provided, as well as warnings disclosing the cancellation and notice requirements imposed under the act.

The potential loss of a student-athletes eligibility is also a serious concern for athletic programs at educational institutions.  Accordingly, the act requires both the agent and the student-athlete to give notice of the contract to the athletic director of the affected educational institution within 72 hours of signing the agreement, or before the athletes next scheduled athletic event, whichever occurs first.  Where applicable, the agent must also provide this notice to a school where he or she has reasonable grounds to believe the athlete intends to enroll. The act would also provide educational institutions with a statutory right of action against an athlete agent or former student athlete (several, but not joint, liability) for damages, including losses and expenses incurred as a result of the educational institution being penalized, disqualified, or suspended from participation by an athletics association or conference, or as a result of reasonable self-imposed disciplinary actions taken to mitigate sanctions, as well as associated party costs and reasonable attorneys fees. 

Finally, the act prohibits athlete agents from providing materially false or misleading information or making a materially false promise or representation with the intent of inducing a student athlete to enter into an agency contract, or from furnishing anything of value to a student athlete or another person before that athlete enters into an agency contract.  The act provides that an athlete agent may not intentionally initiate contact with a student athlete unless registered under this act, and may not refuse or willfully fail to retain or permit inspection of required records, fail to register where required, provide materially false or misleading information in an application for registration or renewal thereof, predate or postdate an agency contract, or fail to notify a student athlete (prior to signing) that signing an agency contract may make the student athlete ineligible to participate as a student athlete in that sport.  The act would impose criminal penalties for violations of these prohibitions.

The Uniform Athlete Agents Act provides important protections for student-athletes and the educational institutions where they compete, creates a uniform body of agent registration information for use by state agencies, and simplifies the regulatory environment faced by legitimate sports agents.