Regulating the Modern Sports Agent

The allure of life as a sports agent has served to attract many people who want to be part of the sports industry. Movies such as Jerry Maguire only serve to further idolize the life of the sports agent. In the modern day of the growing sports agent business, up and coming industry giants, to include IMG, Octagon, and SFX along with the unscrupulous and unethical conduct by competing sports agents, have led to the enactment of new legislations. "To designate certain conduct by sports agents relating to the signing of contracts with student athletes as unfair and deceptive acts or practices to be regulated by the Federal Trade Commission," the Sports Agent Responsibility and Trust Act (SPARTA) was introduced on January 27, 2003 and was signed into law by President Bush on September 24, 2004. The evolution of the role of the sports agent has created ethical issues along with an inequality between the lawyer-sports agent and the non-lawyer sports agent.

The concept of the sports agent, in its infancy, has been around since the early 1900's. In 1920 the Sports Agent Charles "Cash and Carry" Pyle negotiated what is considered one of the first contracts negotiated by an agent. The contract was for "Red" Grange of the Chicago Bears, and was to play in eight games for one hundred thousand dollars. Due to the reshaping of the economic landscaping of professional sports in the late '70s, professional sports and the role of the sports agent has become a big

business. The end result of this boom has lead to an average NBA player salary of 4.9 million dollars, a huge jump from the 1967 average of twenty thousand dollars. A recent example is the 252 million dollar, ten year contract negotiated for Alex Rodriguez by Sports Agent Scott Boras (Geisel 2). Massive commissions related to contracts like this one has attracted new agents to the business creating fierce competition within the industry while leading to such acts like SPARTA due to the declining ethics of the sports agent.

As the sports agent business grows, the number of athletes has stayed relatively the same throughout the years, leading to corrupt agents. Arguably the most notoriously problematic sports agent is William "Tank" Black, the coach turned sports agent who persuaded college athletes into premature representation contracts, forcing many of them to sacrifice their remaining NCAA eligibility and turn into a professional athlete early. Further in Securities and Exchange Commission vs. William H. Black, James A Franklin, Jr., Professional Management Inc., Professional Management Consulting, Inc., and Silverline Development Corporation, LLC (No 8:00CV383-T-26B), the SEC filed civil action in February of 2000 against Black and associates for defrauding the athletes they represented out of millions of dollars in a series of investment scams. The SEC requested and obtained a temporary restraining order, freezing the defendants' assets and requiring them to account for the alleged fraud. In 2001 Black was sentenced to 6-year and 10-month for laundering 1.1 million dollars in a drug ring. Additionally in 2002 Black was sentenced to an additional five years for the defrauding of multiple NFL players that he represented (SEC release No. 16455).

In spite of acts like SPARTA, competitive inconsistencies still exist in the sports agent business as lawyer-sports agents struggle to compete with non-lawyer-sports agents. Private Associations such as the NCAA and some players unions have attempted to regulate sports agents; however they are relatively ineffective alone. NCAA bylaws prohibit athletes from entering into a representation contract with an agent or accepting gifts from an agent until the expiration of the athlete's college eligibility. Since the NCAA lacks jurisdiction to regulate agents, punishments fall directly on the athletes for infractions of the rules intended to regulate sports agents. Some states have drafted agent-specific statutes; these jurisdiction unique legislations have created some inconsistencies in the laws applied to sports agents.

In 2000 congress attempted to create uniformity among state regulations by enacting model legislation, the Uniform Athlete Agents Act (UAAA). The purpose of the act was to regulate sports agents with business tactics of "secret payments or gifts to the athlete, undisclosed payments or gifts to friends and relatives who may be in a position to influence the athlete, unrealistic promises and considerable arm-twisting." The UAAA is not binding on each state but can be adopted at each state's discretion. The act regulates sports agents reporting, registration, and record keeping requirements; it also includes a list of penalties for sports agent misconduct. Thirty-six states, the District of Columbia and the U.S. Virgin Islands had adopted the UAAA as of July 11, 2007 (NCAA).

Congress passed the federal legislation SPARTA in 2004 which was aimed at regulating sports agents, this legislation helped to compensate for NCAA's lack of jurisdiction over agents. SPARTA also allow for private parties, states,