Ch 11. Sports Agency Flashcards
What is sports agency?
a relationship between a principal and an agent
Are agents unique to sports?
nope
How are sport agents regulated?
through an area of common law known as Agency law
What is agency law?
dictates the fiduciary (acting in the best interest of the other party) duties of both the principal and the agent
Through agency law, what is the definition of agency?
describes a relationship in which one party, the agent, agrees to act for and under the direction of another, the principal
What is the purpose of agency law?
establish duties that principals and agents owe each other
Agency law is an important component to what?
the player representation industry
What are the duties of the agent?
obey, remain loyal, exercise reasonable care, notify, and account (for finances and information)
What are the duties of the principal?
- compensate the agent for their service
- reimburse the agent for any expenses incurred while acting on the principal’s behalf
- comply with a contract if one exists
Who was the first sport agent and who did they work with?
C.C. “Cash & Carry” Pyle who worked with Red Grange in the 1920s
When did sport agents start becoming popular?
the 1960s when Mark H. McCormack worked with Arnold Palmer
What did Mark H. McCormack figure out about Arnold Palmer?
he can make a lot more more off endorsements than playing in professional games
What was extremely rare before the 1970s?
pro team sport athletes to have an agent
Why was it difficult for athletes to have an agent?
teams would refuse to deal with agents and there was no free will until 1976 (no leverage to negotiate)
What was created in the late 1990s?
uberagencies
a few bullet points on the slides that I do not understand
What were two of the largest firms in the 2000s?
CAA and Wasserman who brought out smaller firms and created a monopoly
slides about the 5 factors
What are some of the functions of a sport agent?
- recruiting clients
- financial planning
- dispute resolution
- post-career planning
- marketing the client
- administering client contracts
What are the three models of a sport agencies?
- freestanding sport management firm
- law practice-only firm
- sport management firm affiliated with a law firm
What is a freestanding sport management firm?
a full-service firm providing a wide range of services to the athlete/client
What is a law practice-only firm?
lawyer performs many legal tasks (contract negotiation, arbitration, legal counseling, dispute resolution, and the preparation of tax forms)
What is a sport management firm affiliated with a law firm?
each fills a void by providing the services the other does not offer
What are small firms?
representing athletes in one sport and focusing on one or two services for the athletes or coaches
What are large firms?
an agent that is part of an international conglomerate representing many athletes in a broad range of sports
What are the advantages of a small firm?
athletes receive increased attention and are actually represented by the person they original signed a contract with
What are the disadvantages of a small firm?
a solo agent cannot offer as many services as a large firm
What are the advantages of a large firm?
better reputation, increased bargaining position, and other star players
What are the disadvantages of a large firm?
a large stable of clients and the athlete may feel like a “small fish in a big pond”
When a conflict of interest is present, can an agent continue to represent a principal?
YES, the agent has to disclose the conflict of interest to the principal and gives the principal the option to work with a neutral party in place of the agent
What are some duties of marketing an athlete?
- assess current image
- develop plan and polish client
- select endorsement opportunities
- understand that career could be short-lived (market deals more important)
- be familiar with marketing opportunities restrictions
What is financial planning?
covers banking and cash flow management, tax planning, investment advising, estate planning, and risk management
What do sport agents often do in financial planning?
attempt to take on this function without proper skills and training
What can happen with improper financial planning?
can lead to allegations of incompetence and negligence
What protects athletes from career-ending injuries?
disability insurance
What are the requirements to become a sport agent?
no federal established education standards or degree requirements necessary to become a sport agent
How many registered agents are there in the NFL?
830 (75% of players are represented by 17% of the agents)
Professional degree is not always required to become a sport agent….
but expected/mandated by the players association
What are the key skills required to become a sport agent?
knowing the industry sector
- contracts, policies, rules and regulations, constitutions, and collective bargaining
- negotiations
- managing client with media
CONTRACT NEGOTIATION
What is a contract?
a written or verbal agreement between two or more parties that creates a legal obligation to fulfill the promises made by the agreement
What are the requirements for a valid contract?
- mutual assent (offer and acceptance)
- consideration (both parties offer something valuable)
- capacity (over 18)
- legality (subject must be legal)
What is a break in a contract?
the contract “promise” is broken
Can breaches happen for full or partial parts of a contract?
it can happen for BOTH
What is the remedy for a breached contract?
money but can also be an injunction
What does the public believe about the agent profession?
there is much criticism that it is excessively unethical
What is one current issue about agent clients?
the clients are becoming younger and signing as a minor and NIL rules
What are five key problems in the agent profession?
- income mismanagement
- incompetence
- conflicts of interest
- charging of excessive fees
- overly aggressive client recruitment
What is true about agent regulation today?
they must maneuver through a maze of conduct-governing regulations
What regulates agents?
organizational policies and by-laws
What are the different organizational policies and by-laws?
- players’ associations
- state legislation (43 states have regulations)
- federal government (SPARTA of 2004)
- NCAA
How can athletes seek recourse (source of help in a difficult situation)?
under tort, criminal, agency, and consumer protection laws
