Ethical Quandaries of Player Agents in Professional and Amateur Sports

It is without doubt that sports agency has grown exponentially over the past couple of decades (Neiman, 2007). Player agents have become an increasingly important figure in the negotiations and bargaining of athlete contracts in professional sports ( Neiman, 2007). (Steinberg, 1991) also states how agents do no just assist athletes in the negotiations of contracts but that they also support athletes “in the transition to adulthood”. Athletes agents are presented with the challenging task of maximizing the economic returns of their clients throughout the duration of the clients short career in the spotlight (Staudohar & Mangan, 1991). Today unfortunately, professional athletes are viewed as an opportunity by agents to earn substantial amounts of money through the advertisement of their image and style (Staudohar & Mangan, 1991). This has led to dishonest agents not working within the best interest of the athletes themselves and has caused much controversy within the media and the public (Crandall, 1981). Despite the need for them, player agent’s have come under a miraculous amount of criticism due to the impact they are having on professional athletes and on professional sports as a whole (Steinberg, 1991). The purpose of this essay is to delve further into the role of player agents in professional sports in much more detail. Key areas such as the history, roles and responsibilities of players agents will be discussed, as well as a player-athlete relationship and the returns of sports agent’s. Following this, the essay will assess the impact of player agents on specific amateur sports such as college football and non professional Olympic sports and determine whether they have any sort of role to play, as they already do in professional sports.

In previous decades, negotiations happened directly between sports franchises and the athlete’s (Neiman,2007). Having left their education early in pursuit of an athletic career, negotiations were not an athlete’s strength, having failed to acquire the sufficient skills needed (Mason, 1997). This allowed for sports franchises to take advantage of the athlete’s lack of negotiation knowledge and skills (Mason,1997). As a result of this, The Major League Baseball Players Association bargained with Major League Baseball in the 1970’s for the athletes right to have an associate to assist them during consultation with a club ( Neiman, 2007). This allowed athletes to maximize their salaries and cement their bargaining position due to the experienced and skillful negotiations of their agent (Neiman, 2007). Many athletes still hold a strong stance against having a third- party representative, opting to negotiate for themselves ( Crandall,1981). Although the help of an agent can be of great assistance and benefit to athletes ( Crandall,1981). Originally, the primary role of player agents was only to handle player contracts with professional sports teams (Mason & Slack, 2005). However, as money became an increasing factor in sports the impact, roles and responsibilities of player agents also increased (Heitner & Saul, 2013). As well as dealing with player contracts, agents now dealt with endorsement deals , marketing contracts, trust funds, tax advice, planning for retirement and many other key areas, ensuring that athletes take full advantage of their public image ( Mason & Slack, 2005). This evolution led to an increase in scandal as agents became more involved in their athlete's lives, allowing them to abuse their power and perform in the best interest of themselves rather than the athlete (Heitner & Saul, 2013)( Crandall, 1981).This along with the boom of agent representation in sport has resulted in agent- athlete relationships becoming almost as important as an athlete’s relationship with their team itself (Crandall, 1981).

Agency falls under common law and therefore the agent is subject to this when forming a relationship with an athlete (Neiman,2007). Agents and athletes have a fiduciary relationship, meaning agents must show honesty , loyalty and good faith to their athlete while acting in a selfless manner for the benefit of the athlete (Champion, 1996). When discussing athlete contracts an agent must always keep the best interest of the athlete in mind ( Hynes,1997). A fiduciary relationship is primarily an alliance based on trust, as it is an uncertain rapport with the results often being vague and ambiguous (Hynes, 1997). (Champion 1996) claims that the standard representation contract is the main key to a player- agent relationship as it highlights the rights and responsibilities between the player and the agent. The contract states that the agent must provide a good faith effort on behalf of the athlete when bargaining, even though he may not always be successful (Champion, 1996). The contract also states that the agent must avoid conflict of interest when conferring on behalf of the athlete (Champion, 1996). Although agents may provide many functions for an athlete their main goal is to negotiate an athlete’s employment contract with a team (Neiman, 2007). In doing this the agent must reveal all necessary information to the athlete of the contract being offered by the club and must also be aware of the collective bargaining agreement of the league in which the athlete will work (Neiman, 2007). The agent must also be educated on all relevant information on the athlete themselves when negotiating in order to ensure the highest possible salary for their athlete for the longest period of time (Neiman,2007).

One case which defines a breach this sort of relationship is the Detroit Lions, Inc. V. Argovitz (Ring, 1987). In this case, Detroit Lions player Bill Sims was misrepresented and caught in a cycle of conflicts of interest (Ring, 1987). Sims was advised by his agent Jerry Argovitz, to join USFL team , Houston Gamblers (Ring, 1987) . Argovitz failed to mention to his client that he was the co-owner of Houston Gamblers at the time and attempted to carry on as Sims agent (Ring, 1987). This was an example of fraud, misrepresentation and a breach of the agents fiduciary duty which resulted in the second contract of Sims being rescinded ( Champion,1996). The court stated that although the player held interest in this USFL team, the agent failed to carry out his obligation of informing his principal of all facts that he was aware of, that may affect the players interest or influence the players actions (Champion, 1996). This case being a vivid example of an agent performing in their best interest as opposed to the athletes. Another case highlighting a breach in fiduciary duties is the case of Zinn V. Parrish (Champion,1996). Sports agent Leo Zinn was hired by football player Lemar Parrish to provide advice regarding business and tax matters, negotiate contracts, filter investment information, seek endorsement and assist with off-season employment (Epstein & Niland, 2009). It was agreed between the pair that Zinn would receive ten percent commission on all contracts he negotiated on Parrish’s behalf (Epstein & Niland, 2009). In 1974 Zinn successfully agreed a contract on Parrish’s behalf with the Cincinnati Bengals (Epstein & Niland, 2009).Having failed to carry out the majority of other tasks agreed, Parrish fired Zinn and refused to pay him the ten percent commission (Epstein & Niland,2009). Zinn sued Parrish seeking to recover his fee’s (Champion,1996). Parrish argued that Zinn acted as an investment advisor rather than an agent resulting in the contract being void as the agent was not registered ( Champion, 1996). Zinn being a prime example of an agent failing to perform their duties in good faith.

In recent years sports has grown into a multi-billion dollar industry (Garbarino, 1994). As this has happened the greed of sports agent’s has expanded with (Ring, 1987) describing player agents as “destructive, devious and inept”. According to (Crandall, 1981) agents often receive on average ten percent of what an athlete earns from all sources. When negotiating a contract agents often act in their best interest so that they receive their fee immediately even though it may be a non-profit guaranteed contract (Crandall,1981). This mean that should an athlete sign a long term contract , the agent would be over- compensated as the player might not see out the full amount of time of his contract (Crandall, 1981). An example of this is the case of Burrow V. Probus Management, Inc. (Burke,1993). In this case it was concluded by the district judge that the football player being advised by his agent to accept a bonus in a lump sum was not in the best interest of the client, but was for the purpose of the agent earning money immediately, which created tax liability (Burke, 1993). Due to the high rise of money in sports, certain sports agent’s have raised their prices accordingly and charge as much as twenty five percent of all contracts they secure for their athlete, which is an exceptionally large portion of the players salary ( Crandall,1981). This high demand has caused agents to be accused and charged of receiving an excessive amount of commission from player contracts (Crandall,1981). In Brown V. Woolf , Robert Woolf was hired on behalf of Brown to discuss a contract with the Pittsburgh Penguins (King,1987). This was during a time when the popularity of World Hockey Association had increased (King,1987). This could be used by players as a bargaining tool and produced an opportunity for players to increase their demands (King,1987). Brown opted to join the WHA and Woolf secured the contract (King,1987). Unfortunately for Brown, the instability of the league forced the original agreement to be renegotiated (King,1987). The new contract saw a reduction in compensation and the removal of a retirement fund (King,1987). Despite this reduction, Woolf seeked his full fee from the original contract as well as compensation (King,1987). In the end, Woolf only succeeded in receiving twenty-one percent of the twenty-four percent his client brown received (King, 1987). This depicts the modern trend in sport of player agents fees being based upon what the athlete actually receives and conveys the greed of player agents.

There is fierce competition among agents for athlete signatures, due to the potential high income returns (Shropshire, 1995). The 13.6 million dollar contract of Dallas cowboys star running back being just one example of this ( Shropshire,1995). Based on the salary alone, his agent is set to earn 136 thousand dollars a year, over a four year period (Shropshire,1995). With luxurious salaries like this boasted by both professional athletes and agents, it is unsurprising to see the high demand of people desiring to become athletes agent’s (Garbarino, 1994). Unfortunately, the demand for life as an agent has created an influx in the ratio of potential agents compared to professional or superstar athletes (Willenbacher,2004). In April 2002 , it was reported by the NFL players association that almost 800 of the 1,200 certified agents, did not have a single client (Willenbacher,2004). This has caused many agents to become willing to do whatever it takes in return for amateur athletes signatures (Willenbacher, 2004). This has prompted agents to use illegal, unethical and unscrupulous approaches, which is unquestionably impacting amateur sports (Willenbacher, 2004). Agents attempting to persuade players to sign for then have broken the National Collegiate Athletic Association rules by offering money and other unethical tactics to recruit athletes (Shropshire,1989). The main goal of the NCAA is to prepare college there’s for professional sports (Shropshire,1989). The NCAA set forth rules governing eligibility of students athlete in order to maintain college eligibility and to preserve amateurism (Shropshire,1989)(Crandall,1981). NCAA regulations do not have the force of the law behind them, meaning agents are not required to abide by the rules and does not punish those who do (Shropshire,1989). (Crandall, 1981) claims that agents signing college athletes before they actually finish college is the most reoccurring form of agent abuse. Poor advice is another issue created by agents , which causes uncalled litigation (Crandall,1981).This is when professional sports teams sign college players before their college eligibility has expired (Crandall,1981). Many athletes who signs these secret contracts eventually breach them to sign for other teams, adding to an already unethical situation (Crandall,1981). Generally the court sides with the athlete in this case as they view the first contract as being unenforceable (Crandall,1981). The case of Houston Oilers, Inc. V. Neely is an example of litigation (Whitehall,1981). In this case, Ralph Neely secretly signed a contract with the Houston Oilers before his college eligibility expired (Whitehall,1981). Neely then proceeded to break this contract and sign with another team (Whitehall,1981). Surprisingly the court sided against Neely on this occasion stating that although secretly signing a contract is forbidden, negotiating the contract at any time is not and therefore does not allow the athlete to ignore their contracts (Whitehill,1981). Neely was forced to see out his initial contract with the Oilers (Crandall,1981).

Personally I am a supporter of having an agent. I believe that any young male or female athlete with the ability to go on to achieve great success and make a large sum of money while doing so, would be naive not to hire a professional agent. Unfortunately, the difficulty of hiring an agent is that there are very few agents who are trustworthy. Agents nowadays, abuse their clients and focus primarily on their own needs rather than their athlete’s. In my opinion, money in sports has led to high demands of people wishing to become agents, which is dangerous for professional athletes but even more so for amateur athletes. With the demand to become a sports agent and the ratio of certified agents to professional athletes being so high, agents are under extensive amounts of stress (Willenbacher,2004) . This has influenced many agents and has urged them to develop a do whatever it takes attitude, which has led to unethical behaviour, cheating and poor advice to athletes. As stated by (Connors et Al. 2004), agents have been embedded into a system that pressures them into cheating or at least thinking about cheating. This is causing agents to not only cheat teams but also cheat their own athletes (Connors et Al.2004). The monumental sums of money available in sports, is without doubt increasing the greed of agents and leading them to cheat even more. Although I support having an agent, I believe that unless proper and strict regulations can be put in place for agents, sports at both amateur and professional levels, is under serious threat. The original intentions of sport being about fun and presenting athletes with the opportunity to achieve great accomplishments will be overlooked and it will focus only on money and profit.

In conclusion, the role of player agents in both professional and amateur sports appears to be a negative one. (Connors et al.2004) argues that “the biggest problem in sports revolves around agents”. This essay has assessed the history and roles of player agents in professional sports in great detail. Beginning with the simple role of negotiating player contracts, the impact and roles of player agents have continued to expand to an extent where the players control must be questioned. The essay discussed the importance of an athlete-agent relationship in professional sport. Although an agent-athlete relationship involves loyalty, honesty and working within the best interest of the athletes (Champion,1996), it appears that on many occasions in professional sports nowadays that this is not the case. This again highlights the negative impact of player agents in professional sports. It is clear that player agents also appear to have a negative impact on amateur sports. Many agents continue to enter the market every day, increasing to pressures to engage in unethical and illegal activity (Willenbacher,2004). Agents are putting both athletes and universities at risk of violating different regulations in favour of their own interest (Willenbacher,2004). (Steinberg,1991) goes as far as suggesting the new regulations may not even be enough to stop the cheating and negative impact of player agents and other solutions must be put in place.

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