Legal Issues in the Domestic and International Sports Industry

National Collegiate Athletic Association (NCAA) levied sanctions, accusations of improper contact with agents and receipt of gifts have put college athletics in the headlines for all the wrong reasons lately. With the spate of allegations against colleges like Alabama and Florida, the sanctions levied against football powerhouse University of Southern California (USC), college coaches and athletic administrators nationwide have now been put on alert. Year after year college sport is faced with allegations and infractions that threaten to ruin it. It may be a different school or a different sport, but the story has not changed.

Those who would manipulate young athletes for their own financial gain and publicity stain the fabric of college sports. Alabama football coach Nick Saban, speaking at the Southeastern Conference Football Media Days, compared unscrupulous sports agents to “pimps. ” He went on further to say, “the unscrupulous ones ruin it for the guys who are trying to follow the rules” (Zenor). What are the NCCA rules governing agents and amateurism? In a PDF form on the Boston College Compliance Office website, NCAA rules regarding agents and amateurism note that:

A student-athlete shall lose his or her amateur status and shall not be eligible for intercollegiate competition in a particular sport if: 1) The student-athlete or family member negotiates, signs or enters into any written or oral agreement with an agent for representation at that time or in the future. 2) The student-athlete or family member accepts or receives any extra benefits from an agent or anyone who wishes to represent the student-athlete. 3) The student-athlete signs a contract or commitment of any kind to play professional athletics, regardless of its legal enforceability.

4) The student-athlete competes with a professional sports team or competes as a professional in an individual sport and receives any compensation for participation. 5) The student-athlete receives, directly or indirectly, a salary, reimbursement of expenses or any other form of financial assistance from a professional sports organization based upon athletics skill or participation, except as permitted by NCAA rules and regulations. 6) The student-athlete uses his or her athletic skills for pay or promise of pay.

7) The student-athlete shall be ineligible if he or she (or his or her relatives or friends) accepts transportation or other benefits from any person who represents any student-athlete in the marketing of his or her athletic ability. The receipt of such expenses constitutes compensation based on athletic skill and is an extra benefit not available to the student body in general. One does not have to be a lawyer to read and understand those seven rules. If these rule are so simple to understand, why are there so many allegations of breaking these rules?

With millions to be earned in the professional sport entertainment industry, sport agents have the chance to get a percentage of a professional athletes’ lucrative contracts. Adam Epstein in his book Sports law, states that a sports agent advocates and represents the legal and business affairs of a professional athlete, usually for a fee. So what is their involvement with student-athletes? Epstein goes on to say that the term “sports agent” refers to someone who solicits the services of a student-athlete with remaining collegiate eligibility to represent that student-athlete when the time comes to negotiate a professional sports contract.

According to Shropshire & Davis, even with the industry focus shifting to the professional level, concerns involving the athlete representation business remain at the collegiate level as well. Shropshire & Davis further writes, “it is at this level where, no matter how mature we give them credit for being, young men often succumb to the sometimes corrupt actions of mature professionals” (Shropshire, 2). Violation of the National Collegiate Athletic Association no-agent rules as well as the state and federal law have been occurring as far back as the 1970’s.

In 1979, after receiving $1000 from agent Mike Trope, former University of Maryland football player Steve Atkins said to Sports illustrated: “I knew I did something wrong. I didn’t want the NCAA to do something to Maryland, but I just needed some money to pay some bills. I didn’t want to sign with him but I just needed some money to pay some bills” (Shropshire, 3). Testifying before a Chicago grand jury, Paul Palmer, former Temple football star, admitted to receiving a $5000 loan and $200 per month during his senior year and in 1987 Jim Abernethy admitted to paying undergraduates to sign early (Ruxin, 5).

In 1989, Bo Schembechler, Michigan’s football coach, testified that two of his former players, Garland Rivers and Robert Perryman violated, National Collegiate Athletic Association rules when they signed contracts and accepted loans from agents before their college eligibility expired. He said he immediately revoked the scholarship of one of the players when he learned of the players’ actions (Fiffer). NBA players like Vernon Maxwell, Marcus Camby and most recently O. J. Mayo were accused of accepting gifts. In 1989, Maxwell admitted that he accepted cash payments from agents while at the University of Florida.

Camby also took responsibility for his actions. “I was a kid from the inner city not used to having too much,” said Camby, who is from Hartford. “I was a young kid making dumb decisions. Looking back, I would do things differently. But not having a father figure, not having much, it was hard for me,” he told the Boston Globe in a 2009 interview. As for O. J. Mayo, ESPN’s “Outside the Line” reported that in 2008, he received thousands of dollars in cash, clothes, and other benefits while in high school and during his only year at USC (Ruxin, Heitner).

In 2006, allegations surfaced that New Orleans Saints running back and Heisman Trophy winner Reggie Bush and his family had accepted payments and benefits from marketing agents attempting to entice Bush to sign a representation agreement with them (Shropshire & Davis). The NCAA is not against sports agents contacting with a student-athlete, although some state law forbids it, but it is adamant in its resolve to maintain its integrity as an amateur organization (Esptein). If the NCAA is working so hard to enforce the no-agent rule, why then are sports agents so inclined to break it?

Shropshire & Davis suggest that the income opportunities that can arise from a multimillion-dollar deal and the self-interest of sports agents have led to their unsavory conduct. They further stipulate, an agent who sees the prospect of making 2 to 5 percent of a multimillion-dollar contract, coupled with up to 30 percent of multimillion-dollar endorsement deals, may employ a wide range of techniques to secure that athlete. With more and more big contracts and endorsements to be had and sports agents becoming smarter and smarter, there is likely no end to this rules violation.

Forty-one states have laws on the books and the federal Sports Agent Responsibility and Trust Act, known as SPARTA, requires that states take the lead and prosecute rogue agents. According to John M. Phillips, on his sports blog Insight, states cannot afford to enforce the law, nor do they have the requisite resources or ability to cross state lines to do so. The number of prosecutions can be counted on two hands, and known violations — such as the one that led to the suspension of Alabama’s Andre Smith for the Sugar Bowl following his 2008 junior season — have gone unpunished. If this is the case, who is likely to pay the price?

In the wake of the Reggie Bush scandal, the effects of his no-agent rule violations, and additional allegations that Bush reportedly received money through a third party that was funded by the school, are now being felt at USC. In a recent announcement by the NCAA, USC was stripped of their 2004 – 2005 national title victory in football, and has been banned from any postseason games for the next two years, including bowl games. First-year football coach Lane Kiffin said: “There is some guilt in some penalties, but the punishment is too severe and that’s why the appeal process is taking place”(ESPN. com).

With USC out of bowl games the university is slated to lose millions over the next two years. It is likely that these sanctions will also affect the funding of others sports at the institution. Football generated more than $76 million in 2007-08, which is the athletic department’s largest income generator. Potential recruits who will decide to play at alternative programs due to the USC sanctions and ten current players per year who will not get scholarships will also pay one of the biggest prices. Until the rules change, inappropriate contact with an agent and accepting gifts will continue to be a cardinal sin in college athletics.

Many athletes targeted by unscrupulous agents and their associates have gone on to make millions, others have lost millions. Robert Ruxin, in his book An Athlete’s Guide to Agents, tells the story of one such athlete, Cris Carter. Carter was an All-America junior receiver at Ohio State. As a senior he was expected to win the Heisman trophy and drafted in the first round of the NFL draft, which would pay him a lot of money. Carter’s career, however, ended abruptly the summer before his senior year because he was declared ineligible because he violated the NCAA rules by signing with an agent and accepting money.

Carter, who went on to have a stellar NFL career, was not selected until the fourth round and was paid accordingly. His troubles did not end there, as he was indicted by a federal grand jury, received a reduced sentence and spent some period in jail. The price Carter paid is similar to the fate of many college athletes who have had inappropriate contact with agents. Jeff Ruland, a current NBA assistant coach, Vince Workman former NFL running back and Derek McKey former NBA center are other notable athletes who lost their eligibility status and consequently millions of dollars.

Allegations continue to swirl around Alabama’s defensive end Marcel Dareus, for accepting a trip to a Miami party from an NFL agent. Former Florida center Maurkice Pouncey is accused of accepting money from an agent or a runner in December 2009 and the NCAA investigates colleges like North Carolina and Georgia for similar rule violations. While the NCAA investigates these and many other allegations, it raises the question, who is to blame? Many, including myself, believe the sports agents are the ones to largely to blame.

Pat Dye, Jr., sports agent based out of Atlanta, GA, and son of a former college football coach, Pat Dye, said “The root of the problem is the people that are making the offers and the instant gratification and temptation. And that’s obviously flowing from the agents. ” Craig Shemon on his radio talk show on July 27, 2010 said, “There will always be shady agents and football coaches willing to look the other way when extra benefits are handed out to a college athlete. The responsibility, however, is squarely with the athlete. They are not children. They know right from wrong.

They know they can take money from an agent after their final bowl game, not three weeks before. They know their actions will put their teammates and coaches in peril afterward. And sometimes they just don’t care. ” One thing is quiet clear, the NCAA rules regarding agents and amateurism has not deterred sports agents from making inappropriate contact with student-athletes. Human nature and the self-interest of sports agents will always seek out the income opportunities through the recruiting of high school and college athletes with great potential.

This same human nature and self-interest, coupled with possible hardship will continue to make athletes fall pray to unscrupulous agents. If hardship in college is the problem, may be it time that student-athletes be given a stipend from the millions made off these student-athletes’ sweat and tears. This may do very little to stop sports agents but it may save a few of our innocent, immature student-athletes. Work Cited Epstein, Adam. Sports law. Canada: Cengage Learning, 2002. Ruxin, Robert. An athlete’s Guide to Agents.

Jones and Bartlett Publishers, 2003. Shropshire, Kenneth L. , and Timothy Davis. The Business of Sports Agents. Pennsylvania: University of Pennsylvania Press, 2008. Boston College Compliance Office. PDF form 8/4/2010 <http://bceagles. cstv. com/compliance/bc-compliance-agents. html>. Carapucci, Kim. “Sports Agents Enticing NCAA Athletes: Who’s to Blame”? CBS 42 Local News on the web 2010. <http://www. cbs42. com/content/localnews/story/Sports-Agents-Enticing-NCAA-Athletes-Whos-to-Blame/0ylWrNrKn0qRuWybGk6b-g. cspx>. ESPN. Com.

NCAA delivers postseason football ban. June 11, 2010 http://sports. espn. go. com/los-angeles/ncf/news/story? id=5272615>. Fiffer, Steve. “His Players Broke Rules, Schembechler Testifies” New York Times on the Web <http://www. nytimes. com/1989/03/23/sports/his-players-broke-rules-schembechler-testifies. html> Phillips John. “Insight: Sports Agent Says Let’s Strengthen, Enforce the Rules” Press Register Commentary Sunday, August 01, 2010. <http://blog. al. com/press-register-commentary/2010/08/insight_sports_agent_says_lets. html> Shemon, Craig.

“Where the Sports Agent Problem Lies” Sportingnewsradio. com 2010. <http://sportingnewsradio. com/shows/where-the-sports-agent-problem-lies-15104/. > Spears, Marc. “Another growth spurt, Camby’s matured since UMass days. ” Boston Globe. 03/23/2009. <http://www. boston. com/sports/basketball/celtics/articles/2009/03/23/another_growth_spurt/? page=2> Zenor, John. “Saban compares unprincipled agents to a ‘pimp’ Agents, not national titles, primary topic at start of SEC media days. ” NBC Sports July 21, 2010 http://nbcsports. msnbc. com/id/38347909/ns/sports