Sports Agents: Roles, Negotiation, and Career Paths

Introduction to Sports Agents

The terms sports agent, player agent, sports representative, and contract advisor are commonly used interchangeably. Each term — whether identifying a lawyer or a non-lawyer — describes a delegate who performs essentially the same service. It is the duty of these professionals to represent, counsel, advise, and assist a professional athlete in the negotiation, execution, and enforcement of the player's contract. As of April 1993, two hundred seventy-three major league baseball players earned a salary of one million dollars or more, and agents typically receive four percent of the player's salary as their fee. This has caused a dramatic growth in the number of persons seeking to represent athletes.

There are countless definitions of athlete representatives, but the bottom line is this: to be a good sports lawyer, one must first be a good lawyer. A sports lawyer is frequently a business or corporate lawyer who adds the specialized ingredient of sports law to their area of expertise. Sports law is a remarkable combination of many legal specialties. Contract negotiation is one particularly prominent and profitable subset. Some sports lawyers specialize in negotiating contracts on behalf of a player, while others may represent a team in player contract negotiations. The services provided by law firms primarily involved in contract negotiation vary greatly in range — from the singular act of negotiating a contract to a full-range package involving negotiating, legal counseling, securing endorsements, financial planning, career planning, marketing the athlete, and resolving disputes over employment contracts.

The key to being a highly regarded player agent is to identify the client's best interests and to work diligently to achieve those objectives. Numerous factors determine an agent's distinction: integrity, background, experience, expertise, and preparation. Although it is not a requirement for an agent to also be an attorney, the athlete is generally best served by an attorney-agent, due to the added security of the attorney's code of professional responsibility.

Becoming a Respected Player Agent

The professional athlete is also better served by an agent who maintains a low public profile, rather than by an agent with a reputation for confrontational, public negotiation or for causing clients to miss preseason training. This is not to diminish the substantial value of favorable publicity — there are some successful confrontational agents. There are, however, hazards to negotiating in the media rather than directly with the team. For example, a marginal player in danger of losing a roster spot might be placed in particular jeopardy by a confrontational agent. Additionally, a team faced with a choice among players of comparable ability competing for limited slots may favor those represented by less confrontational agents. It is easy for management to keep players whose agents maintain a low profile over those whose agents court conflict.

Registration with or certification by the various players' unions is a prerequisite to entering the field of athlete representation. Certification may not be granted if the agent cannot reasonably be expected to perform the responsibilities of representation. The unions require that all agents attend annual seminars covering current updates relevant to their duties. A key benefit of certification is access to valuable salary information for union members, as well as scouting information on college seniors.

Registration and Certification Requirements

An athlete's representative may also be required to register with individual states, pay registration fees, and post a bond. This can be costly, as posting bonds of up to $100,000 in various states requires substantial resources. A representative should carefully weigh the number of states in which to register, balancing the reality that registering in too few states limits where they can work, while registering in too many may place an undue financial burden on the representative.

There is no single proven method to successfully negotiate a contract, because each negotiation varies in its particulars and context. However, three vital characteristics are shared by successful negotiators. First, the representative must be thoroughly knowledgeable about the negotiation at hand. Second, the representative must determine the client's needs and objectives. Third, the representative must select an effective strategy and negotiate industriously to achieve the client's goals.

Contract Negotiations

It is often easier to negotiate a sports contract than most other contracts because there is an abundance of data available to the negotiator. This information is accessible from a number of sources, including the union, other players and agents, the media, and the team itself. Such information includes salary data compared by tenure and position, as well as players' statistics. The agent must assimilate and integrate information from these sources to understand the sport and its organizational structure. Familiarity with the basics of the particular sport is also essential. The agent must know the teams, the players, the injury histories of the players, the minor league prospects, the attitude of the drafting team's fan base regarding the signing of top-tier players, the economic state of the teams, and each team's specific needs. Moreover, the agent requires knowledge of league and NCAA governing documents, regulations, and operating manuals.

Despite the quantity of information available, the most important data does not come from the written page. The representative must become personally familiar with the athlete's needs, life objectives, and financial habits — whether the athlete tends toward economic discipline or extravagance. The representative's first priority is the athlete's economic needs, as this is commonly the client's most urgent concern. For example, if the client needs money promptly, the agent may negotiate a large signing bonus or a front-loaded contract. If the player is injury-prone or older, there is incentive for the representative to seek a guaranteed or no-cut, long-term contract with injury insurance. The agent should be aware that guaranteed contracts are extremely rare in the NFL but somewhat common in the NBA. The agent must also consider the use of incentive clauses, particularly in light of the player's physical and psychological ability to meet those goals. Finally, the agent must carefully consider the effective marketing of the athlete, particularly in the area of endorsements.

Beyond raw data, the agent must understand the art of negotiation in order to be an effective representative. An agent should know how to support a player's salary objective with statistical and other relevant data, how to "package" a proposed contract, and how to identify not only the needs and objectives of the player, but also the tax implications of a successful negotiation. A keen agent will recognize the impact of those needs and objectives on management, on the tax strategy of the owners, and on other players. The hallmark of a successful agent is designing contracts that satisfy the needs of both parties. That kind of business vision can quickly build substantial respect for the agent among both management and players.

One of the first commandments of being a sports agent is: communicate with your client. A sports agent must work to build a reputation for credibility and integrity — a reputation that may arise through friendship, personal contacts, or recommendations from players, management, or coaches. A representative's reputation may also develop through associations with reliable people in the sports field. A sports lawyer must learn how to keep clients content and informed. Communication is therefore of the utmost importance, as is treating each player-client as a respected and intelligent individual. While some clients may be sophisticated and business-savvy, others may be poorly educated and inexperienced; all clients, however, deserve respectful and thorough treatment. Informing clients about the particulars of their contracts is essential, as some players may not fully understand standard contractual provisions. Without appropriate communication, the representative-client relationship is at risk, and the client bears the adverse consequences. An ever-growing number of states are regulating agents in contract negotiation, raising questions about whether such statutes are constitutional and whether proposed federal laws will preempt the field.

A frequently asked question is: how does a lawyer become involved in sports law and athlete representation? A variety of firm or individual contacts may offer entry points into the field. Connections arise from numerous sources, including representing parents of players, representing unions, and representing team physicians. Lawyers may also represent persons holding an equity interest in team ownership. There are innumerable ways to become involved — either primarily or incidentally — in sports law matters, as sports law is a broad legal discipline. Lawyers and agents seeking to enter the field must recognize that they face intense and sometimes unscrupulous competition. Beginning sports representatives will likely need to supplement their income with other legal work until they contract with several successful clients.

A common method of obtaining clients is through personal contacts, friends, and other athletes who can facilitate introductions to professional athletes. The more sports figures one knows, meets, and represents, the greater the chance of engaging new clients. Knowing college coaches is an obviously beneficial avenue. Success and favorable publicity also broaden opportunities for sports lawyers.