Sports Agents: Their Value and Limits

Sports entertainment has existed for centuries, even before gladiators in the Roman Coliseum. The public passion for sports grew in the 20 th century. As sports individuals became recognized internationally, players and athletes realized the need to have a professional representative. The need for sports agents started in the 20th century and their value has increased in the 21 st century owing to the rise in global sports competitions and the high economic value of sports (Rossi & Tessari, 2017). In the past, professional athletes used to negotiate their contracts without seeking professional advice. Within a few decades, athletes' salaries and allowances have risen from thousands to millions of dollars. As sports individuals' salaries and allowances grew, the need for sports agents to manage their business and personal affairs rose. 

Factors that Contribute to the Formation of Sport Agencies 

Sports agents started becoming relevant figures in Europe in the 1960s following reforms in labor markets against "transfer and retain systems” by player unions. Agents emerged to help players satisfy their contract negotiation. As negotiation power in the sports industry increased, players and teams saw the need to seek professionals' assistance in negotiating better deals and salaries (Heitner, 2009). Since then, the role of agents in sports started growing as they explored better football market opportunities. The existing agents began opening and creating migratory channels to serve the request of clubs. Although sports agents existed earlier, they became fully recognized in European football in 1995 following the Bosman case's court decision. The case led to the liberalization of the football labor market and recognizing agents' role in the sports industry's success. 

Increases sports competition in various fields like football, basketball, athletics, and others also increase in sports agents in the 21 st century. Individual players used emerging teams to their benefit to negotiate for better salaries, or they join the opponent team. The pivotal role of agents in football was strengthened by reforms of the transfer market and regulatory contexts. According to Rossi & Tessari (2017), players' salaries in Italy, Spain, and England grew by 30% from 1996 to 2002. High salaries created a serious financial capital for players due to a rise in the transfer of players. Clubs were unwilling to lose influential players without transfer fee reimbursement. Additional revenue sources for athletes and sports individuals created a need for business and finance manager. The international mobility of players across Europe rose, and agents became a core element in negotiating contracts. In the 21 st century, agents have become an integral figure in football and athletics. 

The Origin and History of Sports Agents in North America 

Remarkable changes in sport's professionals contributed to the development of sports agents in the USA in the18 th and 19 th centuries. An increase in remuneration and the formation of sporting league brought a need to employ individuals to manage sports affairs like sponsorships, financing, and representing legal matters (Guttmann, 2004). The US government was unwilling to get fully involved in the sports industry. Individual promoters and organizers were allowed the freedom to negotiate their deals. In the late 18th century and early 19 th century, athletes represented themselves in negotiating contracts, which created an imbalance between teams and players. With time, players started consulting attorneys and other professionals before entering into a contract. The first modern sports agent was Cash & Carry, representing prominent athletes back in the 1920s and 1930s. "Cash & Carry" was a renowned professional who represented and managed every aspect of an athlete's life. In the 1960s, sports intermediation in athletics grew; however, the agents were not favorable in the sports community (Rossi & Tessari, 2017) . Sports agents in team sports had their way in the industry from the 1970s, where agents increased as the demand of individuals seeking professional and financial guidance rose significantly (Holt et al., 2006). Mark McCormack was the pioneer of modern agents who saw a potential commercial benefit in the sports industry, including golfers. The company utilized the image and sport skills to generate commercial value through endorsements, contracts, and advertisements campaigns. 

The vital role played by agents in the sports industry became fully recognized in the late 1990s. Leagues and governmental institutions legitimized the use of professionalized individuals in sports to act as intermediaries. The newly formed league increased competition and started appealing to athletes. Since athletes were concerned with fair-market competition, they sought help from an outside party to bargain the deal (Rossi & Tessari, 2017) . Consultants expanded their responsibilities and solidified the role of sports agents in the US. New services offered by the consultants became necessary for athletes, and as they took over the role of financial management, public relations, legal dispute resolutions, and others. Another contributing factor to the expansion of sports agents in the 21 st century is increased media interest in sports activities in media exposure. According to Shropshire and Davis (2008), sports agencies' visible role contributed to the booming of commercial sports endorsement in the US. In America, sports agency fees have risen by 125% from 1999 to 2005 (Karcher, 2007). 

Football Agents in Europe 

The rise of sports agents in Europe is recognized through three phases based on labor and transfer system reforms. The first phase was from the 18 th century up to 1950, characterized by scouting and intermediation on behalf of clubs. The second was from early 1960 to mid-1990 based on football players' representation and, lastly, from mid-1990 up-to-date, representing the professionalization of football agents (Rossi & Tessari, 2017 ). During the 19 th century to 1950, sports agents performed the role of counseling clubs to discover Sheffield was the first sports agent in Europe who represented players in 1876 after the formation of the Football Association (FA). FA began using agent professionals to make concessions like reimbursements of players' expenses taking part in FA matches. Agents became integral in overseen placements of advertisements in the newspaper to recruit players. The first generation of agents represented teams in domestic transfers and wages and did not deal with individual players (Rossi & Tessari, 2017) . Before moving to another team or club, players had to seek the approval of their team. After the First World War, football became more of a working-class and economic mining center in France, Italy, and Germany, creating a higher need for more agents to act as legal advisers. 

Sports agents started representing individuals from the 1950s until the 1990s following an increase in market transfers, transfer of managers, and club directors. Sports agents began using their unique and precious knowledge in transferring networks and players across Europe. Through the help of agents, individual players demanded a fair transfer market to top clubs like Chelsea, Juventus, Manchester United, Millan, Kazio, and Torino (Rossi & Tessari, 2017) . By the early 1990s, the value of the sports agency became evidenced by the huge presence of upcoming stakeholders in the industry. FIFA accepted the use of sports agents from 1994. However, payment malpractice during the transfer of players led to regulations. 

European Court gave full agency to players once their contract expired and guaranteed them freedom of movement within the European Union in 1993 (Dubey, 2000). The exponential growth of revenue in the football industry in the 21 st century resulted from high competition and deregulation in the broadcast market. Agents became valuable in exploiting players' bargaining power and overseeing transfer within leagues in the European Union. Over 5193 sports agencies were registered by 2009 to collaborate with managers, players, and directors to act as intermediaries, mediators, and brokers (Rossi & Tessari, 2017). Today, sports agents are essential in every field of sport, and their roles are broad. 

Role of Sports Agents 

The modern-day sports agent is more than a contract negotiator. The agents are expected to act as psychologists, social planners, counselors, and baby sitters for clients (Rosner, 2004). Sports agents play the role of negotiating and acting as intermediaries between sportspersons and the sports clubs or organizers of sports events seeking to hire or employ sportspeople. The agent negotiates the player's salary, incentives, guarantees, bonuses, and contract length. The sports agent acts as intermediaries by bringing together the interested party to find suitable job placement for the sportsperson (Heitner, 2009). The agent advises the league or individuals on potential clients and acts as negotiating terms and conditions for a contract. Due to the changing nature and involvement of players, the role of sports agents deals with every aspect of sports individuals, including training, eating, lifestyle and health conditions, and fitness. It is the responsibility of a sports agent to determine the value of services offered by the players they represent. Another crucial role of sports agents is to act as a public relations advisor. The agent solicits and arranges for product endorsements, speaking engagements, commercial advertisements, and crisis communication and management. The agent promotes the carer of their agents through positive public relations, media coverage, and organizing charity activities. The agent represents individual players in salary or arbitration grievances. They go ahead to arrange for players to be moved into the labor markets. 

In team sports, a sports agent oversees the transfer of sportspersons and facilitate a transaction between sports club organization and the sportsperson. Sports agent performs international activities per individual and team sports. Interprofessionalisation of professional sport has led to an increase in intermediaries' involvement, like sports agents in the recruitment process. Sports agents further act as financial managers for the sportsperson or club; they manage their businesses and advice on investment plans ( Roadvisesadvice004 ). It is the sports agent's responsibility to deal with matters of taxation and accounting. Today, many sports individuals employ sports agents who have a law background to advise them on their professionals' legal and ethical issues. Sportspersons, especially the athletes, have limited information since they focus on producing excellent results in the field and doing whatever is expected to reach peak performance (Evans, 2010). Due to limited information on external affairs, players and athletes require a sports agent to deal with such issues as allegations, fines, and suspensions regarding the use of performance-enhancing drugs. Professional leagues keep on changing their list of banned substances. It is the mandate of sports to be fully informed on banned substances added to the list to prevent any abuse that might disqualify the player (Heitner, 2009). A sports agent receives short temporary gain if their client takes a banned substance and gets a large contract if their client performs excellently. 

Agency law requires the agent to act with care on behalf of the client while expanding reasonable effort to issue material information (Shropshire et al., 2016). The agent needs to discuss the terms and conditions of the agreement with the sports individual before making promises to the company aspiring to acquire the rights of the client. It is unacceptable and illegal for the sports agent to use their client's position or property for their self-benefit without the client's consent. Sports agent Bill Henkel was charged with commercial bribery when he secured a memorabilia deal for Pro Bowl. He secures personal kickbacks worth $25 thousand that was hiring Tomlinson without his consent. When performing their duties, the agent is not expected to receive any commissions for using the client's status without their consent. 

Qualifications of a Sports Agent 

The field of sports agents has grown significantly in the last two decades requiring higher qualifications than before. The expanded role of a sports agent creates a need to have a good education level. Background education in law makes it possible to develop an eye to catch small and essential contract details that add value or interest to the client (Evans, 2010). Agent who has legal training as a transactional attorney is more valuable in sports, especially in assisting with sales and purchases of properties, formulating trust, investment oversight, and other needs satisfying high-income earners. Individuals pursuing a career in the sports industry must have a bachelor's degree in law and related education and training (Holt et al., 2009). A good education is essential in this field since individuals will meet several other educated sports agents, sponsors, media organizers, and others who contribute to the client's success. 

Business acumen is another essential qualification of a sports agent. Sports agents play an integral role in managing athletes’ businesses; thus, they require adequate business knowledge and skills. Apart from a law background, sports agencies require an additional degree in business management, marketing, and finance. Social intelligence is another crucial qualification for sports agents since they help manage interest, emotions, and perceptions when dealing with various stakeholders. Sports players and organizations prefer working with an agent who can easily form relationships and adopt negotiation strategies. Good negotiation skills are essential for a sports agent since it helps secure good contract deals for the player or team (Holt et al., 2009). Sports agents should demonstrate exemplary skills in interpersonal relations, persuasive writing, and communication. Another qualification required to become a sports agent is a passion for sports. 

Employing a non-attorney agent is challenging since they lack a legal license to present to the court in case of misconduct. A non-attorney agent creates a problem of inability to redress against negligence. Non-attorney agents cannot conduct a comprehensive investigation before signing a contract. Due to sparse standards of little set expectations for non-attorney agents, it is challenging to sue them for poor performance. Employing a qualified attorney as a sports agent is advantageous since attorneys have a strict professional conduct code (Holt et al., 2009). A professional athlete is likely to have great redress against practices. Sports individuals and teams are assured of protection in case of failure in the negotiation of contracts. 

How Necessary Is a Sports Agent? 

The relationship between an athlete and an agent is as important as that of a player and the club. Sports agents have become a useful tool for professional athletes since they provide a range of services beyond negotiating a contract, including money management, tax planning, and investment (Shropshire et al., 2016) . Money management is a vital determinant of the future of a sports individual and team. In 2003 of hiring a new agent, Sheffield decides to manage his finances and contracts. Sheffield en, baseball superstar Gary Sheffield fired his agent Scott Boras citing he was a "bad person." Instead ded up leaving millions of dollars on the table, and he failed to negotiate a no-trade clause for himself ( Evans, 2010) . The lack of a no-trade clause made it possible for Yankees to trade him without his consent. The cases of LeBron demonstrate the necessity of having a sports agent. LeBron James, a renowned athlete, made a similar mistake when he fired his agent and allowed his three friends to manage his finances. When his companies started fighting for sponsorship, he realized the need to hire an agent to manage legal, financial, and management matters ( Heitner, 2009 ). If the player fails to manage their finances and go broke, they will likely lose their professional career. An agent who knows in and out of a specific country's tax system plays a vital role in tax planning and management. Taking the case of Magic Johnson, his agent played superb work in tax planning, which led to continuous payment by Lakers, which benefited even his grandchildren. 

Another necessity of sports agents is resolving disputes, which are inevitable in the sports industry. Players are ever busy boosting their performance and rarely recognize the presence of conflict. In such a situation, the sports agent resolves disputes either by mediation or by the court to ensure their client's professionalism continues. Another necessity of a sports agent is to act as a personal counselor of the client. Sports individuals sometimes get involved in domestic violence and require someone to guide them accordingly. For instance, Warren Moon once got involved in domestic violence, but his agent Brad Sturgill gave him counseling that helped him deal with his abusive aggression. It is through the help of sports agents that sports individuals and clubs have secured successful contracts. For instance, Raghib Ismail has negotiated an 18.2 million contract by his agent Edward Abram, the Oakland-based agent and 50% part-owner of Morcom Sports Enterprises. 

The Unethical Side of Sports Agenting 

Ethics is crucial for the success of the sports industry. However, unethical cases have been rampant among sports teams and individuals that employ non-attorney agents who fail to follow the ethical code of conduct. There remains an unresolved dispute of whether non-attorney agents are bound to their profession's ethical requirement (Balsmam, 2016). Due to this, attorney-agents get disadvantaged compared to their non-attorney agents who perform similar duties but are not held by ethical rules. The huge amount of money made by sports individuals and clubs creates a loophole for agents to make huge amounts without the clients' consent. Some clients are not interested in achieving the best deals that lead to their successful performance; they get into agreements for a personal benefit ( Barnett, 2014) . According to Heitner (2009 ), agents usually make between two to five percent commission on every contract they win for an individual or club. 

The collective bargaining agreement presents an opportunity for the contradiction between the player and the agent. An individual player has the freedom to negotiate a contract for their good and the good of the group ( Balsam, 2016) . The team is bind by the salary and other contract conditions; therefore, a collective bargain might affect the quality of agreement leading to tension between individual player, agent, and other team members. For example, in an NFL's rookie pool, the agent might deceive the player to get them more money and be responsible for the successful negotiation. Sports agents should be held accountable for all unethical practices that arise during the negotiation process. The best way to hold agents responsible for their unethical practices is by developing an industry-wide code of ethics to govern the sports industry ( Barnett, 2014) . Clients are encouraged to opt-out of any contract that fails to negotiate a contract in favor of a new contract where the client is deemed to collect a hefty commission. 

Implications of Sports Agents 

Failure to develop effective regulatory measures to govern sports agent performance might lead to several issues. Dual-agency or conflict of interest is a significant problem experienced by sports individuals and clubs that use sports agents. In sports agents, conflict of interest mainly arises when a third party compromises another party with separate interests ( Rosner, 2004) . When an agent represents many clients playing the same positions or the same team, the agent might be biased in their negotiation decisions. Such a situation occurred back in 1996 when attorney-agent David Falk representing top basketball player Juwan Howard negotiated a contract with NBA’s Miami Heat. Falk managed to secure a contract for Howard, who was a superstar and neglected average player Rex Chapman (Evans, 2010) 

Another problem is the issue of payments of secret commission connected with the transfer of athletes or players from one team to another. A wrong agent can misguide, mislead, and even defraud athletes. Several athletes and players have been adversely affected and wasted their professionals due to dishonest agents. This issue mainly arises when one chose a non-attorney agent since they are not regulated by the attorney's ethical code of conduct. Richard Sorkin, a non-attorney agent representing over 50 NHL and BBA players in the 1970s, squandered over $1.2 million of his client’s money. Although he was arrested and sentenced to three years, he negatively impacted his clients' lives and that of their family ( Balsam, 2016) . 

Young footballers, especially from third-world countries, face high economic exploitation as they try to make their way into the international team. Lack of transparency during the negotiation process between the sports agents and the club or event organizers impacts the working relationship. Some sports agents take a contract for self-gain and fail to inform the client of the factual terms of the agreement. 

Agent Regulations 

With the rising case of manipulation by agents and mismanagement of the client's finances, various countries, including the United States and European countries, have developed legal laws to regulate sports agents' activities. National Football League Players' Association (NFLPA) became the first professional sports league to establish agent regulations in 1983 (Sudia & Remis, 2000). The law required various teams to negotiate contracts of a player with only certified agents. Also, agents are expected to take a test and fulfill other requirements before becoming an advisor to any player or team. The test contains questions with collective bargaining agreement on the salary and free agency system, and those who fail the test are suspended or decertified. Once an agent is certified as an NFLPA Contract Advisor, they need to follow specific rules and regulations that limit their operation to prevent unethical practice ( Wolohan, 2018) . First, the agent is expected to use a standard representation agreement or a similar form. Second, the agent is not expected to request payment until the player receives compensation per the contract terms. Third, there is a limited percentage of athlete compensation that the agent can collect. Fourth, an agent is not expected to offer anything of value to the athlete to lure them into accepting a specific contract. Fifth, a professional agent is not supposed to maintain a financial interest in professional sports teams. Every sports agent needs to comply with state and federal regulations. The commission also asserts that the agent should allow the player freedom to make their negotiations, including reducing working hours. 

Several states have come up with regulations that limit agents' performance when hiring and recruiting student-athletes and players to reduce the high cases of agent malpractices. California adopted the Athlete Agencies Act (Act) in 1989. The act requires rookie and veteran sports agents in all sports professionals to obtain a California State Labor Commissioner license before conducting any athlete solicitation (Evans, 2020). The labor nation can either accept or reject an agent's application based on information presented on education, training, character, and experience. Oklahoma State regulates sports agents through the Oklahoma Athlete Agent Act (Act), requires every athlete to register with the Oklahoma Secretary of State before contacting student-athlete. The approval of agent registration considers the applicant's education, training, and experience ( Edmonds, 2017) . Texas has established the Texas Regulation of Athlete Agents that govern athlete agents' eligibility to ensure they follow the legal requirements. The state of Florida has established rules and regulations to govern attorney-agent in the sports industry. The law requires the attorney to represent the client thoroughly and diligently following defined representation (Sudia & Remis, 2000). The rule prohibits attorney-agent from overcharging the client and applying unreasonable fees. Another requirement is for the attorney-state to ensure honest communication and maintain the confidentiality of information. Lastly, the attorney-agent must comply with rules if the client is under disability and should always comply with rules that regulate clients' solicitation. 

Student players and athletes are sometimes very trusting when negotiating their first contract with clients and may end up getting deceived, especially if they chose a non-attorney agent. Based on student-agent NFL requirements, the union requires every agent to carry professional liability insurance ( Wolohan, 2018) . All the requirements and limitations of an agent representing a student are stipulated under The National Collegiate Athletic Association's ("NCAA"). According to the guideline, a student-athlete can receive advice from an attorney on their professional contract, but the attorney does not have to represent the athlete in negotiation (National Collegiate Athletic Association, 2010) . NCAA prohibits an athlete who is a member from receiving any gifts from the agent. The regulation seeks to limit the "likelihood of an unscrupulous agent preying on a talented young and financially naive athlete" ( NG & Deubert, 2016). Registered agents serving students under NCAA are expected to disclose their education and occupational background and notify an eligible NCAA athlete or the coach. A registered agent who jeopardizes student-athlete eligibility during the signing of a contractor may lose his agent registration with NCAA (National Collegiate Athletic Association, 2010). 

Restrictions on Athlete Agent Fees 

NFLP has placed additional restrictions that govern an athlete and contract advisor. The commission requires to disclose fees; however, the agent fee might vary depending on agreed working hours. Based on section 4 of the NFLPA regulations, “the maximum fee which may be charged or collected by a Contract Advisor shall be three percent (3%) of the compensation". "The Contract Advisor and player may agree to any fee, which is less than the maximum fee set forth in (1) above” (Evans, 2020). The agent is required to request payment after the client has received compensation. Sports agents are prohibited from offering any monetary inducement to the player to win the opportunity to utilize their services. The agent is also prohibited from offering any monetary value or other valuable things to the client's family to induce service recommendations (Evans, 2020). The law also forbids the agent from holding either directly or indirectly a financial interest in any professional sports team that could lead to a conflict of interest. Lastly, agents are prohibited from accepting valuable things from NFL clubs or MLBPA clubs that might cause an actual conflict of interest ( Heitner et al., 2010) . Major League Baseball Players Association (MLBPA) has also restricted the fee that sports agents can charge the player. Although MLBPA does not specify the percentage, it asserts that a player's salary must be equal or below the minimum salary after the player pays the agent ( Heitner et al., 2010) . 

The Five European countries Bulgaria, France, Greece, Hungary, and Portugal, and four international federations, namely FIBA, FIFA, IAAF, and IRB, have various sports agents' regulations. The regulations deal with the registration of sports agents, licensing, and authorization to ensure private services are offered fairly. Before been given a job as a sports agent, one needs to receive a permit, which involves simple registration and a mandatory pass of the licensing exam ( Kea, 2009 ). In Europe, sports agents' regulations are established by public authorities and others by sports federations like FIFA and FIBA regulations, regulating sports agents' activities during players' transfer. IRB regulations deal with the practices of agents when acting on behalf of rugby players. 

In summary, sports agents play a vital role in the success of individuals and teams. However, the agents are limited by various laws and regulations to prevent them from using their position to benefit themselves at the client's expense. NFLP has imposed various restrictions on the performance, salary, and practice of sports agents to prevent them from engaging in corrupt practices. Through these limits, the chances of sports agents engaging in unethical practices are reduced. Although various statutes and regulations have been implemented to govern sports agents' performance, they continue to make headlines for illegal actions of acting for their self-interest. There is a need for student-athlete, professional, and sports industry to come together and enforce a sports agent's duties. All states should come up with effective uniform regulations to govern sports agents. 

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