Before the NCAA ruled McAdoo permanently ineligible to perform in intercollegiate athletics, UNC actually petitioned the NCAA to reinstate McAdoo’s eligibility to play college ball.  But according to McAdoo, UNC made some mistakes in its petition, specifically with regards to reporting that he violated NCAA Bylaw 10.1(b) by representing another’s work as his own.  NCAA Bylaw 10.1(b) forbids knowing involvement in arranging for fraudulent academic credit or false transcripts for a prospective or an enrolled student athlete.  The claim was that McAdoo’s university-assigned tutor provided too much assistance with three classes, which was relayed to the NCAA prior to any findings by the UNC Honor Court.  UNC’s Honor Court later found McAdoo not guilty of receiving impermissible assistance in one class and did not find enough evidence to charge McAdoo with regards to another one of the three classes.  His tutor had also graduated from UNC.  Thus, technically, her assistance was an improper benefit provided to McAdoo (worth $11, as stated above).  McAdoo disputes that he ever knowingly was involved in arranging for fraudulent academic credit.

The other $99 of improper benefits relates to a financial planner named Todd Stewart, who paid for a hotel room for McAdoo, Marvin Austin, and Greg Little on an April 2010 trip to Washington D.C.  According to McAdoo’s Complaint, he was told by Marvin Austin that Austin was covering the expenses, not Stewart.  He believed that Austin paid the cover charge to the nightclub.  This was also possibly paid for by Stewart.

UNC and McAdoo informed the NCAA that they would be appealing the NCAA’s November 12, 2010 decision to declare McAdoo permanently ineligible.  However, McAdoo did not have independent counsel to represent him at the appeals hearing, and according to his Complaint, no one at UNC ever told McAdoo that UNC’s counsel could not represent his individual interest or that he should consider getting separate counsel.

McAdoo’s Complaint includes a whopping 16 claims for relief.  While McAdoo would like to be compensated by the Defendants based on their actions, he is probably more concerned with the injunctive relief sought in his filed Complaint.  McAdoo wants the Court to issue a mandatory injunction or writ of mandamus to compel UNC’s Chancellor to declare McAdoo eligible and reinstate him as a member of the UNC football team in addition to an injunction against the NCAA to keep it from declaring McAdoo ineligible.

UNC’s first 2011 regular season game is September 3, 2011 at home against James Madison.  As of right now, the NCAA’s Committee on Infractions will not meet until October 28, 2011 to discuss the allegations contained in McAdoo’s Notice of Allegations.  By that time, UNC football will have played 8 games, with its 9th game occurring one day later at home against Wake Forest.  In order for McAdoo to prevail on his request for a preliminary injunction, he will have to prove that he will suffer irreparable harm by losing out on organized team practices and the playing of those 8 games (and potentially more games) in 2011.  He should use Weslye Saunders as an example of the type of harm that a player may suffer from missing a year of college football.

For more on this story, Andy Staples of Sports Illustrated provides strong commentary.

McAdoo Verified Complaint Final

Michael McAdoo Sues UNC, NCAA To Restore Eligibility from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The Athlete Agent Reform Act of 2011

Texas’ new law could potentially lock a sports agent up in prison for 10 years for violating its athlete agent law; in Tennessee, the new law limits maximum jail time to 6 years.  Meanwhile, no one, including those who are involved in crafting and enforcing the new laws, can explain why individual state athlete agent laws only penalize one party in an illegal transaction (the exchange of benefits from sports agent to student-athlete).  The sports agent is the provider and the student-athlete is the recipient.  Now we have recruiters as the providers and universities as the recipients, as well.  When a drug dealer sells cocaine to a drug user, both parties are guilty of involvement in an illegal transaction.  Tell that to your state legislators.

The new Tennessee law requires all sports agents recruiting in the state to register with the Tennessee Secretary of State.  Failure to even register can result in an agent spending 6 years in prison, in addition to paying a $25,000 fine.  The law also changes the definition of “sports agent” to include runners, managers, marketing representatives, financial advisors, and others working on behalf of an agent.  Further, Tennessee’s law takes into account the Cam Newton Loophole and states that “Athlete agent” does not include a parent or legal guardian, unless the parent or legal guardian of the student athlete accepts a form of a financial benefit or gift on behalf of the student athlete.  If you are going to have an athlete agent law on the books, which I am not totally sold on, at least have it reflect current issues.  In this regard, Tennessee does a good job of including runners, financial advisors, and even parents who are accepting benefits under the scope of regulation.

Nestled into the new law is also a section that I will title the Will Lyles provision.  It provides that any person who knowingly influences, or attempts to influence, any student-athlete to accept an athletic scholarship that is offered by a higher education institution from which such person receives any compensation or any other thing of value shall provide a written disclosure of such person’s relationship with the higher education institution to the student-athlete concurrently with initially making such influence or attempt to influence.  That person must also provide written disclosure of the relationship to the student-athlete’s parent, secretary of state, and athletic director, president and general counsel of the higher education institution within 48 hours of disclosing it to the student-athlete.  Failure to provide the written disclosure is also punishable by up to $25,000 and/or confinement for up to 6-years, but no less than 1-year.  For those of you not familiar with Will Lyles, he is the scouting service owner who says that University of Oregon coach Chip Kelly approved a $25,000 fee to Lyles in exchange for recruiting assistance.  Charles Robinson and Dan Wetzel did a great job of describing Lyles’ relationship with Oregon in their recent Yahoo! Sports article.

The new law can be found in the Tennessee Code Annotated, Section 49-7-2122.  I have embedded the signed legislation at the bottom of this post.

Tennessee Athlete Agent Reform Act of 2011

New Tennessee Athlete Agent Law Accounts For Cecil Newton, Will Lyles, Runners, Etc. from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The hearing was a part of California State Senator Kevin de León’s effort to get a new bill passed (it has already passed through the Senate), which he hopes will improve the enforcement of the athlete agent laws created initially by the Miller-Ayala Athlete Agents Act.  Specifically, the new law will force agents who violate its provisions to relinquish any money received or owed if connected to the violation.  Like many athlete agent laws created across the United States, California’s law has never actually been used to charge an agent since its creation in 1996.  A new law may have stricter penalties, but without proper enforcement, who really cares?

Gary Klein of the Los Angeles Times recorded some good quotes from former agent Josh Luchs.

Luchs, who in a Sports Illustrated cover story detailed how he paid players early in his career, compared NCAA rules to Prohibition — “As long as you have 1920s Prohibition, you’re going to have bootleggers,” he said — and told De Leon that financial advisors, marketing agents and their representatives, or “runners,” must also be held accountable.

“Everybody is a potential runner — and that includes coaches and family members and players on the team,” Luchs said.

But the best line of the event must have come from LA City Attorney Trutanich when he stated, “If you’re a sports agent, understand the cavalry has mounted.”  I am sure that many of you will believe it when you see it.  The more accurate statement was probably made by David Roberts – “Until there is a situation where an agent is the subject of a major civil award or criminal conviction, it’s not going to stop.”"

California Hearing Considers Effectiveness Of Athlete Agent Law from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

It will never happen.  The NCAA has too much to lose from sports agents having that type of access and control over student-athletes, something that the NCAA would be too scared of forfeiting.  The NCAA benefits from having a platform distinct from professional sports and is most successful if its student-athletes stay in school for four years.  Anything that jeopardizes NCAA control over student-athletes, its maintaining the guise of amateurism, and takes away power from coaches and member institutions (colleges), is something that the NCAA finds worthwhile to fight (see: no-agent rule).  Do not for a second think that the NCAA’s rules and regulations are in place to benefit the student-athletes; they exist to shield the NCAA and its member institutions.  That includes all rules and regulations concerning sports agents.

But let’s assume a system where the NCAA did not control policy regarding sports agents.  From a normative standpoint, is there anything inherently wrong about allowing sports agents to provide any sort of benefit to student-athletes?

How does the student-athlete suffer? Another common topic of conversation at law schools across the country is the issue of paying student athletes.  Almost everyone can agree that student-athletes deserve to be compensated for the value they provide to their colleges, but no one has the master plan to make it work.  How will various colleges afford it?  How will the money be spread across different sports at different schools?  How will we equitably adjust compensation for players who perform on the same team at the same school?  In a system that allows sports agents to compensate players, the players will earn money based on their worth.  Agents will not just throw money at every single player, and if they do, good for the players!  Those who deserve to be compensated will get their fair value.  How exactly does the student-athlete suffer in this situation?  Just as in the current landscape, the athlete will not be required to ultimately sign with any agent who provides benefits.

How does the sports agent suffer? In the current system, the agents who do not provide benefits to student-athletes are at a great disadvantage.  Those individuals abide by rules, regulations, and laws, and end up hurting their practices as those who ignore sports agent rules and laws benefit by effectively competing against a diminished pool of agents (those who also cheat).  Many ethical agents would have no qualms with paying student-athletes if the rules, regulations, and laws allowed for it.  These same agents end up fronting the costs of training the clients that do sign with them, which turns out to be around $20,000 a client, if they are able to beat out the agents who are throwing student-athletes money under the table prior to signing the players.  Generally, I do not think having the money to spend is a problem for agents.  There are two classes of agents who suffer under such a proposed system: 1) the ones who are currently cheating, because they lose their competitive advantage when all agents (including the ethical ones who actually adhere to the laws) are able to compensate student-athletes based on their perceived value, and 2) the agents who do not have the funding necessary to pay student-athletes their “going rates.”

Picture this system in another industry.  What if a small website designer wants to break into the niche of designing websites for professional athletes.  In order to become known and get referrals, that designer offers a professional athlete $10,000 to build his website.  Instead of the athlete paying for a website, the designer offers the athlete money to design it.  Maybe it is a stupid decision, but who are we to judge?  Journalists may write about this “idiotic” website designer, but no regulatory body is going to stop the transaction.  If sports agents are permitted to give benefits to student-athletes, some sports agents will give players much more than they are perceived to be worth, and some sports agents will end up losing money on those investments, but student-athletes will benefit and for the majority of investments made, those sports agents will benefit as well (or else they will financially force themselves out of the business).

Jeffrey Kessler is the co-chairman of the Sports Litigation Practice Group at Dewey & LeBoeuf and is class counsel for the plaintiffs in Brady v. NFL.  Recently, at the IMG World Congress of Sports, Kessler stated that he is “a big believer in capitalism and the free-market,” and said that he has “no doubt that can produce a pro-competitive, efficient outcome.”  Kessler made that statement in regards to the NFL, but it can also be used in this discussion regarding the regulation of sports agents.  I have no doubt that in a free-market where agents were given permission to give benefits to student-athletes, the result would be a pro-competitive, efficient outcome where, for the most part, agents provide benefits to student-athletes based on their future perceived value and student-athletes get compensated for their efforts while in school.  What is the difference between giving a student-athlete $20,000 in his senior year or giving him the same thing by paying for his training, housing, and other living expenses a few days after his team’s Bowl game?

I expect a fair amount of criticism based on this post, and I certainly welcome it.  While rules, regulations, and laws that restrict sports agent actions exist, it is important for agents to follow them; however, there is no reason that we cannot engage in a healthy debate regarding the justification of those laws.

Repeal Sports Agent Laws And Pay Student-Athletes from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

What: KU Sports & Entertainment Law Symposium

When: Friday, April 15, 2011

Where: Green Hall Room 203

Topics

• Hey, who Tweeted? It wasn’t me!

Social media provides a great forum in which to express oneself, but what free speech rights do collegiate student athletics have within it? May a member institution legally limit student-athlete access to social media? How should athletic departments deal with “ghost tweets” – fake social media accounts and messages attributed to student-athletes, coaches and staff that could make headlines?

• Right of Publicity and Former Student-Athletes

The Ed O’Bannon Case – When do the grant-in-aid rights signed away in college end? Is a former athlete’s likeness forever the property of the NCAA and their member institutions? How will the right of publicity landscape change in the future for student-athletes?

• Death of the NCAA: Could the Super Conference Change the Game?

Could a “Super Conference” system redefine intercollegiate amateurism? What would be the ramifications for student-athletes at institutions that opt out of the NCAA? What would be the ramifications for the NCAA?

• Who Represents the Student-Athlete?

If the grant-in-aid (or scholarship) is a contractual relationship with a NCAA member institution, what power does the student athlete have to negotiate the terms? Who may represent the student athlete without risking NCAA eligibility? Should students fight to be considered employees and unionize? What role should agents play with collegiate athletes? How may the NCAA change such role in the future? How do pro sports league labor negotiations affect the current college student-athletes wishing to enter the pro sports field?

• Big Headache: Ethical Issues Associated with College Football Concussions and Mass Tort Litigation

As research demonstrates the long-term negative effects of damaged caused by repeated head injuries sustained in football, what liability, if any, does the NCAA and member institutions have?  What information and education is being provided to student-athletes by the NCAA, member institutions, medical staff, etc. regarding concussions and the associated risks?  What rights do former student-athletes have to recover for their injuries?

If you have any questions, please email Jade Freeman at Jadefeeman@ku.edu or Libby Harmon at Libby912@ku.edu.

Kansas Sports & Entertainment Law Symposium from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Senator Jeremy Hutchinson presented The Athlete Agent Reform Act of 2011 on the Senate floor.  While there was no debate as to the bill’s merits, Hutchinson said the following: “It appears that when sports agents unlawfully give money to student athletes the student athlete gets punished, the university gets punished, the fans … across the country get punished, yet the agent who actually violated the law gets off with very little, a misdemeanor.”  Arkansas seems committed to change that, at least within its own borders.  As I have stated numerous times, though, the key element is enforcing the Act once it becomes law.

Athlete Agent Reform Act Of 2011 Almost Arkansas Law from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

But as is the case with many legislators in other states and at the federal level, Oregon has its members of Congress who are proposing changes to athlete agent laws and their enforcement.  Oregon Senate President Peter Courtney wants Oregon to send a message.  His aim is to strengthen the existing Oregon UAAA statute by,

• Broadening the definition of sports agent to include contract advisors, financial planners, marketing representatives, runners or any staff member who is employed or associated with a firm who represents any individual in the marketing of his or her athletic ability or reputation;
• Mandating that, in addition to registering with the State of Oregon, that sports agents must register (at no cost) with compliance office or official at each respective institution where the agent wishes to contact student athletes;
• Including elementary schools and high schools among those covered in the athlete agent law;
• And making it illegal for sports agents to provide benefits indirectly to student-athletes through friends or family members.

And best of all, Courtney recognizes that if the new initiative were to pass, it would mean absolutely nothing without proper enforcement.  Let’s see what kind of support Courtney has when he proposes the new legislation, and if he can pull through with his plans for increased enforcement.

Oregon Investigating An Agent And Possibly Changing Its Athlete Agent Law from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The first thing that I think of when reading it is: Who is the NCAA trying to protect? It is obviously aiming to create a situation where the student-athlete reveals that he had assistance from an advisor who may have been overstepping his bounds in adhering to the NCAA’s no-agent rule.  The distribution of the questionnaire only further complicates matters for advisors.  They must contemplate whether it is in their best interests to go along with the NCAA regulation and abandon their advisees at a critical time or risk jeopardizing advisees’ student-athlete eligibility, but at least promise to competently represent the advisee (even if it also means ignoring the no-agent rule).

In Banks v. NCAA, 977 F. 2d 1081 (7th Cir.), cert. denied, 508 U.S. 908 (1992), the no-agent rule was challenged under the Sherman Antitrust Act.  The claim was that the no-agent law had an anticompetitive effect.  The claim failed, and it was deemed at the no-agent rule was in furtherance of the idea of amateurism.  There was a fear that the focus of college football (the sport discussed in the case) would shift from educating the student-athlete to creating a ‘minor league’ farm system out of college football that would operate solely to improve players’ skills for professional football in the NFL.  Judges should start watching college football, and all college sports for that matter, more often.  Their fear has been true for quite a while now, and the no-agent rule had no role in delaying that reality.

This remains to be my favorite line from the Oliver v. NCAA case:

For a student-athlete to be permitted to have an attorney and then to tell that student athlete that his attorney cannot be present during the discussion of an offer from a professional organization, is akin to a patient hiring a doctor but the doctor is told by the hospital board and the insurance company that he (the doctor) cannot be present when the patient meets with a surgeon because the conference may improve his patients decision-making power.

No Qualms With NCAA Baseball Questionnaire? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Representative Cliff Stearns, a Republican from Florida, spoke first, saying that SPARTA was responsible and necessary.  There were few, if any consequences to dissuade agents from acting unscrupulously.  Stearns recognized that many states had laws, that they were inconsistent, and that the Uniform Athlete Agents Act was created to unify them.  The problem was that there was no guarantee that all states would adopt it (which they have not yet, and it is now 2010).  He saw SPARTA to be a bill that would give a little bit more power to the states.

Representative Bart Gordon spoke next.  He was most concerned about agents influencing players to leave school early.  He also believed that SPARTA solved the problems of “patchwork state laws” and would be most effective in states with no agent laws on the books.  He made a point to say, “This bill does not set up a national sports police.”

Representative James Sensenbrenner of Wisconsin seemed to take a slightly different stance on SPARTA.  He sounded like an advocate of amateurism who thought that SPARTA would act as a way to return pure athletic accomplishment and route the economic side of college sports.  Quite a noble aim, but he needed to look well beyond agents to change the landscape of college sports, which has a huge monetary component.  He believed that the Uniform Athlete Agents Act is not enough and that a federal solution was necessary.

Representative Sheila Jackson Lee of Texas spoke from a personal perspective, since she had a son who was athletically talented.  She thought that SPARTA was important because it provides an even playing field for student athletes.  She stated, “The unscrupulous will be charged.”  She complemented the un-named competent sports agents she knew, but was sure to point out that we are not all on that level.

Representative Tom Osborne of Nebraska spoke about how 17 states had no athlete agent laws at all and that only 20 states were on board with the UAAA.  He said that a lot of people call themselves agents, but don’t have a client – Osborne said these people must be pretty desperate.  He said that these agents will offer the student athletes the three Cs – Cars, Clothes, and Cash.  Sometimes even the D – Drugs.  Worst of all, these agents offer kids false promises of being drafted high.  Osborne was also worried with pre-dating and post-dating of contracts and runners.

Representative Chris Cannon of Utah believed that SPARTA would help serve as a deterrent to unscrupulous behavior.  He wanted to separate these restrictions, which would only affect athlete agents, from athletes’ rights to obtain legal counsel.

After watching the clip now, in 2010, the real question is – while SPARTA was endorsed by practically every sports organization (as pointed out by Bart Gordon), has SPARTA really been effective in closing the holes that many states have left open?  Has this “federal remedy” really been all that productive?  The goals are noble and the regulations seem to be spot on.  But what about the enforcement?  Maybe the Federal Trade Commission is the wrong body to regulate our profession.  SPARTA does also allow state Attorneys General to enforce its regulations.

I have another question.  If a federal solution was so necessary, why not license agents on a federal level, and scrap the whole antiquated state registration system?  Forget about the UAAA, make SPARTA more expansive, and charge agents one fee, at one time each year, to be licensed federally under a truly uniform application and uniform body of law.

And one more question to throw out there – Why didn’t SPARTA include a right for the athletes themselves to enforce the duties of sports agents?

Maybe someone with political clout will read this and my paper linked at the top of this article.  But probably not.  If my ideas don’t make sense, I’d love to hear how the current system somehow is efficient and a better option.

Going Back To SPARTA Talk In 2003 from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

March and April are two of the busiest and most exciting months for sports fans.  Between the NCAA Men’s and Women’s basketball tournaments, the NFL draft, and Major League Baseball getting underway, there is always something to watch on TV.  These months also bring NCAA hockey playoffs and, inevitably, the conclusion of seasons for those that do not make it further.  With the end of the NCAA hockey season comes signing of players to professional contracts.  This is a pivotal moment in many players’ careers because, much like a football player declaring himself eligible for the draft, once a hockey player makes the decision to forgo collegiate eligibility, there is no turning back.

One of the most discussed players in the coming days and weeks will certainly be Jordan Schroeder from the University of Minnesota.  Schroeder was drafted #22 overall in the 2009 draft and fans of the Vancouver Canucks know him as a future franchise forward.  According to recent reports, Schroeder will inform both the University of Minnesota and Vancouver of his decision by the end of this week.  While Schroeder had mild success at the collegiate level, he admits that it he was disappointed with his production.  After a successful two-year career with the U.S. National Team Development Program (USNTDP) and an equally successful three-time campaign representing the U.S. at the IIHF World Junior Hockey Championships in 2008, 2009, and 2010, Schroeder will almost certainly have success at the NHL level.

If he decides to sign an NHL contract, Schroeder will definitely not be the only NCAA Division I hockey player to make the early jump to the professional ranks in the coming weeks.  Several players have already decided to turn pro and are already playing at minor league levels, and for some, the NHL level.  For example, Casey Wellman, a sophomore at the University of Massachusetts, signed with the Minnesota Wild earlier this week and should see playing time by sometime this weekend.  Wellman followed the path of the starter for the Los Angeles Kings and Olympic backup, Jonathan Quick, who left UMass as a sophomore in 2007.  Soon to follow Wellman to the pros is James Marcou, a junior and also from UMass, whom is reported to be signing a professional contract in the coming weeks.

With turning pro, there are several factors for players to weigh.  Under NCAA Article 12.1.2, student-athletes are prohibited from being paid for playing their respective sport.  This means that a once a player turns pro and starts receiving compensation for playing time, there is no turning back to a collegiate career, even if their pro career is unsuccessful.  While there is a certain allure to being paid to play, players must also keep in mind the best interests of their future development.  All of this information is certainly a lot to consider for a player that is generally around 20 years-old.

On Monday, March 15, the NCAA did its best to assist student-athletes with the decision process by issuing an informational memo to “Men’s Ice Hockey Student-Athletes with Remaining Eligibility.”  Almost every player in the position to turn pro will have an advisor during this process, which is permitted by NCAA rules.  The March 15 memo informs players that an advisor may not “contact teams on [their] behalf to arrange private workouts or tryouts,” but may provide other valuable advice during the process.

An NCAA hockey player’s decision to turn pro is unique in that unlike with the NFL, where players must wait several months between deciding to turn pro and actually being able to play, hockey players that make the same decision, can play almost immediately for a professional team.  For some players, this means going right to the NHL, for others this means starting at other minor league levels, such as the AHL or ECHL.  The professional level at which they play will be a combination of their skills, their player contract, and certain NHL CBA stipulations.

Regardless of whether Schroeder turns pro, this is an exciting time for players that want to see their careers taken to the next level.  What other players do you think will leave early for the pros after their hockey season ends?

Will Jordan Schroeder Turn Pro? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules