AP IMPACT: Laws governing sports agents contacts with student athletes are rarely enforced

By Alan Scher Zagier, AP
Tuesday, August 17, 2010

AP IMPACT: Laws on sports agents rarely enforced

When sports agent Jason Paul Wood met a pair of Miami baseball players in 2006 to talk about turning pro, his failure to notify the university and register with the state of Florida cost him a $2,500 fine.

Like 41 other states and the federal government, Florida has laws intended to keep amateur college athletes from losing their eligibility — and their schools from getting in trouble with the NCAA — because of dealings with an agent.

At a time when concern about improper contact between athletes and agents is spiking, however, cases such as Wood’s are an exception, not the rule.

Legislatures have passed a flurry of laws in recent years designed to make states part of the effort to stop unscrupulous agents — along with the NCAA and, to a lesser extent, pro player unions. The idea is to ensure fair play and shield amateurs until they are done with school.

Yet an Associated Press review has found that more than half of the 42 states with sports agent laws have yet to revoke or suspend a single license, or invoke penalties of any sort. Likewise for the Federal Trade Commission, which in 2004 was given oversight authority by Congress.

“The actions of sports agents can do enormous damage to schools, to student-athletes and to the integrity of college athletics,” said Rep. Bart Gordon, D-Tenn., who sponsored the federal law six years ago and now says it may be time to toughen sanctions against unethical agents. “Unfortunately, the sports agent involved has often walked away with no punishment.”

The unions set rules for athlete agents, but those focus more on the relationship between agents and current pros rather than prospective clients still in school.

NCAA rules, meanwhile, do allow agents to meet with college athletes. However, they forbid those students from entering into contracts — including oral deals — with agents or accepting meals, gifts, transportation and other incentives as a hook to sign contracts later. The problem is that NCAA regulations apply to athletes and schools, not the agents themselves.

So when Heisman Trophy winner Reggie Bush was found to have received improper benefits at Southern California, the perennial football power was the one punished most — losing scholarships and getting banned from bowl games for two years, among other things.

Now the football programs at Florida and Alabama — the last two national champions — are under investigation for alleged improper contact. So is North Carolina, among others.

A decade ago, when at least 28 states had varied agent oversight laws, the NCAA lobbied state lawmakers to embrace standardized rules for sports agents.

The result was the Uniform Athletes Agent Act, which is on the books in 39 states. The UAAA is also under consideration in California, which along with Michigan and Ohio has its own laws to deal with agent oversight.

In addition to mandatory registration, the law requires agents to notify schools immediately when they sign college athletes. The students are given 14 days to change their mind and cancel contracts. And schools have the legal right to sue agents who violate the law — though that option is rarely exercised. Agents who fail to comply can be punished with civil or criminal penalties.

Here’s the catch: The laws are rarely enforced.

The AP requested statistics on the number of registered agents, license revocations and suspensions and other penalties from each state. (Alaska, Colorado, Maine, Massachusetts, Montana, New Jersey, Vermont and Virginia lack such laws.)

Twenty-four states reported taking no disciplinary or criminal action against sports agents, and were unable to determine if state or local prosecutors had pursued such cases. Others described the laws as being enforced a few times, or rarely — an indication of what a low priority they are.

In Colorado, lawmakers in April rescinded a law passed in 2008 after just four agents registered to do business. Georgia has disbanded its Athlete Agent Regulatory Commission, transferring its duties to the secretary of state’s office. Delaware plans to eliminate its agent oversight board, which has been inactive since 2002.

Pennsylvania has levied just four fines against sports agents since 2003, none greater than $1,000, and the head of the State Athletic Commission acknowledges that the law is not much of a deterrent.

“We try to do the best we can,” said Greg Sirb, the commission’s executive director. Agents caught in Pennsylvania might simply move to a neighboring state to sign the athlete, taking a chance that they won’t get caught in a different jurisdiction.

In North Carolina, where the NCAA is probing possible improper contacts by agents with defensive tackle Marvin Austin and receiver Greg Little, the secretary of state’s office was forced to tap state workers who usually investigate securities fraud to look into possible violation of its agent laws.

The 2003 state law “came with no funding, so we have no dedicated resources,” spokeswoman Liz Proctor said.

The number of registered agents ranged from one in North Dakota to 400 in California, but state figures were so sketchy that a complete national picture could not be put together. The four top pro U.S. sports leagues — the NFL, Major League Baseball, NBA and NHL — have about 1,600 registered agents in all.

Under the laws, agents are typically required to register where they live, as well as where they do business. Many agents know they can ignore the registration requirements, said Kenneth Shropshire, a University of Pennsylvania sports law attorney and former agent.

“If you’ve got bank robbers and rapists, white-collar crime — how many agent issues should be raised to the top of some prosecutor’s desk?” said Shropshire, director of the Wharton Sports Business Initiative at Penn’s business school.

On the federal level, the Sports Agent Responsibility and Trust Act was approved in 2004 to serve as a “backstop” for states without their own laws, said Nebraska athletic director Tom Osborne, who coached the Cornhuskers to three national titles and was a lead sponsor of the measure while serving in Congress.

The law spells out civil penalties of up to $11,000 for violations, but an FTC spokesman said the agency has had “very, very few” complaints and taken no enforcement actions.

One of the few examples of a state enforcing the law with some consistency is Texas, which has taken disciplinary action against 31 agents in the past two years, levying a total of $17,250 in fines. That number will likely increase because several cases are pending.

In Alabama, a man who allegedly tried to solicit a Crimson Tide player hospitalized after a 2005 injury faces felony charges for failing to register with the state. So does the agent for whom the man reportedly worked as a “runner.”

From the athletes’ perspective, dealing with the crush of agents wanting to make a deal is “definitely an issue,” said Atlanta Falcons quarterback Matt Ryan, a Boston College standout and the third pick in the 2008 NFL draft.

“Heading into my last year at BC, my dad helped me out a bunch in terms of staying in contact with them. The biggest thing that I didn’t want in my last year was any kind of distractions. I had made that clear to agents in meeting with them before the season and let them know … ‘The only time I talk to you is after we finish our season.’”

Ryan believes it should be up to the individual player to handle the pressure of being a draft choice — he sees it as a sign of maturity — but others want a crackdown.

Last week, Alabama coach Nick Saban organized a conference call with Florida’s Urban Meyer, Ohio State’s Jim Tressel, NFL commissioner Roger Goodell, the NCAA and others to address the problem. The NCAA’s Leadership Council also will address the issue in October.

“We’re all trying to put our heads together to figure out what we can do to level the playing field so that everybody that’s in the agent community — which some of them are very professional — have the same opportunity to recruit players and that the bootleggers out there are guys that get punished and penalized,” Saban said.

Pittsburgh sports agent Ralph Cindrich sees his profession as a scapegoat.

He supports expanding agent oversight laws to others who have a stake in an athlete’s success. “Include the coaches, include the boosters, include the financial runners, include the players,” he said.

Others suggest the NCAA’s rules need to be changed — that forbidding players to sign with agents while in school is an illegal restriction on their fundamental right to legal counsel.

“How is retaining an agent to look after a player’s best interest in the negotiation process detrimental to amateurism?” said Rick Karcher, who directs the Center for Law and Sports at Florida Coastal School of Law. “And why should states prosecute somebody criminally for something that isn’t harming an individual player?”

“The only reason it’s a problem is because the NCAA says it is.”

Zagier reported from Columbia, Mo. Associated Press Writers David Mercer in Champaign, Ill., and George Henry in Atlanta, and AP Sports Writer Noah Trister in Little Rock, Ark., contributed to this report.

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