When does an Attorney become an Athlete Agent?

Many attorneys routinely provide legal counsel to athletes. So the question is, when does an attorney become an athlete agent subject to registration. The rules vary slightly by state, so let's start with the Uniform Athlete Agents Act (the "UAAA") which most states have adopted.

According to the comments under Section 5 in the UAAA:

"If an attorney's role is limited to providing legal services to a student-athlete, the attorney is not required to register as an athlete agent or comply with this act. An attorney's actions as an athlete agent, however, are outside the scope of legal services, there is no privilege and the attorney must comply with this act." (emphasis added)

An athlete agent is defined as:

"an individual who enters into an agency contract with a student-athlete or, directly or indirectly, recruits or solicits a student-athlete to enter into an agency contract. The term includes an individual who represents to the public that the individual is an athlete agent. The term does not include a spouse, parent, sibling, [or] grandparent[, or guardian] of the student-athlete or an individual acting solely on behalf of a professional sports team or professional sports organization."

This begs the question of what is an agency contract. An agency contract is defined as:

"an agreement in which a student-athlete authorizes a person to negotiate or solicit on behalf of the student-athlete a professional-sports-services contract or an endorsement contract."

A student athlete is:

"an individual who engages in, is eligible to engage in, or may be eligible in the future to engage in, any intercollegiate sport. If an individual is permanently ineligible to participate in a particular intercollegiate sport, the individual is not a student-athlete for purposes of that sport."

So it's pretty clear that soliciting clients, soliciting employment for a client and holding oneself out as an agent will require an attorney to register. The other item that is pretty clear is that the UAAA is not intended to apply to attorneys representing athletes who no longer have college eligibility, providing that they are not otherwise holding themselves out as agents.

However, let's focus a little bit more on the phrase "negotiate... a professional sports-services contract or an endorsement contract."

As a starting point, the UAAA clearly states that when a person communicates with a student athlete such person is not required to register as an agent if that person is not recruiting or soliciting and only providing information to the student athlete. (This is the reason why so many athletes have advisers and handlers now.)

Next, I followed up with representatives from three of the states where I'm licensed to ask more. Florida's statute is slightly different and defines an agent contract as: "a contract or agreement in which a student athlete authorizes an athlete agent to represent the student in the marketing of the student's athletic ability or athletic reputation."

In a conversation with a representative from the Florida Department of Business & Professional Regulation, Robert (no last name given) stated that he does not believe the Florida Act requires an attorney to register if he/she is reviewing contracts and/or negotiating the professional sports contract because the Florida Act talks about marketing student athletes. Registration becomes a requirement when soliciting athletes and seeking employment for the athletes - NOT when negotiating contracts.

The New York Act more closely resembles the UAAA. In a conversation with a representative from the New York Division of Licensing, Jeff Stats stated that he does not believe the New York Act requires an attorney to register if he/she is merely reviewing contracts, but left open the possibility that anything more will result in an attorney having to register.

The Pennsylvania Athlete Agents Act also closely resembles the UAAA. In a conversation with the Executive Director of the Pennsylvania State Athletic Commission, Gregory Sirb stated that he does not believe the Pennsylvania Act requires an attorney to register if he/she is merely reviewing contracts, but was very clear that anything more will result in an attorney having to register. I asked what if a professional team calls about a client to discuss a provision in the contract, and he said that would be enough to trigger registration in his mind. (As an aside, it did not sound like he was 100% convinced that it would stand up if challenged, but he left no doubt as to how he interpreted the law.)

I also contacted Professor Scott Rosner, who is an Associate Director of the Wharton Sports Business Initiative. He noted that there are a lot of ways an attorney can represent an athlete. He did not think mere review will require registration, but was more cautious as to what would trigger registration.

To conclude my investigation into this, I contacted Richard C. Hite, of Hite, Fanning & Honeyman, who was the Chair Person of the Committee that created the UAAA. He stated that there were lengthy discussions about this particular issue. He graciously took the time to find his notes from his time on the Committee and advised me that the official comment in Section 5 of the UAAA was inserted to ensure that an attorney who only acts as an attorney is not subject to the registration requirements. Specifically, he stated that he disagrees with idea that an attorney cannot negotiate a contract without registering. Moreover, he mentioned that the word "negotiate" in the definition of "agency contract" was not designed to prevent an attorney from negotiating the terms of a contract on behalf of an athlete, but from negotiating employment for an athlete.

So, to sum up, an attorney who merely reviews contracts for athletes is not subject to any registration requirements; but one who negotiates a contract may or may not be required to register.

This leads to my big question, if the statute requires an attorney to register as an agent for merely negotiating the terms of a contract, did the legislature step beyond it's legal authority in regulating attorneys? (Almost all states have similar provisions in their State Constitution that declare the State Supreme Court has exclusive authority to regulate the lawyers in such State.)

Clearly when a lawyer is not acting in his/her capacity as an attorney, a state may regulate the person, but negotiating contracts is unequivocally in the job description of an attorney. So isn't the legislature overreaching?

The main penalty for a person failing to register as an agent is that the contract between the person and the athlete is void (meaning that the agent is not entitled to any fees). Additionally, some states have pretty hefty fines as well.

Additional note: In New Jersey, the legislature proposed a bill in December of 2008 that would require athlete agents to register with the State. It has not yet been signed into law.

Update: In a conversation with Alexis Antonacci, a spokesperson for the Florida Department of Business & Professional Development, she stated that she thought attorneys who negotiated contracts were required to register, but did not give me any authority for that assertion.