Repeal Sports Agent Laws And Pay Student-Athletes
In the past three months, I have traveled around the country, speaking at six different universities. Most of the time the topic touched upon, or was centered on, ethics in the sports agent profession. A common question from the audience is how to fix a system that practically allows agents to give student-athletes benefits without fear of reprimand. The NCAA has virtually no jurisdiction over agents and the players’ associations, states, and federal government have not equitably enforced their rules and laws, or just not enforced them at all. The Sports Agent Responsibility and Trust Act (SPARTA) has been federal law since 2003. In eight years of existence, it has never been enforced. The common answer at these panels is that the rules and laws are on the books; the way to effectively change the landscape for the better is to enforce those rules and laws. Now I am about to throw a wrench in there. What if we got rid of all rules and laws that restrict sports agents from giving money and any other kind of benefit to student-athletes?
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.