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The United Football League’s $150,000 Transfer Fee

I have no idea if the United Football League (UFL) is doing well with its attendance or TV ratings, and I sure hope that the league does not lose another $30 million as it did last year.  What I do know is that many agents persuade their fringe NFL clients to sign contracts with the UFL, because of the hope that it will lead to increased exposure on a high level of play, and perhaps a future NFL contract.

While agents might be in an uproar regarding the UFL demanding that NFL teams interested in signing UFL players to their active rosters after the season pay a $150,000 transfer fee, the only people with a right to be upset are the players who might not get signed because of the large fee.  And who should they get upset at?  Their agents, if they never explained the $150,000 buyout prior to signing a UFL player contract.

Section 3 titled, EXCLUSIVITY/RELEASE, lays out the transfer fee in subparagraph (b)(iv).  It states the following:

Player acknowledges and agrees that he may only receive a Release pursuant to this subparagraph (b), upon payment of One Hundred Fifty Thousand Dollars ($150,000.00) (the “Release Fee”), to be paid to Management by Player, the NFL, and NFL Club or any combination thereof.  Such Release Fee may be reduced or waived at the sole and absolute discretion of the Commissioner.

The UFL could certainly decide to waive the fee, as it did last year, but that does not change the fact that this fee exists for everyone to notice prior to signing a contract with the UFL.  As any lawyer will say, “there is no such thing as a mistake of law defense.”  The same can be said about this fee.  There is no applicable defense of, “But I did not know or was never told that there is a $150,000 transfer fee!”  There could potentially be a legal malpractice claim against an attorney-agent who did not properly divulge such important information to his clients prior to having them sign a UFL player contract.

By Darren Heitner

Darren Heitner created Sports Agent Blog as a New Year's Resolution on December 31, 2005. Originally titled, "I Want To Be A Sports Agent," the website was founded with the intention of causing Heitner to learn more about the profession that he wanted to join, meet reputable individuals in the space and force himself to stay on top of the latest news and trends.

Heitner now runs Heitner Legal, P.L.L.C., which is a law firm with many practice areas, including sports law and contract law. Heitner has represented numerous athletes and sports agents as legal counsel. He has also served as an Adjunct Professor at Indiana University Bloomington from 2011-2014, where he created and taught a course titled, Sport Agency Management, which included subjects ranging from NCAA regulations to athlete agent certification and the rules governing the profession. Heitner serves as an Adjunct Professor at the University of Florida Levin College of Law, where he teaches a Sports Law class that includes case law surrounding athlete agents and the NCAA rules.

6 replies on “The United Football League’s $150,000 Transfer Fee”

Sure, their could be a malpractice claim if:
1. The agent was also a lawyer
2. It was proven that the agent did not explain the provision
3. it was proven that the agent told the player that he didn’t have to read the contract
4. it was proven that the player did not read the provision
5. it was proven that the player would not have signed a contract containing the provision
6. it was proven that the player suffered actual, non-speculative, compensatory damages- i.e. an NFL team definitely would have signed the player and paid him X amount of dollars and the player would have earned those dollars
7. It was proven that the player did everything in his power to get another job after he lost the NFL opportunity due to the transfer fee.

Sure, you need to explain every provision of every contract to your client. But realistically, the chances that a malpractice claim lies in your hypothetical are so remote that the angle that you have presented appears to miss the mark it terms of the overall relevancy of this issue

Whether the claim is a winner or not is not necessarily the point. The fact that it is even debatable means that it could turn into a lawsuit, which costs time and money, and potentially tarnishes one’s reputation.

I got your point. We agree, that it is important to make sure that you explain every provision of every contract to your clients. That said, the real, relevant issue in my opinion is not whether or not agents are explaining the provision, its whether or not the UFL should endeavor to enforce these provisions against NFL clubs signing players under UFL contracts.

There are a lot of ways around it. The $150,000 fee only applies if a player is added directly to an NFL team’s active roster. What’s the big deal with an NFL team first adding the player to its Practice Squad?

I have beaten this topic to death on, but one thing that is important to note is that the fee was not in place last year, so an agent who assumed that the contract was the same for 2010, should be called out for not doing his or her job.

We review each contract EACH year, and draft analysis on any changes, liabilities, and important provisions. I’m not going to say that every agent should do exactly what we do, but some sort of analysis of the contract is necessary — if not, what exactly are you being paid for?

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