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DRAFT

FOR DISCUSSION ONLY

UNIFORM SPORTS AGENTS ACT

NATIONAL CONFERENCE OF COMMISSIONERS

ON UNIFORM STATE LAWS

MARCH 6-8, 1998

UNIFORM SPORTS AGENTS ACT

Without Comments

COPYRIGHT© 1998

by

NATIONAL CONFERENCE OF COMMISSIONERS

ON UNIFORM STATE LAWS

DRAFTING COMMITTEE ON UNIFORM SPORTS AGENTS ACT

RICHARD C. HITE, Suite 600, 200 W. Douglas Avenue, Wichita, KS 67202, Chair

JERRY L. BASSETT, Legislative Reference Service, 613 Alabama State House, 11 S. Union Street, Montgomery, AL 36130

TERESA ANN BECK, House Legislative Services Office, P.O. Box 1018, Jackson, MS 39215

ROBERT N. DAVIS, University of Mississippi, School of Law, University, MS 38677, National Conference Reporter

CHARLES W. EHRHARDT, Florida State University, College of Law, 425 W. Jefferson Street, Tallahassee, FL 32306

THOMAS L. JONES, University of Alabama School of Law, University Station, P.O. Box 865557, Tuscaloosa, AL 35486-0050

JOSHUA M. MORSE, III, Florida State University, College of Law, Tallahassee, FL 32306

HARVEY S. PERLMAN, University of Nebraska, College of Law, P.O. Box 830902, Lincoln, NE 68583

FREDERICK P. STAMP, JR., U.S. District Court, P.O. Box 791, Wheeling, WV 26003

HARRY M. WALSH, Office of Revisor of Statutes, 700 State Office Building, St. Paul, MN 55155

HARRY WIGGINS, Missouri Senate, Room 423, State Capitol, Jefferson City, MO 65101

GENE N. LEBRUN, P.O. Box 8250, 9th Floor, 909 St. Joseph Street, Rapid City, SD 57709, President

SCOTT N. HEIDEPRIEM, 431 N. Phillips Avenue, Suite 400, Sioux Falls, SD 57104, Division Chair

RODNEY K. SMITH, Capital University Law School, Columbus, OH 43215, Advisor

DAVID E. CARDWELL, 200 South Orange Avenue, P.O. Box 1526, Orlando, FL 32801, State & Local Government Law Section Advisor

FRED H. MILLER, University of Oklahoma, College of Law, 300 Timberdell Road, Norman, OK 73019, Executive Director

WILLIAM J. PIERCE, 1505 Roxbury Road, Ann Arbor, MI 48104, Executive Director Emeritus

Copies of this Act may be obtained from:

SECTION 101. SHORT TITLE. This [Act] may be cited as

Uniform Athlete Agents Act.

SECTION 102. DEFINITIONS. In this [Act]:

(1) "Athlete Agent" means any individual including an employee, representative, or any other individual acting on behalf of any individual who, directly or indirectly, contacts, induces or attempts to induce, recruits, or solicits a student-athlete to enter into an agent contract, a professional sports services contract, or an endorsement contract, or who procures, offers, promises, or attempts to obtain employment or provides services for an individual with a professional sports team or organization or as a professional athlete.

(2) "Agent contract" means any agreement under which a student-athlete authorizes an athlete agent to negotiate or solicit on behalf of the student-athlete a professional sports services contract or an endorsement contract.

(3) "Athletic director" means the person discharging the duties of coordinating and administering the overall athletic program for the educational institution attended by the student athlete.

(4) "Contact" means any communication between an athlete agent and a student-athlete by whatever means, directly or indirectly, for the purposes of inducing or attempting to induce a student-athlete to enter into an agent contract, professional sports services contract, or an endorsement contract.

(5) "Endorsement contract" means any agreement pursuant to which an individual is employed or receives remuneration because of publicity, reputation, fame, or following obtained because of athletic ability or performance.

(6) "Educational institution" means the public or private high school, college, junior college, or university that the student-athlete last attended or to which the student-athlete has expressed written intention to attend.

(7) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, public corporation, or any other legal or commercial entity.

(8) "Professional sports services contract" means any agreement pursuant to which a student-athlete is employed or agrees to render services as a player on a professional sports team or organization or as a professional athlete.

(9) "State" means a State of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(10) "Student-athlete" means an individual who:

(a) engages in, is eligible to engage in, or may be eligible to engage in any amateur or intercollegiate sporting event, contest, exhibition, or program. The term includes any individual who may be eligible to engage in any amateur or collegiate sports in the future.

(b) has participated as a member of a sports team at an institution of higher education and who has never signed a contract of employment with a professional sports team.

SECTION 103. OFFICE OF THE SECRETARY OF STATE.

(a) The [Secretary of State or other regulatory commission] shall administer this [Act].

[ARTICLE]2

REGISTRATION

SECTION 201. ATHLETE AGENT REGISTRATION

(a) An individual may not act as an athlete agent within this State or with a student-athlete who is a resident of this State prior to registering with the [Secretary of State].

(b) No person shall contact a student-athlete without first obtaining a certificate of registration from the [Secretary of State].

(c)Registration may be accomplished by filing a certificate of registration from a foreign state with the [Secretary of State]. The foreign state shall allow the registering state access to the registrant's application upon request.

(d) An applicant for registration as an athlete agent shall submit a written application for registration to the secretary of state on a form prescribed by the secretary of state. The applicant shall provide the information required by the secretary of state, which shall include:

(1) the name of the applicant and the address of the applicant's principal place of business;

(2) the business or occupation engaged in by the applicant for the five years immediately preceding the date of application;

(3) a description of the applicant's formal training, practical experience, and educational background relating to the applicant's professional activities as an athlete agent;

(4) the names and addresses of three professional references; and

(5) the names and addresses of all individuals represented by the athlete agent;

(6) the names and addresses of all athletes for whom the athlete agent is providing professional services for compensation at the time of the renewal;

(7) the names and addresses of all athletes not currently

represented by the athlete agent for whom the athlete agent has performed professional services for compensation during the three years preceding the date of application; and

(8) the names and addresses of all individuals operating within the state, who are financially interested as partners, associates, or profit sharers in the operation of the business of the athlete agent.

(9) An application for registration or renewal by any individual licensed to practice law in this State shall provide only the names and addresses of those individuals involved in the activities of the athlete agent and is not required to provide the names and addresses of all individuals who may be financially interested as members of a law firm or professional corporation but who do not become involved in the business of the athlete agent;

(10) a statement of whether the applicant has ever been convicted of a felony, or a misdemeanor involving moral turpitude;

(11) a statement of whether the applicant has made a material false, misleading, deceptive, untrue, or fraudulent representation as an athlete agent or in any document related to the business of the athlete agent.

(12) a statement that the applicant has not engaged in such other conduct that has a significant adverse impact on his or her credibility, honesty, integrity, or competence to serve in a fiduciary capacity;

(13) a statement that the applicant has not engaged in conduct which is a violation of any rule or regulation promulgated by an amateur or intercollegiate sports governing body, which resulted in a student-athlete losing eligibility to participate in amateur or intercollegiate sports contests as a member of a sports team of an institution of higher education, or conduct which resulted in an educational institution receiving a sanction from its governing body.

(11) a statement of whether the applicant as been the subject of any disciplinary action or whether the applicant's registration in this state or a foreign state has ever been revoked or suspended.

SECTION 202. EVALUATION AND INVESTIGATION

Upon receipt of an application for registration, the [secretary of state] shall review and may investigate information disclosed on the application to determine whether the information contained on the application is accurate and complete.

SECTION 203. GROUNDS FOR DENIAL OF REGISTRATION CERTIFICATE AND REVOCATION

(a) The [Secretary of State] shall deny a certificate of registration to an applicant who has been convicted of a felony or of a misdemeanor involving moral turpitude. The [Secretary of State] shall deny or revoke a certificate of registration if that individual:

(1) has knowingly made a material false, misleading, deceptive, untrue, or fraudulent representation as an athlete agent or in any document related to the business of the athlete agent.

(2) has ever misappropriated funds or engaged in other specific acts such as embezzlement, theft, or fraud which would render him or her unfit to serve in a fiduciary capacity; (b) The [Secretary of State] may revoke a registration already granted or may discipline a person registered upon a finding that the registrant or his or her representative or employee:

(1) has engaged in such other conduct that has a significant adverse impact on his or her creditability, honesty, integrity, or competence to serve in a fiduciary capacity;

(2) has had an application suspended, revoked or denied or has been the subject of disciplinary action by a players association.

Or see new Alabama statute which provides the following:

(a) The [Secretary of State] may refuse to grant or renew a registration upon proof that the applicant or the applicant's representative committed any of the following acts:

(1) Has made false or misleading statements of a material nature in the application for registration.

(2) Has ever misappropriated funds, or engaged in other specific acts such as embezzlement, theft, or fraud, which would render the applicant unfit to serve in a fiduciary capacity.

(3) Has engaged in such other conduct that significantly impacts adversely on the applicant's credibility, integrity, or competence to serve in a fiduciary capacity.

(4) Has engaged in conduct which violates or causes a student-athlete to violate any rule or regulation promulgated by the National Collegiate Athletic Association governing student-athletes and their relationship with athlete agents.

(5) Is unwilling to swear or affirm that the applicant will comply with the rules and standards of conduct for athlete agents as may from time to time be promulgated by the [Secretary of State].

(6) Has failed to include the agent's name in any advertising related to the business of an athlete agent. Advertising shall not include clothing or novelty items.

(7) Has published or caused to be published false or misleading information or advertisements, or given any false information or making false promises to a student-athlete concerning employment or financial services.

(8) Has offered anything of value to any person to induce a student-athlete to enter into an agreement by which the agent will represent the student-athlete. However, negotiation regarding the agent's fee shall not be considered an inducement.

(9) Has accepted as a client a student-athlete referred by, or in exchange for, any consideration made to an employee of, or a coach for a college or university.

(10) Has committed mismanagement or misconduct as an agent which causes financial harm to a student-athlete or college or university.

(11) Has sent a student-athlete written materials without simultaneously sending an identical copy of such written materials to the athletics director, or the director's designee, of the college or university in which the student-athlete is enrolled or to which the student-athlete has provided written intent to participate in intercollegiate athletics.

(12) Has otherwise contacted a student-athlete without the student-athlete having first initiated the contact with the athlete agent and the athlete agent having given prior notice to the college or university in which the student-athlete is enrolled or to which the student-athlete has provided a written intent to participate in intercollegiate athletics.

SECTION 204. DURATION OF REGISTRATION CERTIFICATE.

(a) The [Secretary of State] shall issue a certificate of registration to an individual who complies with Section 201.

(b) A certificate of registration issued under this act is valid for 12 months from the date of issuance.

(c) A registered athlete agent may renew the registration by filing a renewal application in the form prescribed by the secretary of state. The renewal application must include any new information not contained in, or different from, the original application. Information prescribed by the secretary of state shall include all information required in the original application.

SECTION 205. REGISTRATION FEE

(a) Each application for the registration or renewal of registration shall be accompanied by a fee.

SECTION 206. TEMPORARY REGISTRATION

When an application for registration or renewal is made and the registration process has not been completed, the [Secretary of State] may issue a temporary certificate of registration that is valid for no more than [90 days].

SECTION 207. SURETY BOND/LIABILITY INSURANCE

(a) Before the issuance or renewal of a certificate of registration, an athlete agent shall deposit with the [Secretary of State] a surety bond or evidence of a certificate of liability insurance in the sum of $100,000, payable to the state and shall be on the condition that the person applying for the registration will comply with this act, will pay all amounts due any individual or group of individuals, and will pay all damages caused to any athlete by reason of the intentional misrepresentation, fraud, deceit, or any unlawful or negligent act or omission by the registered athlete agent.

(b) This section does not limit the recovery of damages to the amount of the surety bond.

(c) If an athlete agent fails to file a new bond or liability insurance policy with the [Secretary of State] not later than the 30th day after date of receipt of a notice of cancellation issued by the surety of the bond, the [Secretary of State] shall suspend the certificate of registration issued to that athlete agent under the bond until the athlete agent files a new surety bond with the [Secretary of State].

(d) An athlete agent may provide to the secretary of state proof of an equivalent amount of professional liability insurance in lieu of a surety bond, if such professional liability insurance provides coverage for the same types of conduct, acts, or activities as are covered by the bond otherwise provided for in this section.

SECTION 208. ATTORNEYS LICENSED IN STATE.

The term "Athlete Agent" does not include a person licensed

as an attorney, dealer in securities, financial planner, insurance agent, real estate broker or sales agent, or tax consultant, or other professional person, when the professional person offers or provides the type of services customarily provided by that profession, except and solely to the extent that the professional person also recruits or solicits an athlete to enter into any agent contract, endorsement contract, or professional sports services contract, or for compensation procures, offers, promises, attempts, or negotiates to obtain employment for any person with a professional sports team or organization or as a professional athlete.

The following language was also suggested:

An attorney licensed to practice law in this State is not exempt from the requirements of this [Act], exempt to the extent the representation of the student-athlete is of a nature that representation by a person not licensed topractice law would be an unauthorized practice of law.

SECTION 301. FORM

An agent contract shall be in writing and shall include:

(1) The agent's fees;

(2) A description of any expenses the player agrees to reimburse the agent and the percentages to be paid by the student-athlete and other compensation to be paid by any other source.

(3) A description of the professional services provided to the player.

(4) Any representations provided by the athlete agent to the student-athlete.

(5) The term of the contract.

SECTION 302. WARNING NOTICE TO STUDENT ATHLETES.

(a) Every agent contract shall contain, in close proximity to the signature of the student-athlete, a conspicuous notice in boldface type in capital letters stating:

WARNING TO STUDENT-ATHLETE: SIGNING THIS CONTRACT WILL IMMEDIATELY RESULT IN A LOSS OF ANY REMAINING ELIGIBILITY TO COMPETE IN YOUR SPORT, YOU SHOULD NOTIFY YOUR COACH OR ATHLETIC DIRECTOR PRIOR TO SIGNING THIS CONTRACT.

DO NOT SIGN THIS CONTRACT UNTIL YOU HAVE READ AND UNDERSTAND ALL OF IT. DO NOT SIGN THIS CONTRACT IF IT CONTAINS BLANK SPACES. IF YOU DECIDE THAT YOU DO NOT WISH TO PURCHASE THE SERVICES OF THE ATHLETE AGENT, YOU MAY CANCEL THIS CONTRACT BY NOTIFYING THE ATHLETE AGENT IN WRITING OF YOUR DESIRE TO CANCEL THE CONTRACT NOT LATER THAN 7 DAYS AFTER THE DATE ON WHICH YOU SIGN THIS CONTRACT. CANCELLATION OF THIS CONTRACT MAY NOT MEAN REINSTATEMENT OF ELIGIBILITY.

SECTION 303. NOTICE TO INSTITUTION.

(a)Within seventy-two hours after entering into an agent contract or prior to the student-athlete's participation in the next athletic event, the athlete agent shall notify the athletic director of the institution at which the student-athlete is enrolled or the athlete agent has reasonable grounds to believe the student-athlete intends to enroll, and provide a copy of the signed agent contract.

(b) If the student-athlete has any remaining eligibility, the student-athlete must give written notice that a contract has been entered into. This notice should be provided to the athletic director] the student-athlete's educational institution within 72 hours after entering into this contract or prior to participating in the student-athlete's next athletic event, whichever comes first.

SECTION 304. STUDENT-ATHLETE'S RIGHT TO RESCIND.

(a) A student-athlete may rescind a contract with an athlete agent by giving written notice to the athlete agent of the student-athlete's recision of the contract within 7 days after the date on which the contract is signed.

(b) A student-athlete may not waive the right to rescind the agent contract.

PROHIBITED ACTS

SECTION 401. INTENTIONALLY PROVIDING FALSE INFORMATION.

(a) An athlete agent may not intentionally give any false or misleading information or intentionally make any false promises or representations to induce a student-athlete to enter into an agents contract.

(b) Offer or provide anything of value or benefit to a student-athlete. However, negotiations regarding an athlete agent's fee shall not be considered a benefit.

(c) Offer or provide anything of value or benefit to any person to induce or attempt to induce a student-athlete to enter into an agreement by which an athlete agent will represent the student-athlete.

(d) Postdate any agent contract between an athlete agent and a student-athlete or any person who acts on behalf of the student athlete.

(e) Provide or cause to be provided money or anything of value to any student-athlete, for the purpose of inducing or encouraging the student-athlete to utilize the athlete agent's services.

(f) Provide or cause to be provided money or anything of value to a member of the student-athlete's family, or any other person, for the purpose of inducing or encouraging the student-athlete to utilize the athlete agent's services.

(g) Provide or cause to be provided materially false or misleading information to any student-athlete in the context of seeking to be selected as the student-athlete's athlete agent.

(h) Engage in any activity which creates an actual or potential conflict of interest.

(I)Publishing or causing to be published any false, fraudulent, or misleading information, representation, notice or advertisement concerning the business of an athlete agent.

(j) Postdating any agent contract between an athlete agent and a student-athlete or any person who acts on behalf of the student-athlete.

(k) Doing business as an athlete agent without complying with the registration provisions contained in section 201 of this Act.

(l) Unless an athlete agent is registered with the [Secretary of State] as provided in section 201, and has notified the student-athlete's institution's coach and athletic director prior to the first contact, an athlete agent may not contact directly or indirectly whether in person, in writing, electronically, or in any other manner, for the purpose of inducing or attempting to establish a representational relationship, unless the student-athlete's eligibility to participate in the sport in which the athlete agent seeks to represent the student-athlete has expired. The notification shall be in writing and describe the nature of the contact.

(m) If a student-athlete, or any individual on behalf of a student-athlete, initiates contact with an athlete agent or athlete agent's representative or employee, the athlete agent, representative or employee, may continue the contact and make new contacts with that individual if the athlete agent immediately completes a registration application under section and complies with the notice requirements under section 404(l). No later than the first regular business day after that person first initiates contact, the athlete agent shall notify in writing the coach or athletic director of the secondary school, college, junior college, university, or other educational institution to which the student-athlete has been admitted or in which the student-athlete is enrolled, of that contact. The notification shall be in writing and describe the nature of the contact.

[ARTICLE]5

RECORDKEEPING

SECTION 501. RECORDKEEPING REQUIREMENTS

(a) Every athlete agent shall maintain the following records for a period of five years:

(1) the name and address of each student-athlete employing the athlete agent;

(2) the amount of any fee collected;

(3) a contract entered into between the athlete agent and the student-athlete;

(4) any expenses paid or gifts provided by the athlete agent in the recruitment or attempted recruitment of the student-athlete.

(b) The athlete agent shall maintain all records required by this Act for a period of five calendar years, and shall be open to inspection by the [Secretary of State] during normal business hours.

(c)Refusal or wilful failure of an athlete agent to provide the records requested shall result in revocation of the athlete agent's certificate of registration.

[ARTICLE]6

SECTION 601. CIVIL REMEDY

(a) An athlete agent who negotiates or enters into an agent contract or provides any monetary or in-kind benefits to a student-athlete and fails to notify the athletic director or president of the college or university in which the student athlete is enrolled is liable for actual damages to the college or university in which the student-athlete is enrolled that results from the student-athlete's subsequent ineligibility.

(b) For the purposes of subsection (a), a college or university suffers actual damages if, because of activities of the individual, the college or university is penalized or is disqualified or suspended from participation in intercollegiate athletics by a national association for the promotion and regulaltion of intercollegiate athletics, by an intercollegiate athletic conference, or by self-imposition and, because of that penalty, disqualification, or suspension, the institution:

(1) loses revenue from media coverage of a sports contest;

(2) loses the right to grant an athletic scholarship;

(3) loses the right to recruit an athlete;

(4) is prohibited from participating in postseason athletic competition;

(5) is required to forfeit an athletic contest; or

(6) suffers an adverse financial impact.

(7) Nothing in this Act is meant to limit common law rights or remedies.

(c)An institution or student-athlete that prevails in a suit brought under this section may recover the following:

(1) Actual damages.

(2) Punitive damages.

(3) Court costs.

(4) Reasonable attorney's fees.

(d) In actions seeking relief under this section, the claim shall not have been considered as having accrued until the discovery by the aggrieved college, university or student-athlete of the alleged violation by the student-athlete or the athlete agent after which the college, university or student-athlete shall have two years to bring an action.

Section 602. ADMINISTRATIVE PENALTY

The [Secretary of State] may assess a civil penalty not to exceed [$25,000] for any violation of this [Act].

SECTION 603. ENFORCEMENT

If the [Secretary of State] believes that a violation of certain sections of this Act may have occurred, the [Secretary of State] shall refer the case to the [Attorney General] for appropriate disciplinary action.

SECTION 604. MISDEMEANOR/FELONY

(a) Violation of section is a misdemeanor punishable by a fine of not more than or imprisonment of not more than years.

(b) Violation of section is a felony punishable by a fine of not more than or imprisonment of not more than years.