Show Me the Money! The Uniform Athlete Agents Act (UAAA)

Jan. 03, 2018


Professional athletes make serious money. We’re talking an average yearly salary of $5.15 million in the NBA.  Given this earning potential, it makes sense that the agents who represent professional athletes operate in a highly competitive commercial marketplace.  Who can forget Jerry Maguire’s Show Me the Money.  Athlete agents reaping professional athletes are not problematic.  When agents recruit student athletes, however, there is more at stake than just the money.   If the agent recruits an athlete who is enrolled at an educational institution, both the athlete and the institution may face eligibility problems, loss of scholarships, or other economic penalties. An even more severe problem arises when a student athlete is unaware of the consequences of signing an agency agreement or when an agent unethically misleads a student-athlete.  



Originally, states enacted their own legislation to regulate the conduct of athlete agents.  Not surprising, those acts varied from state to state. The National Collegiate Athletic Association (NCAA) recognized the need to address these agent issues and fully supported the drafting of a uniform act so in 2000, Uniform Law Commission finalized the Uniform Athlete Agents Act (UAAA) – a potential answer to the lack of uniformity in this problematic area of the law. The UAAA sought to regulate the activities of athlete agents in order to protect the interests of student athletes and education institutions. As of today, 42 jurisdictions have enacted the original UAAA, including Minnesota and Wisconsin.

 

In 2015, after continued stories of athletes receiving gifts from agents, the ULC  strengthened the UAAA. . The Revised Uniform Athlete Agents Act (RUAAA) created more protection for student-athletes and educational institutions, simplified the system of regulations imposed upon athlete agents, and provided a uniform agent registration process for use by state agencies. To date, 15 states have introduced or enacted the RUAAA.

 

Under the UAAA and its most recent revision, a person who wants to represent student-athletes is required to register with the state. Read about registering as an agent here. The Act created certain requirements for contracts between an agent and a student-athlete. Read about those requirements here. Finally, among other things, agents are prohibited from:

 

  1. Giving misleading information or making false promises in order to get a student-athlete to enter into an agency contract

  2. Providing anything of value (i.e., money, gifts, etc.) to a student-athlete to entice them into entering an agency contract

  3. Intentionally contacting a student-athlete without a valid agent registration

  4. Neglecting to notify a student-athlete that he or she may become ineligible to participate in that sport after signing an agency contract

  5. Failing to notify an educational institution before contacting a student-athlete who is enrolled at that institution

 

Agents may be criminally liable for committing any of the above actions or for encouraging another person to take any of the above actions. Additionally, agents may be held civilly liable to educational institutions or to student-athletes for violating the UAAA. Though the UAAA has recently been revised, there are still concerns about imposing penalties for violations.

 

UAAA: Definitions

 

Understanding the UAAA may be confusing without a concrete understanding of these terms.

 

Who is an athlete agent?

 

An “athlete agent” is a person who:

 

  1. Intends to recruit a student athlete into entering an agency contract;

  2. Attempts to procure employment for a student athlete as a professional athlete;

  3. Receives compensation for advising a student athlete on a matter relating to business pursuits, finances, or career management in relation to the student’s participation in athletics;

  4. Receives compensation for managing the business affairs of a student athlete by assisting with bills, contracts, taxes, or payments; or

  5. In anticipation of representing the student athlete, provides him or her with something of value.

 

A person is an “athlete agent” only if he or she falls into one of the above categories. All athlete agents must register under the UAAA.   In Minnesota, athlete agents register here.  Individuals who assist an agent to solicit student athletes must also register under the UAAA. However, business entities, such as corporations, do not fall into one of these categories and do not have to register as an athlete agent; however, the individual employees of a corporation who meet the athlete agent definition must register.

 

Who is a student-athlete?

 

A “student-athlete” is a person who is eligible to attend an educational institution and is eligible to compete in any interscholastic or intercollegiate sport. This includes any student who is currently enrolled at an educational institution or a student who is not yet in college, such as a high school student, high school drop out, or high school graduates who delayed matriculation to a college.

 

To be considered a student-athlete under the UAAA, the student must either be currently participating in a sport, eligible to engage in a sport, or potentially eligible to participate in the future. An individual who is permanently ineligible to participate in a specific sport is not considered a student-athlete for that particular sport, but may be considered a student-athlete for a different sport. For example, a two-sport athlete who has exhausted his eligibility for baseball, but is eligible to play one more year of basketball. He is considered a student-athlete for basketball, but not for baseball.

 

What is an athlete agency contract?

 

An “athlete agency contract” is an agreement between a student-athlete and another person. The second person is the athlete agent. In the contract, the student-athlete authorizes the athlete agent to negotiate or solicit an endorsement contract or a contract with a professional sports team for the student-athlete.

 

What is an educational institution?

 

The UAAA applies to all educational institutions, public or private. An “educational institution” is an elementary school, high school, technical or vocational school, community college, college, or university.

 

UAAA: Registering as an Athlete Agent

 

To protect student-athletes and educational institutions, the UAAA requires athlete agents to register before they can represent student-athletes.

 

To receive a valid certification of registration under the UAAA, an athlete agent must disclose information relating to his or her:

  1. Education, training, and experience;

  2. History of felonies of crimes relating to moral turpitude;

  3. History of providing false or misleading representations;

  4. Previous denial, suspension, or revocation of an agent’s license; and

  5. History of causing or being the subject of any sanction, suspension, or declaration or ineligibility of a student-athlete

 

The UAAA offers two alternative ways for an athlete agent to register. First, Alternative A provides for reciprocal registration between states – this means if an athlete agent is registered in one state, then a second state would be required to register him if his registration was in good standing, there are no disciplinary proceedings pending against him, and the law in the second state is the same as the first.

 

The second option, Alternative B, occurs only if five states enact the UAAA, creating an interstate compact. Athlete agents could then register only once and be certified to practice in all states that agreed to the compact.

 

UAAA: Requirements of an Athlete Agency Contract

 

In an athlete agency contract, a student-athlete authorizes the athlete agent to negotiate or solicit an endorsement contract or a contract with a professional sports team for the student-athlete.

The UAAA creates certain requirements for these contracts.

 

Under the UAAA, an athlete agency contract must include:

 

  1. The agent’s compensation, including the amount and method of calculating that amount;

  2. Names of any unregistered, non-agent persons receiving compensation as a result of the athlete signing the contract;

  3. Descriptions of the reimbursable expenses and services that the agent intends to provide;

  4. A statement indicating that the agent is registered in that state and a list of other states in which the agent is registered; and

  5. Certain warning provisions, such as the potential impact on eligibility and the requirement to notify athletic directors.

 

The student-athlete must sign an additional document, acknowledging that he or she understands the potential impact on his or her eligibility from signing the contract. Additionally, within 72 hours of signing the athlete agency contract, both the athlete agent and the student-athlete must notify the athletic director of an affected educational institution. If the student-athlete has a scheduled athletic event within those 72 hours, the notification must occur before the event takes place.

 

Under the UAAA, an athlete agency contract is voidable if it does not meet the above requirements. These contracts may be cancelled within 14 days of signing.

 

Following are direct excerpts of the substantive sections of the ULC’s UAAA, with the comments deleted.  The full version of the act with the comments can be found here.

 


 

UNIFORM ATHLETE AGENTS ACT (2000)

SECTION 1. SHORT TITLE. This [Act] may be cited as the Uniform Athlete Agents Act.

 

SECTION 2. DEFINITIONS. In this [Act]:

  1.  “Agency contract” means 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.

  2. “Athlete agent” means 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.

  3. “Athletic director” means an individual responsible for administering the overall athletic program of an educational institution or, if an educational institution has separately administered athletic programs for male students and

female students, the athletic program for males or the athletic program for females, as appropriate.

  1. “Contact” means a communication, direct or indirect, between an athlete agent and a student-athlete, to recruit or solicit the student-athlete to enter into an agency contract.

  2. “Endorsement contract” means an agreement under which a student- athlete is employed or receives consideration to use on behalf of the other party any value that the student-athlete may have because of publicity, reputation, following, or fame obtained because of athletic ability or performance.

  3. “Intercollegiate sport” means a sport played at the collegiate level for which eligibility requirements for participation by a student-athlete are established by a national association for the promotion or regulation of collegiate athletics.

  4. “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.

  5. “Professional-sports-services contract” means an agreement under which an individual is employed, or agrees to render services, as a player on a professional sports team, with a professional sports organization, or as a professional athlete.

  6. “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

  7. “Registration” means registration as an athlete agent pursuant to this [Act].

  8.  “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.

  9. “Student-athlete” means 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.

 

SECTION 3. SERVICE OF PROCESS; SUBPOENAS.

 [(a)] By acting as an athlete agent in this State, a nonresident individual appoints the [Secretary of State] as the individual’s agent for service of process in any civil action in this State related to the individual’s acting as an athlete agent in this State.

[(b)] [The [Secretary of State] may issue subpoenas for any material that is relevant to the administration of this [Act].]

 

SECTION 4. ATHLETE AGENTS: REGISTRATION REQUIRED; VOID CONTRACTS.

  1. Except as otherwise provided in subsection (b), an individual may not act as an athlete agent in this State without holding a certificate of registration under Section 6 or 8.

  2. Before being issued a certificate of registration, an individual may act as an athlete agent in this State for all purposes except signing an agency contract, if:

    1. a student-athlete or another person acting on behalf of the student- athlete initiates communication with the individual; and

    2. within seven days after an initial act as an athlete agent, the individual submits an application for registration as an athlete agent in this State.

  3. An agency contract resulting from conduct in violation of this section is void and the athlete agent shall return any consideration received under the contract.

 

SECTION 5. REGISTRATION AS ATHLETE AGENT; FORM; REQUIREMENTS.

  1. An applicant for registration shall submit an application for registration to the [Secretary of State] in a form prescribed by the [Secretary of State]. [An application filed under this section is a public record.] The application must be in the name of an individual and, except as otherwise provided in subsection (b), signed or otherwise authenticated by the applicant under penalty of perjury and state or contain:

    1. the name of the applicant and the address of the applicant’s principal place of business;

    2. the name of the applicant’s business or employer, if applicable;

    3. any business or occupation engaged in by the applicant for the five years next preceding the date of submission of the application;

    4. a description of the applicant’s:

      1. formal training as an athlete agent;

      2. practical experience as an athlete agent; and

      3. educational background relating to the applicant’s activities as an athlete agent;

    5. the names and addresses of three individuals not related to the applicant who are willing to serve as references;

    6. the name, sport, and last known team for each individual for whom the applicant acted as an athlete agent during the five years next preceding the date of submission of the application;

    7. the names and addresses of all persons who are:

      1. with respect to the athlete agent’s business if it is not a corporation, the partners, members, officers, managers, associates, or profit-sharers of the business; and

      2. with respect to a corporation employing the athlete agent, the officers, directors, and any shareholder of the corporation having an interest of five percent or greater;

    8. whether the applicant or any person named pursuant to paragraph (7) has been convicted of a crime that, if committed in this State, would be a crime involving moral turpitude or a felony, and identify the crime;

    9. whether there has been any administrative or judicial determination that the applicant or any person named pursuant to paragraph (7) has made a false, misleading, deceptive, or fraudulent representation;

    10. any instance in which the conduct of the applicant or any person named pursuant to paragraph (7) resulted in the imposition of a sanction, suspension, or declaration of ineligibility to participate in an interscholastic or intercollegiate athletic event on a student-athlete or educational institution;

    11. any sanction, suspension, or disciplinary action taken against the applicant or any person named pursuant to paragraph (7) arising out of occupational or professional conduct; and

    12. whether there has been any denial of an application for, suspension or revocation of, or refusal to renew, the registration or licensure of the applicant or any person named pursuant to paragraph (7) as an athlete agent in any State.

  2. An individual who has submitted an application for, and holds a certificate of, registration or licensure as an athlete agent in another State, may submit a copy of the application and certificate in lieu of submitting an application in the form prescribed pursuant to subsection (a). The [Secretary of State] shall accept the application and the certificate from the other State as an application for registration in this State if the application to the other State:

    1. was submitted in the other State within six months next preceding the submission of the application in this State and the applicant certifies that the information contained in the application is current;

    2. contains information substantially similar to or more comprehensive than that required in an application submitted in this State; and

    3. was signed by the applicant under penalty of perjury.

SECTION 6. CERTIFICATE OF REGISTRATION; ISSUANCE OR DENIAL; RENEWAL.

  1. Except as otherwise provided in subsection (b), the [Secretary of State] shall issue a certificate of registration to an individual who complies with Section 5(a) or whose application has been accepted under Section 5(b).

  2. The [Secretary of State] may refuse to issue a certificate of registration if the [Secretary of State] determines that the applicant has engaged in conduct that has a significant adverse effect on the applicant’s fitness to act as an athlete agent. In making the determination, the [Secretary of State] may consider whether the applicant has:

    1. been convicted of a crime that, if committed in this State, would be a cri me involving mo ral turpitude or a felony;

    2. made a materially false, misleading, deceptive, or fraudulent representation in the application or as an athlete agent;

    3. engaged in conduct that would disqualify the applicant from serving in a fiduciary capacity;

    4. engaged in conduct prohibited by Section 14;

    5. had a registration or licensure as an athlete agent suspended, revoked, or denied or been refused renewal of registration or licensure as an athlete agent in any State;

    6. engaged in conduct the consequence of which was that a sanction, suspension, or declaration of ineligibility to participate in an interscholastic or intercollegiate athletic event was imposed on a student-athlete or educational institution; or

    7. engaged in conduct that significantly adversely reflects on the applicant’s credibility, honesty, or integrity.

  3. In making a determination under subsection (b), the [Secretary of State] shall consider:

    1. how recently the conduct occurred;

    2. the nature of the conduct and the context in which it occurred; and

    3. any other relevant conduct of the applicant.

  4. An athlete agent may apply to renew a registration by submitting an application for renewal in a form prescribed by the [Secretary of State]. [An application filed under this section is a public record.] The application for renewal must be signed by the applicant under penalty of perjury and must contain current information on all matters required in an original registration.

  5. An individual who has submitted an application for renewal of registration or licensure in another State, in lieu of submitting an application for renewal in the form prescribed pursuant to subsection (d), may file a copy of the application for renewal and a valid certificate of registration or licensure from the other State. The [Secretary of State] shall accept the application for renewal from the other State as an application for renewal in this State if the application to the other State:

    1. was submitted in the other State within six months next preceding the filing in this State and the applicant certifies the information contained in the application for renewal is current;

    2. contains information substantially similar to or more comprehensive than that required in an application for renewal submitted in this State; and

    3. was signed by the applicant under penalty of perjury.

  6. A certificate of registration or a renewal of a registration is valid for [two] years.

 

SECTION 7. SUSPENSION, REVOCATION, OR REFUSAL TO RENEW REGISTRATION.

[(a)] The [Secretary of State] may suspend, revoke, or refuse to renew a registration for conduct that would have justified denial of registration under Section 6(b).

[(b) The [Secretary of State] may deny, suspend, revoke, or refuse to renew a certificate of registration or licensure only after proper notice and an opportunity for a hearing. The [Administrative Procedures Act] applies to this [Act].]

 

SECTION 8. TEMPORARY REGISTRATION. The [Secretary of State] may issue a temporary certificate of registration while an application for registration or renewal of registration is pending.

 

SECTION 9. REGISTRATION AND RENEWAL FEES. An application for registration or renewal of registration must be accompanied by a fee in the following amount:

    1. [$] for an initial application for registration;

    2. [$] for an application for registration based upon a certificate of registration or licensure issued by another State;

    3. [$] for an application for renewal of registration; or

    4. [$] for an application for renewal of registration based upon an application for renewal of registration or licensure submitted in another State.

 

SECTION 10. REQUIRED FORM OF CONTRACT.

      1. An agency contract must be in a record, signed or otherwise authenticated by the parties.

      2. An agency contract must state or contain:

        1. the amount and method of calculating the consideration to be paid by the student-athlete for services to be provided by the athlete agent under the contract and any other consideration the athlete agent has received or will receive from any other source for entering into the contract or for providing the services;

        2. the name of any person not listed in the application for registration or renewal of registration who will be compensated because the student-athlete signed the agency contract;

        3. a description of any expenses that the student-athlete agrees to reimburse;

        4. a description of the services to be provided to the student-athlete;

        5. the duration of the contract; and

        6. the date of execution.

      3. An agency contract must 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 IF YOU SIGN THIS CONTRACT:

  1. YOU MAY LOSE YOUR ELIGIBILITY TO COMPETE AS A STUDENT-ATHLETE IN YOUR SPORT;

  2. IF YOU HAVE AN ATHLETIC DIRECTOR, WITHIN 72 HOURS AFTER ENTERING INTO THIS CONTRACT, BOTH YOU AND YOUR ATHLETE AGENT MUST NOTIFY YOUR ATHLETIC DIRECTOR; AND

  3. YOU MAY CANCEL THIS CONTRACT WITHIN 14 DAYS AFTER SIGNING IT. CANCELLATION OF THIS CONTRACT MAY NOT REINSTATE YOUR ELIGIBILITY.

      1. An agency contract that does not conform to this section is voidable by the student-athlete. If a student-athlete voids an agency contract, the student-athlete is not required to pay any consideration under the contract or to return any consideration received from the athlete agent to induce the student-athlete to enter into the contract.

      2. The athlete agent shall give a record of the signed or otherwise authenticated agency contract to the student-athlete at the time of execution.

 

SECTION 11. NOTICE TO EDUCATIONAL INSTITUTION.

  1. Within 72 hours after entering into an agency contract or before the next scheduled athletic event in which the student-athlete may participate, whichever occurs first, the athlete agent shall give notice in a record of the existence of the contract to the athletic director of the educational institution at which the student- athlete is enrolled or the athlete agent has reasonable grounds to believe the student-athlete intends to enroll.

  2. Within 72 hours after entering into an agency contract or before the next athletic event in which the student-athlete may participate, whichever occurs first, the student-athlete shall inform the athletic director of the educational institution at which the student-athlete is enrolled that he or she has entered into an agency contract.

 

SECTION 12. STUDENT-ATHLETE’S RIGHT TO CANCEL.

  1. A student-athlete may cancel an agency contract by giving notice of the cancellation to the athlete agent in a record within 14 days after the contract is signed.

  2. A student-athlete may not waive the right to cancel an agency contract.

  3. If a student-athlete cancels an agency contract, the student-athlete is not required to pay any consideration under the contract or to return any consideration received from the athlete agent to induce the student-athlete to enter into the contract.

 

SECTION 13. REQUIRED RECORDS.

  1. An athlete agent shall retain the following records for a period of five

years:

    1. the name and address of each individual represented by the athlete agent;

    2. any agency contract entered into by the athlete agent; and

    3. any direct costs incurred by the athlete agent in the recruitment or solicitation of a student-athlete to enter into an agency contract.

  1. Records required by subsection (a) to be retained are open to inspection by the [Secretary of State] during normal business hours.

 

SECTION 14.  PROHIBITED CONDUCT.

  1. An athlete agent, with the intent to induce a student-athlete to enter into an agency contract, may not:

    1. give any materially false or misleading information or make a materially false promise or representation;

    2. furnish anything of value to a student-athlete before the student- athlete enters into the agency contract; or

    3. furnish anything of value to any individual other than the student- athlete or another registered athlete agent.

  2. An athlete agent may not intentionally:

    1. initiate contact with a student-athlete unless registered under this [Act];

    2. refuse or fail to retain or permit inspection of the records required to be retained by Section 13;

    3. fail to register when required by Section 4;

    4. provide materially false or misleading information in an application for registration or renewal of registration;

    5. predate or postdate an agency contract; or

    6. fail to notify a student-athlete before the student-athlete signs or otherwise authenticates an agency contract for a particular sport that the signing or authentication may make the student-athlete ineligible to participate as a student- athlete in that sport.

 

SECTION 15. CRIMINAL PENALTIES. An athlete agent who violates Section 14 is guilty of a [misdemeanor] [felony] and, upon conviction, is punishable by [      ].

 

SECTION 16. CIVIL REMEDIES.

  1. An educational institution has a right of action against an athlete agent or a former student-athlete for damages caused by a violation of this [Act]. In an action under this section, the court may award to the prevailing party costs and reasonable attorney’s fees.

  2. Damages of an educational institution under subsection (a) include losses and expenses incurred because, as a result of the conduct of an athlete agent or former student-athlete, the educational institution was injured by a violation of this [Act] or was penalized, disqualified, or suspended from participation in athletics by a national association for the promotion and regulation of athletics, by an athletic conference, or by reasonable self-imposed disciplinary action taken to mitigate sanctions likely to be imposed by such an organization.

  3. A right of action under this section does not accrue until the educational institution discovers or by the exercise of reasonable diligence would have discovered the violation by the athlete agent or former student-athlete.

  4. Any liability of the athlete agent or the former student-athlete under this section is several and not joint.

  5. This [Act] does not restrict rights, remedies, or defenses of any person under law or equity.

 

SECTION 17. ADMINISTRATIVE PENALTY. The [Secretary of State] may assess a civil penalty against an athlete agent not to exceed [$25,000] for a violation of this [Act].


Written By:
Kimberly Lowe

For almost 20 years Kim Lowe has lawyered from the trenches. Kim lawyers from experience, using her knowledge of the law and understanding of how both for-profit and nonprofit business enterprises operate.

Emilee Walters is a second year student at St. Thomas School of Law. Emilee is an Avisen Fellow exploring a legal career in business law.

E-mail Kimberly

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