Darren Adam Heitner, Esq. is the Founder of 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. 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. Darren can be contacted at darren@heitnerlegal.com.
Did you know that the Federal Trade Commission (FTC) has been tasked with regulating the athlete agent industry since 2004? In September 2004, President George W. Bush signed into law the Sports Agent Responsibility and Trust Act (SPARTA or the Act), which provided the FTC with the power to enforce SPARTA with the same jurisdiction, powers and duties as though all applicable terms and provisions of the Federal Trade Commission Act was incorporated.
The enactment of SPARTA provided the FTC with the power to punish any athlete agent who either commits an enunciated type of conduct prohibited by the Act or fails to include a required disclosure, in close proximity to the signature of the college athlete, that serves as a conspicuous notice that the college athlete may lose his or her eligibility to compete as a college athlete in his or her sport. The separate forms of prohibited conduct include (i) soliciting a college athlete to enter into an agency contract by providing false or misleading information; (ii) providing anything of value to a college athlete or associated with the college athlete prior to the college athlete entering into an agency contract; and (iii) predating or postdating an agency contract.
Recently, stakeholders have proposed that FTC is in a prime position to further regulate the athlete agent profession, as members of Congress, the National Collegiate Athletic Association (NCAA) and the Power 5 conference commissioners have expressed an interest in creating rules and regulations that would allow college athletes to earn compensation in exchange for third parties’ contracting to use their names, images and likenesses in a commercial manner. In June 2020, U.S. Senator Marco Rubio introduced national legislation that is titled the “Fairness in Collegiate Athletics Act” and which would authorize the Federal Trade Commission enforcement under unfair or deceptive practices statutes.[1] A summary of a proposal created by the Power 5 conferences titled, “Student-Athlete Equity Act of 2020,” would task the FTC with establishing a “Certification Office” for the purpose of licensing and regulating athlete agents and advisors.[2] There appears to be some general consensus that, if name, image and likeness rights for college athletes are to be provided on a national scale, then the FTC must take an active role in the regulation and enforcement issues surrounding the newly developed platform.
One would reasonably surmise that the FTC is up to the task to take on the role of further regulating the athlete agent profession, as it has been burdened with such responsibility through the enactment of SPARTA in 2004. However, it appears that the FTC has not once sought to enforce SPARTA in the roughly sixteen years of it serving as binding, federal law on the athlete agent profession. During that time span, there have been numerous cases involving allegations that athlete agents committed acts that should have technically been deemed violations of the prohibited conduct under the clear language found within SPARTA. For instance, in 2017, former National Football League Players’ Association certified Contract Advisor Terry Watson pleaded guilty and admitted to providing improper benefits to three former University of North Carolina at Chapel Hill football players prior to those players entering into agency contracts with him.[3] While the State of North Carolina initiated a legal action against Mr. Watson, the FTC never used any of its enforcement mechanisms to punish Mr. Watson under SPARTA.
It appears that the FTC has been entirely unconcerned with the athlete agent profession since attaining the power to regulate the industry in 2004. While Senator Rubio and the Power 5 conferences may believe that the FTC is best fitted to regulate any name, image and likeness rights provided to college athletes by way of legislative action on Capitol Hill, there is a lack of clarity as to whether the FTC truly has the capacity to establish and operate a “Certification Office” and whether the FTC is ready and willing to enforce regulations surrounding the use of college athletes’ publicity rights when it has turned a blind eye to the athlete agent profession for nearly sixteen years.
In speaking to numerous athlete agents that I have developed personal and/or professional relationships with, I am certain that they would all prefer a national regulatory body to replace the current state-by-state licensing and regulatory bodies. It will make it much simpler for athlete agents to remain in compliance with their annual licensing requirements, reduce the cost of conducting business by way of eliminating a number of states’ fees in favor of a single fee paid to a national body and streamline laws that were meant to be uniform, but tend to vary depending on the jurisdiction.
Resting on a default option of utilizing the FTC looks like a lazy approach. Instead, perhaps it may make most sense to organize a new national body that is solely focused on sport and is tasked, in part, with ensuring that any new national law concerning the commercial exploitation of college athletes’ names, images and likenesses is carried out according to the intent of the legislation. The FTC could also assign the duty of regulating the athlete agent profession to this newly created administrative office, as it is overtly apparent that the FTC is either not interested or merely not equipped to enforce SPARTA. There already exist education and broadcasting agencies, energy and science agencies and foreign investment agencies. Why not create an agency or commission solely focused on the regulation of sport-related issues? It could fit squarely within the U.S. Department of Health and Human Services, where an agency titled, “President’s Council on Fitness, Sports and Nutrition” already exists.
[1] Rubio Introduces Legislation to Address Name, Image, Likeness in College Sports, Marco Rubio U.S. Senator for Florida (June 18, 2020), https://www.rubio.senate.gov/public/index.cfm/2020/6/rubio-introduces-legislation-to-address-name-image-likeness-in-college-sports [https://perma.cc/23EB-M8VA].
[2] Darren Heitner (@DarrenHeitner), Twitter (July 18, 2020, 7:51 AM), https://twitter.com/DarrenHeitner/status/1284455685653225472/photo/1 [https://perma.cc/NKJ4-PMUJ].
[3] Associated Press, Ex-NFL agent Terry Watson Pleads Guilty To Giving Cash To 3 Former UNC Players, ESPN (Apr. 17, 2017). https://www.espn.com/college-football/story/_/id/19180813/ex-nfl-agent-pleads-guilty-multi-year-north-carolina-tar-heels-sports-agent-probe [https://perma.cc/2BFK-UZ3T].