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Agents will continue to provide valuable services to athletes. During the past thirty years agents have become prominent stakeholders in professional sports as players have enjoyed significant salary increases and have been paid a higher percentage of total revenues generated in the industry. In addition, some players have substantially supplemented their playing salaries through endorsements obtained by agents. However, agents have at times acted opportunistically to the detriment of the athletes they represent. As a result industry stakeholders have regulated agent behavior. This trend will continue in the future.

Athletes have several means by which they can seek recourse for abuses by their agents. Just as teams and players may seek judicial and nonjudicial solutions to breaches of the standard player’s contract, industry stakeholders have created methods by which players can obtain relief from breaches of the standard representation contract. Typically player-agent disputes are treated like disputes involving other principal-agent service contracts. In one high-profile case two football agents in the United States were convicted by invocation of the mail fraud statute.
In response to widespread claims of agent abuses in sports in the United States, individual states during the early 1980s began examining the possibilities of creating agent certification programs. In large part the motive for state involvement was the desire to address recruiting problems occurring on college campuses. Thus, a goal was to protect athletes and the collegiate athletic programs within a state’s jurisdiction. Most state certification programs require agents to register and to post a bond. Registration fees vary widely from state to state, and several are contingent upon enforcement of the NCAA.
Because most athletes in North American professional sports receive their amateur training at U.S. colleges, the NCAA has also explored its own means of policing agents. In 1984 the NCAA created an annual registration for agents, often working in concert with state regulations. Obviously a motive for intervention by the NCAA was to prevent its member institutions from losing the eligibility of their high-profile athletes. Other industry parties were concerned by agent abuses during the 1970s, and the agents themselves also expressed a desire to reduce agent abuses. As the agent profession developed a reputation as being unscrupulous, many competent, trustworthy agents recognized that the behavior of a few agents was hurting the image of the profession as a whole.Thus, the agents themselves sought to control and monitor behavior within their own ranks by creating a code of ethics for agents. The result was formation in 1978 of the Association of Representatives of Professional Athletes (ARPA), which grew to four hundred members by 1988. However, ARPA lacked the ability to sanction agents and folded.
Just as ARPA was created by agents to foster trustworthy behavior, lend credibility to their profession, and set standards of competency, other professions have developed similar codes of conduct. As a result some agents are influenced by codes of conduct of other professions in which they have been trained.When an agent has been trained and practices in another profession, such as law or accounting, that agent must also adhere to the standards of that profession. Other professions, such as financial advising, also have codes of conduct. Lawyers face additional constraints through their own professional standards; in the United States lawyers are bound by the code of the American Bar Association, which sets standards of professional ethics. If a lawyer engages in conduct that violates such a code, the lawyer risks being disbarred—a sanction that provides an additional means of deterring sports agent opportunism.
Finally, as a result of concern over agent opportunism, players’ associations created their own agent certification programs. These programs remove the burden of regulation from other industry parties. In North America MLB, the NHL, National Football League (NFL), and National Basketball Association (NBA) have developed agent certification programs that establish the terms of the SRC, fees, and forms of dispute resolution

Given the number of athletes in professional sports, the number of agents is relatively small compared with the number of agents in other industries, such as real estate. Despite this fact, sports agents have developed an unseemly reputation in the eyes of many people, a reputation that Bob Woolf claimed is a spillover from other fields such as the entertainment industry. Unfortunately for players, in many instances agents have not acted ethically and competently when performing services. The activities of several notorious agents have been well documented. However, estimating just how prevalent opportunistic behavior is in the agent profession would be difficult; media focus on the issue might lead one to assume that such behavior is commonplace. However, some commentators have claimed that agent opportunism is not as prevalent as media reports suggest. One problem between players and agents in professional sports occurs when an agent misrepresents his or her ability in order to represent a player. Such misrepresentation can be largely attributed to a lack of standards of competency and explains why incidences of opportunism have occurred during the past three decades. Because no standard training is required for a person to become an agent—such as the law degree required for a person to become an attorney—players have not always known or understood the types of training and experience that make a good agent.Thus, the likelihood of a player selecting an incompetent or unreliable agent is more likely to occur. The problem has been worsened by agents who have deliberately misrepresented their training and abilities in order to acquire a player as a client.
As player salaries have increased (increasing the potential financial benefits of representing professional athletes), competition between agents has grown; such competition may result in more abuses by agents who attempt to induce players to contract with them by any means possible. Some agents have resorted to soliciting players by providing prospective clients or their families with cars, money, or other perks. Problems of recruitment are compounded when an agent circumvents regulations set out by sports governing bodies such as the National Collegiate Athletic Association (NCAA) or when an agent is an attorney and violates solicitation rules set out in codes of conduct for the legal profession. Examples of agents lurking on college campuses have been well documented; players and their families have been forced to change their telephone numbers frequently and even forced out of their living accommodations to avoid persistent agents.
In other situations agents, although not guilty of putting forth inadequate effort, have been guilty of engaging in morally questionable behavior in order to contract with players. Given that an agent is willing to circumvent collegiate regulations and the law, that agent is capable of shirking his or her duties on behalf of the player in the future. In one instance a National Hockey League (NHL) team had an arrangement with an unscrupulous agent by which the team paid the agent money to negotiate on behalf of his players specifically with that team. Other agents have offered amateur coaches financial rewards to steer amateur athletes to those agents.
Another problem is conflicts of interest. The most common conflict of interest occurs when an agent represents multiple clients, such as players competing with each other for a position on the same team. Agents should reveal such conflicts. Comprehensive sports management firms face another conflict. A large firm with multiple clients, such as IMG, may have conflicts in which the firm is also involved in event management. A player might be encouraged to attend or engage in a tournament that would further the interests of the firm but not necessarily those of the player.

An athlete delegates authority to an agent to negotiate contracts with the team that holds the athlete’s rights and to provide other services, such as seeking endorsement opportunities.Today most agents charge a player a fee based on a percentage of the total salary or endorsements negotiated on behalf of the player, although the actual percentage has decreased as total transaction values have increased. The industry standard for contract negotiations in North America has decreased from 10 percent during the late 1960s and 1970s to between 2 percent and 5 percent, depending on the services provided to the player.With more agents vying to represent players, financial rewards for agents are likely to decrease as agents accept less favorable terms in order to contract with players.Thus, the agent business is a highly competitive profession in which aspiring agents establish themselves only with difficulty. Typically agents enter into a written contract with the players they represent. Similar to the standard player’s contract that is negotiated with a team by the agent on behalf of a player, a standard representation contract (SRC) is negotiated between player and agent. The SRC establishes the rights and responsibilities between player and agent and clearly defines the period of service, exclusivity of representation, fee system, and if/how agent expenses are repaid. The terms of the SRC are created and enforced by the players’ association. Although initiated to protect players, the SRC cannot fully police agent competence in the sense that the contract calls only for a good-faith effort on the part of the agent; in other words, the agent’s efforts do not necessarily have to be successful. The player-agent relationship is also considered to be fiduciary: Agents are bound to act faithfully and honestly toward the players they represent. In this manner any breaches of contract are treated like breaches of service contracts that govern any other agency relationship, such as that between a vehicle owner and a mechanic. Thus, the agent is bound by two types of legal duty to the player: The agent must agree to perform the services contracted for and must act in the best interests of the player. Although this arrangement may seem straightforward, the ability of the agent to fulfill the terms of the contract can vary greatly.
In addition to negotiating a player’s contract with a team, an agent may provide a number of other services. These may include (1) providing legal counseling, (2)
obtaining endorsements and other income for the
player, (3) providing financial planning and management,
(4) providing career planning and counseling,
(5) improving the player’s public image, and (6) resolving disputes under the employment contract, such as arbitration. Agents are then compensated based on the services they provide, which is typically achieved in any of four ways: (1) on an hourly rate, (2) a flat rate, (3) a percentage of the athlete’s salary, such as a commission, or (4) any combination of the preceding three ways. By far the most popular means of compensation is using a performance-contingent compensation (commission) system, although agents providing specific services may use a compensation scheme that is standard for their profession, such as attorneys who choose to bill at an hourly rate. Many agents do not represent players as a full-time occupation, and they perform services to other principals in the disciplines they have been trained in, such as financial planning or law. As salaries have escalated, the percentage that agents have charged players has decreased. Endorsements usually result in a substantially higher fee.The rationale for charging more is simple: An agent is more directly responsible for obtaining an endorsement and therefore expects to be paid more for the effort.
In order to perform the variety of services offered to players, agents must be cognizant of many issues in professional sports. Planning strategies, legal issues involved in creating personal service corporations, rights to publicity (an athlete’s ability to retain the right to his or her name and likeness while agreeing to play for a team or in an event), tax planning, and state and local income taxation of professional athletes playing outside of their residences are important issues of which agents must be aware. In addition, agents must be aware of issues specific to the sport of their client, such as the application of revenue laws and codes to foreign-born athletes playing in other countries and the growing internationalization of sports, which today can involve complex transfer fees paid to foreign sports clubs or associations to release players to play elsewhere.
However, the relationship between player and agent cannot be defined solely on the basis of services that are provided in the SRC. Agents also provide a number of other benefits that are not so easily defined. Some contract negotiations can last for prolonged periods, which can be grueling for a player and strain relations between player and team and reduce team morale. In this instance an agent can act as a buffer between management and player. Because at contract time team management tries to minimize the player’s contribution to the team in order to pay a lower salary, an agent can reduce any emotional trauma that the player might endure as result of having his or her abilities downplayed by team management.The agent also can act as a lightning rod for criticism; team management and local media members can more easily vilify an agent than a player for being greedy.
Agents are often expected to provide other services that are not necessarily addressed by a SRC. For example, the pioneer agent Bob Woolf recalled when his client, the former Boston Bruin Derek Sanderson, was on vacation in Hawaii and had left a number of urgent messages for Woolf at his office in Boston. Sanderson wanted Woolf to call the manager of the hotel that Sanderson was staying at in Hawaii to complain about the lack of hot water in his room.

Although commercialized sports have been around since the nineteenth century, the widespread use of agents by athletes has been a relatively recent phenomenon. In using a skilled negotiator rather than negotiating on their own behalf, athletes have been able to compensate for an imbalance in bargaining position that has traditionally existed between themselves and management while freeing up the time to focus on developing their athletic skills.
Prior to the 1960s the bargaining position of professional athletes was weak; in professional team sports many people have described the historical relationship between players and teams as a dictatorship, with owners exercising considerable control over players. Owners were able to exercise such control through the use of the reserve clause, which bound a player to a specific team and was enforced by a lack of alternative employment opportunities available to professional athletes. This practice continued because athletes historically represented themselves and negotiated with a general manager or another representative of a club who likely had many years of negotiating experience. Players also understood that many other athletes were more than willing to replace them should they show any dislike for the terms offered by management. As a result many athletes felt exploited and underpaid.Thus, we can see the development of agents and players’ associations in professional sports as an attempt by players to overcome their inferior bargaining position by acquiring the services of a skilled agent to negotiate the terms of their contracts and by collectively bargaining with owners as a single unit.
Agents have a close relationship with the players’ associations in their clients’ respective sports, and the agent’s role is necessary because of the uniqueness of the representation provided by players’ associations. In contrast to a decline in unionism in most industries, in sports players’ associations have only recently emerged as powerful bargaining units, and their adversarial relationships with their respective leagues in North America have been the cause of frequent work stoppages in recent years. However, players’ associations are different from other labor unions in that they do not focus on establishing individual salaries in the process of collective bargaining. For this reason agents have become an important part of the professional sports industry, while players’ associations have focused on other means of increasing player salaries, by negotiating minimum salary levels and bargaining for mechanisms such as free agency and salary arbitration. The Major League Baseball (MLB) Players’ Association leader, Donald Fehr, and other union leaders have acknowledged that agents are more effective at negotiating players’ salaries than are unions because of the disparity of the various athletes’ playing skills. Because playing skill is the prime determinant of an athlete’s wages, the assistance of a capable agent can only increase potential earnings during an athlete’s relatively short career span and assist the athlete in establishing a foundation for lifetime financial stability.
Agents began to emerge throughout professional sports during the mid-1960s, although agents had affiliated with prominent athletes for decades. The first widely known agent in professional sports was C. C. “Cash and Carry” Pyle, a promoter and movie theater manager who negotiated a playing salary and endorsement contracts for the U.S. college football great Red Grange in 1925. Pyle organized a series of playing tours that, combined with endorsement deals, resulted in earnings in excess of $325,000 for Grange. However, the true pioneers of the sports agent profession as it is known today are considered to be Bob Woolf and Marty Blackman and Mark McCormack of International Management Group (IMG).
Although many agents represented athletes independently, during the 1970s sports management organizations, such as IMG and Pro-Serv, emerged to look after the affairs of athletes. In 1975 IMG employed 250 people and had twelve offices throughout the world representing athletes in individual sports. By 1991 IMG had forty-three offices in twenty countries, employing one thousand people and representing more than four hundred athletes in a variety of sports.Today IMG is considered to be the largest sports management agency in the world, generating $1.4 billion in revenues in 2001 alone, employing more than thirty-five hundred people worldwide, and representing more than one thousand athletes.