Sports Agents and Endorsements - Energy Drinks
Sports Agent Lawyer Blog was recently quoted in an article in San Diego City Beat about the energy drink sports endorsement market.
While I have no knowledge of any of the principals involved in the story or the legal proceedings, I was asked to comment by the reporter about the agent’s purported practice of taking a direct commission from the energy drink company when he linked his athletes to the company.
The article calls it a “questionable double-dipping practice.” Here is how it works: The agent has a business relationship with a sponsor. The agent also has athlete clients who need sports endorsements. Naturally, the agent links the athlete and sponsor together and everyone is happy. The questionable practice is that the agent not only takes a commission from the athlete – all marketing agents take a commission when they procure endorsements – but he is also paid by the company.
Here is my quote about the practice:
Attorney Jason Wolf, who blogs about these issues at Sportsagentlawer.com, said this double-dipping isn’t illegal.“It’s not common, but it’s also not uncommon,” Wolf said. “It’s not unethical, but it raises some questions as to whether the agent is in it for himself or has his clients’ best interest in mind. It makes me raise maybe one eyebrow instead of two.”
The reason this raises questions is that the agent is supposed to have his client’s best interests in mind. This practice is not proof that the agent is failing to meet his fiduciary duty, but it definitely raises questions. I also suggested that perhaps one reason that the practice is not unethical is that there is no uniform code of ethics governing sports agents, and no enforcement of such regulations. Without a code of ethics, how can conduct be deemed to be in violation of the ethical regulations?
