Sports Agent and Sports Lawyer Blog

With the Major League Baseball draft less than three weeks away, now is as good a time as any to talk about whether a prospect has associated himself with a baseball advisor.

As most prospects know, high school baseball players or collegians with remaining eligibility are permitted by the NCAA to associate with an advisor. The advisor cannot sign a contract with the player, cannot enter into negotiations with the team which selects the player, but nevertheless plays a valuable role in the process.

How is the role valuable for a high school baseball player? If the player is considered likely to be drafted, it is almost certain that he has signed a letter of intent to play college baseball, or committed to a junior college. Scouts are observing the player, and inquiring about his “signability” which refers to the question of whether he is leaning toward college baseball or professional baseball.

All high school baseball players will use the possibility of college baseball as leverage. But if the player is truly and legitimately interested in furthering his education – and equally as important, improving his baseball draft position – he may inform a scout that there is a low possibility of “signability.” On the other hand, that player may also inform the scout that while he would prefer to spend a few years on a college campus, if he is drafted highly enough and offered a correspondingly high signing bonus, he will sign.

You can see that this is a complicated dance. The player cannot tell the scout that he hates the idea of college and wants to go pro. If that happens, the team will not have an incentive to draft him in a high round. The player also cannot tell the scout that he is definitively going to college. If that occurs, the player may not be drafted at all, or could be taken in such a low round that the signing bonus amount is virtually negligible.

This is why the player needs an advisor. The advisor is the advocate for the player, and can streamline information in an unemotional fashion. While the player may have an extraordinarily competent and intelligent family member handling contacts from the team, family decisions can be emotional. At Wolf Sports Management, one of the entities behind this blog, we are in talks with numerous players about becoming their advisors for this year’s draft.

Everyone knows about Tennessee Titans running back Chris Johnson’s holdout. Johnson, who rushed for 2,006 yards and established himself as one of the league’s top 5 running backs last season, is refusing to participate in Tennessee’s off-season workouts.

Johnson and the team are at odds about renegotiating his contract. He’s currently playing under a five year, $12 million deal which he signed after being drafted in the first round in 2008. The problem here is that Johnson actually makes less money than one of his backups.

So who is to blame here? The agent, the NFL or Johnson? As this excellent analysis from NFL.com points out, it looks like Johnson’s gripes at being underpaid are legitimate complaints. But if you represent the Titans, you can probably understand why they do not want to pony up large guaranteed dollars for Johnson.

How will it end, and how will the NFL’s uncapped year impact the signing? So far we have seen few major ramifications of the uncapped year, but the Johnson situation may be one of the first tests, so to speak, of the new NFL paradigm which is inevitable

The sports agent sponsorship scam which recently came to light in England illustrates yet again why all athletes should consult their sports lawyer before handing over their hard earned money.

In the latest scam, a British sports marketing agency asked for money up front from athletes in exchange for the promise of procuring endorsements. Even Andrew Steele, one of the athletes who was ripped off, acknowledged that he thought being forced to pay upfront was a red flag:

“I asked: 'why does it have to be up front, why can't I give it once the sponsorship has been secured?' They said that if the money didn't materialise then I would get a refund, so I thought I'd go for it.

Steele said his fears were lessened because the agent employed several prominent former athletes. This seems to be a common practice among sports marketing agents who are operating scams. They pay athletes to recruit other athletes. Because pro athletes tend to stick together, they feel better when one of their own is on board.

The bottom line here is that any time a sports agent request money up front, the athlete should run quickly in the opposite direction. While there may be certain hourly and flat-fee arrangement for certain types of sports agency duties, this type scenario is rare, and should only be entered into cautiously and with someone trustworthy. When in doubt, the athlete should consult a sports lawyer.

If college football players are paid, as some hope will happen eventually, surely they will need sports agents, right?

This article notes that famed athlete-broker Sonny Vaccaro is traveling the nation trying to convince the future generation of American leaders that college athletes should be paid.

Unfortunately, as with most schemes dreamed up by Vaccaro, the concept may be sound in theory, but sorely lacking in details and in practicality.

Here are two of the biggest problems with the scheme. First, you would not know how to choose which players get paid and it would be impossible to create an equitable system. Second, when some players are paid, the ones who don’t get paid will inevitably fall by the wayside, leading to dramatically scaled back athletic departments and lost sports:

How do you choose how players are paid? Are they all paid the same?” McCann said. “Do you have a tiered system based sort of like a market? Then you can be creating stars who get paid a lot of money. I could see why some people find that inconsistent with college model of amateurism.

“(If revenue-producing athletes were paid) colleges would start cutting sports considerably. You would start seeing reduction in the size of athletic departments…. Particularly male team sports that are expensive and don’t generate a lot of revenue.”

The residual economy which would inevitably emerge if high schoolers could be sold to the highest bidders as free agents might sound like a good business practice for sports agents looking to expand their clientele, but in the big picture, this seems like a sure-fire disaster. Can you imagine the chaos which would emerge if high school athletes planning on attending college needed agents? The only benefit that I see is that this may force the federal government to step in and create a uniform agent registration process so that agents need not face the same process in all 50 states.

Everyone has an opinion about baseball sports agent Scott Boras. People either love him or hate him.

One thing that Boras does well is drive up the price for his players. This benefits all major league baseball players, and their agents, because he makes more money available. Owners’ complaints about Boras are well-documented: He is a hold-up artist who artificially inflates salaries to the point where baseball is on the verge of a permanent disparity between the large- and small-market teams.

We will cover the disparity in another blog post. What has impressed me about Boras’ recent comments is that he called out the St. Louis Cardinals for crying poverty:

In an interview that ran about 15 minutes, Boras chided the Cardinals for portraying themselves as a "middle-market franchise" and served up a reminder of a potential power-shifting decision the Red Sox made last winter.

Boras always presents unrealistic demands in the initial stages before contract negotiations get serious. He also obtains results, as witnessed most recently by the eight-year, $180 million contract that his client Mark Teixeira signed with the Yankees last offseason.

Boras also disputed MLB's complaints that the current economic crisis will depress the market for free agents:

"We hear this every year," Boras said of MLB's forecasts that spending will be down. "Based upon their bad economic forecasts of last year, I won't invest in their stocks of choice."

We recently blogged about pro athletes suing reporters. Now comes word that the Major League Baseball Player’s Association is closely monitoring baseball team media comments for signs of a collusive-type effort to artificially limit baseball salaries.

Michael Weiner, MLBPA’s new leader, says the union is worried about the “predictions” that a glut of players who are not tendered contracts by their teams will result in lower salaries for free agents:

"I don't think it's an accident that in recent weeks, management officials, without attribution, have been making predictions about what's going to happen in this year's free-agent market," Weiner said. "There have been predictions about the [money] players will get, what players will be offered [salary] arbitration and what players will be non-tendered [contracts].

As an agent, I think this behavior, if true, is deplorable. However, as a sports agency that counsels its clients on how athletes should utilize the media to deliver the right message, a subject which we have blogged about on several occasions here, this is a situation to monitor. It shows that even when you hear something as seemingly innocuous as sweeping predictions about the market, there is a method to the communication.

With the World Series finally wrapped up, it also means we’re on the figurative eve of the Hot Stove season. Baseball players have 15 days following the conclusion of the World Series to file for free agency.

This leads to endless speculation about which player will exercise their option clauses, which players will be non-tendered by their clubs, and who needs whom in order to fill lineup holes for next season. As usual, MLB Trade Rumors does a stellar job of evaluating every team’s needs and wants based on their payroll.

For anyone wondering about who are the free agents, Cot’s Baseball Contracts provides a run down of free agent position players here, and pitchers here.

Rest assured that while the agents for the big name free agents this year such as John Lackey and Chone Figgins are counting on big paydays from the few teams able to add payroll this offseason, agents for the other players are frantically studying the data to see where their clients would fit. Most players have probably already made their decision about filing for free agency, but a few are still waiting for final word from their agents before deciding what road to take.

After free agency gets going, that means the winter meetings are right around the corner, and then a quiet period over the holidays, followed by the usual flurry of arbitration hearings (and last-minute compromises) before teams report for spring training.

Baseball scouting in the Dominican Republic is a well-documented problem these days, as a few high profile players have been caught misleading their teams about their age. Now, a Dominican Republic court has ordered the Washington Nationals to pay about $75,000 in damages to former scout Jose Baez who was fired after signing a Dominican prospect who lied about his age.

As usual, ESPN The Magazine’s Jorge Arangure Jr., is all over the story (he is one of the only top-level American journalists covering the inner workings of baseball in Latin America). Based on Arangure’s summary of the testimony, the reason Baez was fired was because he was believed to have participated in the player’s scheme to lie about his age.

Bottom line here: This is just another sordid chapter in MLB’s decades-long mismanagement of baseball in the Dominican Republic. Change is inevitable, but there is no agreement on the best way to reform the system. While some people call for a global draft as the panacea to solve these problems, there are numerous reasons not to have a worldwide draft, such as the inevitable destruction of local baseball (see Puerto Rico for an example). My proposed solution is for MLB teams to invent a new classification, which would be below the current “Rookie League” level, and play two or three teams in established leagues. Those who succeed would eventually be promoted to Rookie League or low Class-A teams in the U.S. As they would be taking kids as young as 16, the teams would be charged with educating the kids and keeping them until they age out of the system a couple of years later.

If an athlete endorses a product, does it sell? This is the first of several blog posts we intend to write about the process of endorsements by pro athletes.

There is no doubt that corporations benefit when they hire pro athletes to endorse their products. The exposure is priceless when millions (or more) people watch an event in which an athlete is utilizing his sponsor's product. As for the question as to how much help an athlete's endorsement offers to a product's sales, that can only be answered on a case-by-case basis. This article implies that Lance Armstrong's endorsement of these Oakleys may help the company sell them for $400 apiece.

Corporations don't always have a strong process for following up on their endorsement money and tracking actual sales. It could be that these glasses will sell for $4,000 because they are solidly made, available in limited quantities (only 200 pairs are being produced), and have acquired a special status as sought-after by luxury consumers. How much of that aura surrounding the product can be traced back to the athlete's endorsement? It may be nearly impossible to definitively answer that question.

Should you start you pro sports career now, or should you go to college instead? Before long, that choice may be made for you. If collegiate sports spending is unsustainable, what does that mean for future professional athletes?

The Knight Commission recently held its annual gripe session in Miami and more than 75 percent of college presidents believe that the level of college athletic spending is too high, and that something must be done to reign in scholarship costs. That sounds to me like the presidents plan to cut scholarship costs as soon as they can.

What does it mean for kids hoping to pursue professional sports careers if there are fewer scholarships? Only time will tell, but one would think a natural and inevitable consequence is that the level of competition will be diluted at the collegiate level.

If collegiate competition is watered down, what happens to pro sports? Let’s consider a non-revenue sport like collegiate tennis, which has a vibrant professional tour. If scholarships are cut, more high school tennis kids will try to make it on the professional tour. Would that add to the quality of pro tennis? If colleges nationwide eliminate 500 tennis scholarships over the next decade, then how many of those kids will turn pro? More importantly, how many of the few remaining athletes will forgo collegiate tennis entirely, as the entire game is less meaningful? I predict that this is an opportunity for many sports such as tennis to capitalize and launch more professional leagues, teams and organizations, and differentiate their levels of competition. Consider what would happen if the majority of college golf scholarships were eliminated. We already have several “minor league” golf tours, but wouldn’t you expect to see a few more?

The amateur-professional sports distinction, and the blurred line between the two worlds, is a well-documented discussion. I think the line could eventually become more solidified as colleges continue to cut back, which means that college sports’ loss will be pro sports’ gain.

If you are interested in sports law related issues, please contact the sports law firm of Koch & Trushin, P.A.

I get a lot of calls and e-mails from basketball players who want to play overseas. What's the best way to get the attention of European, Asian, South American and African professional basketball coaches and teams? How good is the competition over there? What should I do position myself to play overseas basketball when my amateur career is over?

Unfortunately, the answer is complicated. We will explore the best ways to go about finding an overseas team in a later blog post. For now, let's talk about what I think is the absolute wrong way to find a basketball team overseas.

For every Jeremy Tyler, who left high school early to play basketball overseas in Israel, there are a lot more players who wish they could go over there but are not mature enough in their game and off the court to play overseas.

Tyler signed a one-year, $140,000 contract. Apparently he plans to use this league as a jump-start to a higher, more lucrative league next year. Then he'll be ready to jump to the NBA when he's eligible for the draft in 2011 (Remember that you're not draft-eligible in the NBA until one full school year after your high school class graduated - or in Tyler's case, after the class would have graduated).

One has to question the wisdom of Tyler's decision. He is passing up the chance to earn a high school diploma. Here is Tyler's reasoning:

“I left high school early because I felt I could develop my game more by playing professional,” Tyler said.
“Why?”
“Because high school sports wasn't that fun,” said Tyler, 18. “I wasn't getting better. I was developing bad habits. Hopefully here I can develop my skills, and I can show the world I have talent.”

Here's hoping his basketball career works out and he gets drafted in the NBA in 2011. If basketball doesn't work for him, he will lack even the most basic of credentials (a high school diploma) and be virtually unemployable in any career, even minimum wage jobs. This is a short-sighted and narrow-minded decision in my opinion, one that has nothing to do with basketball and everything to do with money.

Endorsements are difficult to procure for professional athletes.

It's a refrain we've heard time and again since the economy went into a nosedive in late 2008. Apparently one company thinks they have a new gimmick that will make it easier for everyone. Brand Affinity Technologies brings athletes and companies together in a streamlined deal-making process for endorsements. While the article in the New York Times contains some bizarre factual errors (such as referring to Cris Carter as a player for the Minnesota Vikings; Carter retired in 2002 and last played for the Vikings in 2001), the concept sounds interesting in principle.

If it takes off, this sounds like an ideal way for athletes to get corporate endorsements. As with any new concept, the problem is in scalability - it requires a lot of athletes and a lot of businesses. If everyone from the mom-and-pop deli to Microsoft sign up on the corporate side, and athletes from Peyton Manning down to Olympic athletes in obscure sports are available on the player side, it should work. One downside is that an executive with the company says "we can change out the talent very quickly," although he does not explain a situation in which he changed out talent (instead, he explains that he tailored a campaign to a specific event, not that he fired an athlete and replaced him with someone else). I am not sure that an agent should be steering his client to endorsement deals that have the tendency to crumble into nothing at the drop of a hat. Ask yourself whether a short-lived endorsement for your client is better than no endorsement at all? These days, until the endorsement climate picks up, the Brand Affinity concept seems to have potential.

In an era in which athlete endorsements are increasingly difficult to come by, here's a story about a coach who has sponsors knocking at his door, and has refused any athletic endorsements.

Memphis basketball coach Josh Pastner leads the most popular sports program in the city, and has apparently been approached by a number of businesses for endorsements. So far, he is content not to increase his income through endorsements, but to collect the $880,000 in salary instead, and focus on settling into his first-ever head coaching job.

There is nothing to criticize about Pastner declining to chase endorsements. His quote about why he does not want endorsements is interesting:

"I don't want it to be about me," he said. "I thought, 'Hey I haven't coached a game yet. I don't deserve any of those things and if anyone wanted to do endorsements, they should go get the former players, former coaches.' That's my thinking on it. "I feel what's best is for this first year not to do any of that. It's not to say we're not going to do it in the future, but for this year, the whole focus needs to be strictly on Memphis."

In the long run, is this young coach wasting precious capital? I suspect that he has been receiving advice from an agent, although I do not know this for sure. I do know that he is taking a precarious gamble with his career. On the one hand, he must be supremely confident that he will have a great season. If that happens, his price will only skyrocket and he can command more endorsements (both in quantity and price) next year. On the other hand, if Memphis stumbles, or does not distinguish itself, then he may command less next year.

When the NCAA settled the Andy Oliver dispute about whether high school baseball players were barred from consulting a lawyer in negotiations with professional teams, Oliver's life got a little bit easier, but the problems for high school baseball players may be just beginning.

The NCAA declared Oliver ineligible because when he was a high school senior, his adviser was present during negotiations with the Minnesota Twins. The NCAA has a rule banning high school kids from consulting with agents, attorneys or advisers. Earlier this year, the judge ordered the NCAA to stop enforcing the rule. Now that the case has settled, the order was vacated, which means that the rule can still be enforced. That does not mean the issue is dead.

However, as Baseball America points out in this analysis, the fact that nothing has changed is not a positive development. Think about the logic of this policy: A 17- or 18-year-old high school baseball player needs to make the most important decision of his life, whether to go to college on a baseball scholarship or whether to sign with the professional organization that drafted him. Logic says that he would need qualified legal advice from an expert. All sorts of questions would be going through the family's mind - Is the team's offer fair? How can I get more money from the team? What's best for my baseball career? What's the best financial opportunity? Am I being taken advantage of?

The baseball player is being compelled by the NCAA to make a life-changing decision without being educated about the options. If that's not restraint of trade, I don't know what is.

Continue reading "High School Baseball Players Still Cannot Consult Advisers" »

Is your sports agent creative in contract negotiations? Incentives in athlete and coach contracts can make or break a deal. The story of Celtics forward Glen “Big Baby” Davis’s unique contract which contains incentives for his weight, has been well documented. Apparently, the incentives worked – not only does Davis look like he lost weight, but he’ll also earn a little extra money this season.

People joke about Davis being a fat guy, but the truth is that his agent and team were smart to negotiate this incentive. It’s easy for an agent and a team to negotiate a standard contract with the boilerplate incentives based on performance (when allowed by the league). It take more work to negotiate a contract with incentives which are attainable, unique, and most importantly beneficial to everyone. Obviously the Celtics benefit by having a slimmed-down Davis while the player benefits by earning the money and also being a little healthier. (Take a look at about the creative sports contract incentives for basketball coaches in North Carolina).