BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 101|
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THIRD READING
Bill No: SB 101
Author: Corbett (D)
Amended: As introduced
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMMITTEE : 8-0, 4/4/11
AYES: Price, Emmerson, Corbett, Correa, Hernandez, Vargas,
Walters, Wyland
NO VOTE RECORDED: Negrete McLeod
SUBJECT : Athlete agents: conflicts of interest
SOURCE : Association of Talent Agents
DIGEST : This bill updates provisions in the Miller-Ayala
Athlete Agents Act (Athlete Agents Act) to address
potential conflicts of interest related to agencies
servicing professional athletic teams and leagues in
situations where they are not related to the employment of
athletes an agency may also represent.
ANALYSIS :
Existing Law:
1. Regulates specified activities of an athlete agent in
representing student and professional athletes.
(Chapter 2, Division 8, commencing with Section 18895 of
the Business and Professions Code ÝBPC])
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2. Defines "agent contract" as any contract or agreement in
which a person authorizes or empowers an athlete agent
to negotiate, or solicit on behalf of the person, with
one or more professional sports teams or organizations,
for the employment of the person by one or more
professional sports teams or organizations, or to
negotiate or solicit on behalf of the person for the
employment of the person as a professional athlete.
(BPC Section 18895.2)
3. Defines "athlete agent" as any person who, directly or
indirectly, recruits or solicits an athlete to enter
into any specified type of contract, or for compensation
procures, offers, promises, attempts, or negotiates to
obtain employment for any person with a professional
sports team or organization or as a professional
athlete. (Id.)
4. Includes a talent agency as an "athlete agent" if they
engage in the activities of an athlete agent as defined.
(Id.)
5. Defines particular types of contracts entered into by
athlete agents on their own behalf or with others, and
when persons may be considered as participating in
negotiations to enter into a contract. (Id).
6. Requires an athlete agent to file with the Secretary of
State specified information about his/her background,
criminal and disciplinary record, training and
experience, and to advise an athlete of the availability
of this information. (BPC Sections 18896-18896.6)
7. Prohibits an athlete agent from owning or having a
financial interest in any entity that is directly
involved in the same sport as a person with whom the
athlete agent has entered into an agreement contract for
the purposes of negotiating an endorsement contract,
financial services contract or professional sports
service contract, or providing advice concerning
potential or actual employment as a professional
athlete. (BPC Section 18897.27)
8. Requires an athlete agent, if providing financial
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services to the athlete, to disclose potential conflicts
of interest, as specified. (BPC Section 18897.3)
9. Prohibits an athlete agent from dividing fees with or
receiving compensation from a professional sports
league, team, or other organization or its
representatives or employee, or offer or allow any
full-time employee of a union or players' association
connected with professional sports to own or participate
in any of the revenues of the athlete agent. (BPC
Section 18897.47)
10.Makes the violation of any provisions of the Act a
misdemeanor offense. (BPC Section 18897.93)
This bill:
1. Prohibits an athlete agent from having an ownership or
financial interest in any entity, only if that entity
directly employs an athlete in the same sport as a
person with whom the athlete agent has entered into an
agent contract.
2. Prohibits an athlete agent from dividing fees with, or
receiving compensation from, a professional sports
league, team, or other organization, or its
representatives or employees, only if the fees or
compensation are directly related to on-field activities
of athletes or other representation of the league, team,
or organization as it directly relates to the employment
of athletes.
3. Prohibits an athlete agent from offering or allowing any
full-time employee of a union or players' association
connected with professional sports to own or participate
in any of the revenues of the athlete agent.
Background
According to the Senate Business, Professions and Economic
Development Committee, problems associated with illegal
athlete agent conduct are national in scope. Far too
often, the actions of athlete agents in other states
results in the loss of student-athlete eligibility, the
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imposition of financial penalties on the student-athlete's
institution and the taint of a "scandal" on both the
institution and the larger intercollegiate sports
community. In an effort to address these problems, the
National Conference of Commissioners on Uniform State Laws
(NCCUSL) began work in 1997 on developing a model state
athlete agent law. At the time, there were 28 state
athlete agent laws each with a different set of fees,
bonding and registration requirements, and a list of
prohibitive acts. Many of the laws were ineffective and,
as a result, were sporadically enforced. In addition,
agents expressed frustration over the differing state
regulations and the time and costs associated with
registering in many of the jurisdictions. Many agents
simply ignored most the state agent laws and the
corresponding registration requirements. After three years
of work, that included input from sports agents,
representatives of the professional sports leagues players'
associations, the NCAA (National Collegiate Athletic
Association), and the NCCUSL completed its work in drafting
the Uniform Athlete Agents Act (UAAA). The model law
provides for important protections for student-athletes and
educational institutions and it also seeks to assist
athlete agents by standardizing and streamlining the
regulations governing the profession.
The UAAA has been enacted in 40 states and the District of
Columbia. Conduct currently prohibited by the UAAA does
not mention conflicts of interest for athlete agents who
represent athletes and their employers for marketing and
other related purposes.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 4/4/11)
Association of Talent Agents (source)
ARGUMENTS IN SUPPORT : According to the author's office,
the talent agency business has grown since the
implementation of the Athlete Agents Act and many agents
"now represent leagues and teams, not in connection with
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the employment of athletes, but for marketing, sponsorship,
endorsement, media rights, and purchase or sale of a team."
The author's office additionally asserts that
"representation in these areas does not interfere with the
representation of an athlete against such teams." This
bill aims to reflect these changes in the industry.
CTW:mw 4/5/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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