BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 238|
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THIRD READING
Bill No: SB 238
Author: De León (D)
Amended: 4/13/11
Vote: 21
SENATE BUSINESS, PROF & ECON DEVELOP COMM : 8-0, 04/04/11
AYES: Price, Emmerson, Corbett, Correa, Hernandez, Vargas,
Walters, Wyland
NO VOTE RECORDED: Negrete McLeod
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Athlete agents
SOURCE : Carmen A. Trutanich, City Attorney of Los
Angeles
DIGEST : This bill increases penalties for a violation
of the Miller-Ayala Athlete Agents Act (Athlete Agents
Act), which regulates interactions between athlete agents
and college and professional athletes. The bill requires
an agent to relinquish all consideration received in the
violation, and specifies the distribution of relinquished
moneys.
ANALYSIS : Existing law:
1. Regulates specified activities of an athlete agent in
representing or to represent student and professional
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athletes.
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.
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.
4. Defines "student athlete" as any individual admitted
to or enrolled as a student in an elementary or
secondary school, college or university or other
educational institution if the student participates as
an athlete in a sports program.
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.
6. Requires an athlete agent to file specified
information, including whether a student athlete or
educational institution has been impacted by the
actions of the athlete agent, with the Secretary of
State, and to advise an athlete of the availability of
this information.
7. Prohibits an athlete agent from offering or providing
money or any other thing of benefit or value to a
student athlete and imposes additional requirements
pertaining to an athlete agent's transactions with a
student athlete, specifying the circumstances under
which an athlete agent may contact a student athlete,
or his or her family.
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8. Prohibits an athlete agent or athlete agent's
representative from offering or providing money or
anything of benefit or value to a school or
representative of a school in return for a client
referral.
9. Requires an athlete agent and student athlete who
enter into an agent contract to provide written notice
within 48 hours of the contract to the chief
administrator of the school where the athlete has been
admitted or is enrolled and requires the athlete agent
to include a disclosure in a contract with a student
athlete, warning the student that he or she may lose
eligibility to compete in interscholastic or
intercollegiate sports upon entering into the contract
and allowing the student athlete to rescind the
contract within 15 days.
10. Makes a violation of the Athlete Agents Act by an
athlete agent or athlete agent's representative or
employee a misdemeanor, punishable by a fine of not
more than fifty thousand dollars ($50,000), or
imprisonment in a county jail not exceeding one year,
or by both that fine and imprisonment.
11. Allows a court to suspend or revoke the privilege of
an athlete agent to conduct business as such if he or
she is convicted of a violation of the Athlete Agents
Act.
This bill:
1.Requires a court to suspend or revoke the privilege of an
athlete agent to conduct business as such if he or she is
convicted of a violation of the Athlete Agents Act.
2.Specifies the factors a court shall consider in deciding
whether to revoke the privileges of an athlete agent,
including the nature and seriousness of the misconduct,
the number of violations, the persistence of the
misconduct, the length of time over which the misconduct
occurred and the willfulness of the defendant's
misconduct.
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3.Specifies that a court shall order an athlete agent or
athlete agent's representative or employee to relinquish
all consideration received in connection with the
violation, and specifies the distribution of those
relinquished moneys.
Background
The National Collegiate Athletic Association (NCAA), the
national governing body for college athletes, coaches, and
athletic departments, has rules in place requiring college
athletes to maintain amateur status while they are in
school. With amateur status, NCAA rules prohibit student
athletes from accepting what the organization terms as
"improper" benefits, including gifts, cash, or other items
of value. Under NCAA rules, student athletes permanently
lose their collegiate eligibility if they sign with an
agent.
Athlete agents often attempt to provide college players
with benefits in order to induce the athletes to hire them
once they become professional. This can be extremely
lucrative, as an athlete agent typically receives 3-10% of
the gross value of a professional sports contract. An
athlete agent can earn many millions of dollars
representing a single player over his professional career.
A recent Sports Illustrated article, based on extensive
interviews with a certified NFL agent in the business for
over 20 years, highlighted the pervasiveness of illegal
interactions between the agent and NCAA athletes. The
agent confirms that he provided thousands of dollars in
cash to many student athletes while they were still in
college, and several players also confirm that they
accepted money from the agent.
Violation of NCAA rules can result in severe penalties for
athletes, coaches, and school athletic departments.
Athletes can be declared ineligible to play. School
athletic departments may be forced to pay significant fines
to the NCAA. Wins and championships may be retroactively
forfeited if it is found that a player on the team violated
the rules. Teams may be banned from participating in
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postseason events for a number of years and the number of
athletic scholarships teams offer can be restricted.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/11/11)
Carmen A. Trutanich, City Attorney of Los Angeles (source)
California Association of Independent Colleges and
Universities
California Interscholastic Federation
Stanford University
University of California Office of the President
University of Southern California
ARGUMENTS IN SUPPORT : The City Attorney of Los Angeles
believes that the current penalties for athlete agents who
violate the law are too lenient, particularly when weighed
against the significant damage that results from illegal
practices. As stated by the City Attorney, "unscrupulous
agents thrive on exploiting the financial circumstances of
student athletes, encouraging them to accept financial
incentives." The City Attorney also notes that since
athlete agents are motivated by financial profit, there
must be a "sufficient penalty" like relinquishing revenues.
According to The University of Southern California (USC),
this bill is necessary because the current law provides
only minimal oversight of athlete agents and this bill
would help remedy this by enhancing enforcement and
requiring the courts to revoke the privileges of an athlete
agent. USC notes that under current law, these agents must
be sued civilly in order to force them to give up revenue
connected with illegal activity, but such claims are rarely
brought against agents. USC states that the bill provides
for greater incentives for such claims to be brought forth.
CTW:nl 5/11/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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