Being a sports agent is a tough, cutthroat, profession, where agents must be mindful of their clients' professional and personal endeavors, of other agents poaching their clients, and of recruiting new clients. All of this is supposed to be done in accordance with the rules governing agents that are established by each professional sport's players' unions.
Unfortunately, too often are there reports of some agents flouting these rules. Disputes between players and their agents are generally handled in arbitration, away from the prying eyes of the media and the public. However, one recent player has decided to sue his agent in court, alleging that the arbitration process is biased towards agents after he was ordered to repay a loan that he argues was not a loan. By that player taking his agent to court, the proceedings are now public record, and have drawn attention to the practices of a well known NFL agent and perhaps the industry at large.
One of the rules that NFL agents must abide by is that agents cannot provide money, or anything of value, to induce a player to sign with them. However, agents are allowed to provide loans under certain circumstances. Here lay the critical question in this case: Does money given to a player immediately after signing a representation agreement with an agent qualify as an inducement, or a loan?
Rosenhaus met DeSean Jackson at midnight, the time he was free from his former contract, beside a highway to sign a representation agreement. Rosenhaus then gave Jackson a large sum of money in a Luis Vuitton bag. Subsequently, a loan agreement was signed. After several years, Jackson fired Rosenhaus, and Rosenhaus is now attempting to collect the outstanding balance on the alleged loan.
Although the money was qualified as a loan, the Court may view the money as an inducement for representation. If that's the case, then Jackson may not have to repay any of the money. Only time will tell what the result of this lawsuit will be.
As a result of this litigation, the NFL Players Association (NFLPA) has strengthened its sanctions against agents who violate its rules. Now, an agent who violates the agent rules three times can have their certification revoked, effectively ending their career as an NFL agent.
So what can agents do to ensure that a loan to a player is actually deemed a loan in any potential arbitration or lawsuit? Simple. Create a paper trail. If a player requests a loan, have them do it in writing. If an agent raises the possibility of a loan, they should also put the loan proposal to the player in writing. Simply put, do not rely on a loan agreement contract to be the sole evidence that a loan exists. By creating a paper trail surrounding the contract, an agent has now created additional evidence in their favor should the player ever attempt to have the loan invalidated.
Certainly, the timing of the loan does not assist Rosenhaus' claim that the money was in fact a loan. If a player immediately signs with an agent, under what circumstances would that agent know that the player needs a loan and be prepared to give a specific sum? Hypothetically speaking, if the agent was aware that the player needed a loan for a specified amount prior to signing with him, then the agent may have broken other rules such as impermissible contact with represented players. Before issuing a loan to a player, agents should be sure that a reasonable amount of time has passed to become fully aware of the player's need.
No agent should put their careers at risk by creating the perception that they have broken the rules governing their profession.
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