By Prof. Amanda Siegrist, J.D. and Steve Silver, Esq.
The NCAA has regulated the behavior of its student-athlete members since its inception in 1906[1]. It has long been argued that many NCAA regulations and bylaws are overbroad and exceed the scope of the NCAA’s authority.[2] Due to the ever-changing landscape of both high school and collegiate athletics, it is essential for the NCAA to acclimate. The NCAA has faced not only criticism, but also litigation for their overbearing bylaws and failure to prioritize student-athletes’ interests.[3]
In 2009, Andy Oliver, a pitcher for Oklahoma State University Men’s Baseball team, brought significant attention to the NCAA bylaw known as the “No Agent Rule” when he filed suit against the NCAA, becoming a catalyst for this change.[4] This article explores the relevant bylaws, addresses the importance of the recent change implemented by the Power Five conferences in the wake of growing legal and public pressure, and provides practical advice for compliance by both the student-athlete and institutions.
Past Regulation and NCAA Language
Consistently, NCAA bylaws have restricted student-athletes from nearly all interactions with agents. While the NCAA does allow for an athlete to engage legal counsel for purposes of seeking advice, the language has stipulated that the attorney cannot be present for any negotiations.[5] The relative NCAA bylaws are as follows:
12.3.2 Legal Counsel. Securing advice from a lawyer concerning a proposed professional sports contract shall not be considered contracting for representation by an agent under this rule, unless the lawyer also represents the individual in negotiations for such a contract. (Revised: 8/7/14)
12.3.2.1 Presence of a Lawyer at Negotiations. A lawyer may not be present during discussions of a contract offer with a professional organization or have any direct contact (in person, by telephone or by mail) with a professional sports organization on behalf of the individual. A lawyer’s presence during such discussions is considered representation by an agent. (Revised: 8/7/14)
The NCAA’s constitution and bylaws have attempted to allow student-athletes to seek advisory counsel, however, they do so in an unreasonably restrictive manner. The court in Oliver suggested the NCAA bylaws in question not only inappropriately govern the behavior of an attorney in regards to how they can practice law, but in doing so, attempt to govern the attorney’s respective Supreme Court. In ruling on the Plaintiff’s request for an injunction in Oliver, Ohio Common Pleas Judge Tygh M. Tone stated:
“But no entity, other than that one designated by the state, can dictate to an attorney where, what, how, or when he should represent his client. With all due respect, surely that decision should not be determined by the NCAA and its member institutions, no matter what the defendant claims is the purpose of the rule.”[6]
The NCAA attempts to solve the issue by making an allowance for the educational institutions themselves to advise the student-athletes in regards to potential professional careers through bylaw 12.3.4. The bylaw reads as follows:
12.3.4 Professional Sports Counseling Panel. [A] It is permissible for an authorized institutional professional sports counseling panel to: (Adopted: 1/16/93, Revised: 1/11/94, 1/16/10, 8/7/14, 1/17/15)
Advise a student-athlete about a future professional career;
Assist a student-athlete with arrangements for securing a loan for the purpose of purchasing insurance against a disabling injury or illness, or for purchasing loss-of-value insurance and with arrangements for purchasing such insurance;
Review a proposed professional sports contract;
Meet with the student-athlete and representatives of professional teams;
Communicate directly (e.g., in person, by mail or telephone) with representatives of a professional athletics team to assist in securing a tryout with that team for a student-athlete;
Assist the student-athlete in the selection of an agent by participating with the student-athlete in interviews of agents, by reviewing written information player agents send to the student-athlete and by having direct communication with those individuals who can comment about the abilities of an agent (e.g., other agents, a professional league’s players association); and
Visit with player agents or representatives of professional athletics teams to assist the student-athlete in determining his or her market value (e.g., potential salary, draft status).[7]
This attempted solution creates a conflict of interest for the institution because the institution values, and is assessed by, student-athletes’ completion of degrees. Furthermore, the institution lacks expertise on such issues and decisions compared to that of attorney-agents specializing in the field. In failing to establish clear and equitable standards that not only promote the best interest of the student-athlete but also abide by public policy, the NCAA was all but forced to readdress the issue.
Oliver v. NCAA
In Oliver, the Minnesota Twins drafted high school standout, Andy Oliver, in the 17th round of the Major League Baseball (MLB) draft. Oliver and his father determined it was best to seek expert advice on this monumental option to forego college and sign with the Twins, so they retained the services of Robert and Tim Barratta of Icon Sports Group. Tim Barratta, as Oliver’s attorney, attended a meeting between Oliver and the Minnesota Twins the summer before Oliver’s freshman year of college. The Twins offered Oliver $390,000 to join their organization but Oliver, on the advice of his father, turned down the offer and opted instead to attend Oklahoma State University on full scholarship. During Oliver’s junior year of college, he retained the services of the Boras Corporation prior to the upcoming MLB draft, and informed the Barrattas of his decision. The Barrattas then proceeded to invoice Oliver for their services in 2006 and, additionally, in a seemingly retaliatory manner, disclosed to the NCAA their presence at the meeting between Oliver and the Twins. Consequently, the NCAA suspended Oliver indefinitely for violating bylaw 12.3.2.1. Specifically, Oliver allegedly violated the bylaw by allowing Tim Barratta to speak on the phone with the Minnesota Twins on his behalf and to be present during the meeting with the professional baseball organization.[8]
Oliver filed suit against the NCAA seeking damages and a permanent injunction to allow him to play, calling for the court to strike bylaw 12.3.2.1 due to its arbitrary and capricious nature.[9] In the end, the court found the NCAA bylaw to be against public policy and in excess of the scope of the NCAA’s authority by attempting to control where, when and how an attorney can provide legal counsel.[10] Although the Ohio Common Pleas judge ruled against the NCAA, the NCAA circumvented nationwide implications of this ruling by settling out of court with Oliver for $750,000,[11] and thus continued to keep the bylaw in affect.
However, the insight into the court’s opinion provided by the lawsuit added further scrutiny to bylaw 12.3.2.1. As a result, in January 2016, the Power Five conferences (e.g. the Big Ten, the Big 12, the ACC, the Pac-12 and the SEC) of the NCAA voted to significantly change bylaw 12.3.2.1 by allowing high school baseball draftees to have full use of an attorney-agent as an advisor without losing their amateur status, resulting in more protection of the interests of student-athletes. Although this change only applies to baseball high school draftees, the resolve of this change demonstrates an important shift in the overall approach to governing student-athletes.
The Power Five Ushers In New Era Of Protecting Athletes
Weary of facing future litigation and the potential creation of adverse judicial precedent in another Oliver, the largest NCAA athletic conferences adopted a long overdue, common sense rule change in January of 2016 that seems to now ensure that the best interests of young athletes with MLB potential are protected.
At the NCAA’s annual convention in San Antonio, the Power Five conferences voted 75-2 to abolish the so-called “No Agent Rule” for high school baseball prospects.[12] The Big 12 sponsored the proposal — and thanks to the Power Five autonomy[13] granted in 2014— it passed easily. Remarkably, the rule goes into effect immediately for the ACC, Big 12, Big Ten, Pac-12 and SEC. Other Division I conferences not in the Power Five may adopt the rule if they so choose. The NCAA, of course, could also mandate that the smaller conferences follow the Power Five’s lead.
Under the old rule, a high school athlete selected in the MLB Draft had to make the potentially life-altering, multi-million dollar decision as to whether to turn pro essentially by himself. The NCAA allowed athletes to hire an “advisor,” but that advisor could not negotiate with the drafting team or even be present when the player’s family tried to negotiate with the team. As the Court infamously highlighted in Oliver, such scenarios are akin to “a patient hiring a doctor, but the doctor is told by the hospital board and the insurance company that he cannot be present when the patient meets with a surgeon because the conference may improve his patient’s decision-making power.”[14]
Now, high school draftees can approach the college versus professional decision with the help of an agent. The new rule[15] states, “In baseball, prior to full-time collegiate enrollment, an individual who is drafted by a professional baseball team may be represented by an agent or attorney during contract negotiations.”[16] In addition, under the new rule, high school draftees must pay the agent’s “going rate” and may not receive any additional benefits beyond negotiating services. If the athlete does not sign with the drafting team then they must terminate their relationship with the agent before enrolling in college to maintain NCAA eligibility. Specifically, the new rule provides that “if the student athletes decides to forego a professional baseball career and retain his college eligibility, he must sever all ties with the agent before formally enrolling and beginning his college academic and athletic experience.”[17]
Of course, the Power Five conferences have not specified how to calculate the “going rate” for an agent’s services, nor have they defined the scope of impermissible “additional benefits.” Although attorneys can bill a standard hourly rate for their services, it might be more difficult for the typical agent who works on commission to calculate a “going rate.” Additionally, “sever all ties” could be considered a term of art if ever challenged in court. Certainly, if a player proceeds to enroll in college he cannot have an actual agent.
While the Power Five adapts to a new era of high school baseball prospects hiring agents, the NCAA should arguably go one step further and allow current college athletes to benefit from the same rule. Unfortunately, though, the new rule will only apply to high school players. College players with eligibility remaining will still not be allowed to use an agent in contract negotiations without jeopardizing their eligibility. Instead, the NCAA utilizes a dumbfounding “advisor” system. According to a memo[18] issued by the NCAA to all Division I baseball players titled “Information Regarding the 2016 Major League Baseball First-Year player Draft, Agents and Tryouts,” athletes wishing to pursue draft possibilities while maintaining NCAA eligibility may not hire agents, but may rely on “advisors.” The memo admits, “Adviser is not defined in the NCAA Manual, but rather is a term that has been adopted by some, in part, to suggest compliance with NCAA agent legislation.” Although the NCAA has never defined “advisor” it allows currently enrolled MLB draft prospects to hire one, provided of course, that the “advisor” does not really advise them where it counts the most — actual negotiations. The NCAA compliance memo, influenced by NCAA Bylaw 12.3.2.1, specifically states,
“Under NCAA regulation, you and your parents are permitted to receive advice from a lawyer or other individuals concerning a proposed professional sports contract, provided the advisor does not represent you directly in negotiations for the contract. . . If the advisor has direct contact with a professional team regarding you or your status, whether independently or per your request or direction, the advisor shall be considered an agent and you have jeopardized your eligibility at an NCAA school. Fore example, an advisor may not be present during the discussions of a contract offer with a professional team or have any direct contact (including, but not limited to, in person, by telephone, text message, Facebook, Instagram, Twitter, email or mail) with the professional sports team on your behalf.”
Similar to the ineffectiveness of the No-Agent Rule, the “advisor” system for current college athletes only serves to hinder an athlete’s ability to properly engage in contract negotiations with a professional team. The value of the advisor is essentially nullified by not being present in the actual negotiations. An adviser can provide a lot of advice in the pre-negotiation stages, but their true value often arises in the negotiation sessions themselves. Without the adviser present, a team can outnumber a player and try intimidating or pressuring them into signing a contract. A professional organization might also ask for highly technical escalator clauses or structuring only an expert negotiator is equipped to deal with. Furthermore, salary negotiations can often trigger personal emotions when discussing the value of a player’s talent that the athlete and his parents are not best to handle. That is why a third party, such as an agent, is needed. If the NCAA, or at least the Power Five, wanted to actually protect its student-athletes, it would extend the new rule regarding agents for high school draft picks to current NCAA athletes as well. The longer it treats high school draftees differently from college draft prospects, the more likely it is to face another Oliver.
The NCAA, however, should not stop with baseball. Top athletes in hockey, basketball, soccer, and football, should not have to weigh a potentially life-altering and multi-million dollar decision alone. Granted, baseball is unique in that a player can be drafted and still elect to play in college. However, hockey is also a sport where many current NCAA players have already been drafted in the NHL. Similarly, basketball players can now declare for the NBA draft, but return to college if their draft prospects do not pan out.[19] Universities are supposed to encourage its students to make educated and informed decisions. Preventing student-athletes from doing so, though, only serves to harm those fortunate enough to face such a difficult decision.
Applying the New Rule
For those high school athletes skilled and fortunate enough to hear their name called in the MLB Draft, they should immediately take advantage of this new rule change if they are weighing a Power Five conference opportunity versus the pros. Riding a minor league bus is not always glamorous, but such a once-in-a-lifetime opportunity should not be accepted, nor dismissed lightly. To make the decision properly, athletes and their parents should seek a lawyer experienced in contracts and negotiating or an agent who has negotiated baseball contracts before. Assessing a draftee’s market value and negotiating the best deal usually falls into the skill set of an agent who is also an attorney. Athletes should be wary of agents promising Hollywood-style marketing efforts. Rather, find an advisor who can crunch the numbers and negotiate a strong contract.
Athletes are not the only ones who must adjust their strategy under this new Power Five rule. Power Five schools must also ensure they are in compliance with this new era of advising to not run afoul of any other NCAA bylaws. One major way the Power Five could aid athletes is to create a registry of approved advisers. Possessing an advanced degree, passing a criminal background check, holding a certification from a professional league’s players union, and not having a history of prior NCAA rules violations are all useful criteria if a school would want to form a list of “approved” advisers.
In addition, if a draftee elects to attend college, then that school should ask the athlete to disclose whom his adviser was. The school should then monitor the advisor and his or her firm to ensure the relationship to its athlete has been completely severed. Under the new rule, even the most benign communications between the athlete and his former adviser could constitute a violation. Compliance officers must make sure all contact has stopped. Although this can be difficult to do, it is easy to monitor social media or keep an eye on visitors to practice or who is lingering around a locker room after a game. Schools should also focus their efforts on educating athletes and their families about the new rule. Often, violations are not due to willful actions, but rather misinformation or ignorance of the nuances of a given rule. The Power Five members, whose mission as members of the NCAA should focus on education first, must fulfill that purpose and instruct its athletes on how best to navigate the agent/adviser system.
Power Five member institutions are not the only ones who must adjust to this new rule. Parents should remain cognizant of any contractual relationships with advisers and closely monitor their fee arrangement. If the adviser is an attorney, make sure they have malpractice insurance and retain a copy of the engagement agreement so there are no surprises when it comes time to pay the bill. Also, parents and athletes need to ensure the attorney’s fees are the same rate the firm charges for other clients, as any special treatment could violate this new rule. Parents and athletes should also look for clauses in the contract that create expectation or promise of future representation by this agency. In such circumstances, the adviser relationship is violating the new rule and is in violation of bylaw 12.3.1.1. This places the student at risk of losing eligibility if he chooses to return to college.
One potential approach for the NCAA to more uniformly monitor the adviser relationship would be through its own form of a standard representation agreement (SRA). If the NCAA created an SRA, similar to those utilized by professional league’s player associations, then the agent/adviser and player relationship would remain more consistent across the board. The institutions and/or the NCAA could require that the SRA be filed with them when an adviser is selected, if the athlete wished to keep his eligibility as an option. The SRA could address standard fees, term of the relationship, prohibit any benefits or gifts, stipulate the adviser’s duties, and prohibit language promising future representation. This approach would avoid a mass amount of varying adviser/athlete contracts; therefore, proactively avoiding loopholes, ambiguous language or duplicitous adviser/agents.
Conclusion
Ultimately, whether due to public relations fears, a wariness of future litigation, or a legitimate desire to protect its athletes, the NCAA Power Five’s recent abolition of the “No Agent Rule” is a major step in the right direction. Although the new rule only applies to high school baseball players selected in the MLB Draft, the rule acknowledges that teenagers should not have to make one of the most difficult and important decisions of their lives alone. In addition, the new rule injects some flexibility into an otherwise rigid system of “amateurism.” Retaining an expert adviser prior to enrolling in college does nothing to harm the integrity of the game. Rather, it ensures top athletes either head to college or turn pro through rational and educated decision making.
The Power Five’s new rule is still rather vague and has to be codified in the NCAA Manual. Certainly, there will be issues that will pop up with a rogue agent or an ill-informed parent carrying on an improper relationship. However, in due time, the rule change will benefit everyone involved. For now, compliance officers must work to educate themselves, athletes, parents, advisors, and coaches so no young man faces the punishment that Andy Oliver endured. Hopefully, ending the prohibition on agents will launch a new era in college athletics where advisers are seen not as the enemy, but as a beneficial partner in guiding the future of young athletes.
Siegrist is Assistant Professor, Recreation and Sport Management, at Coastal Carolina University.
[1] 2014-2015NCAA Financial Statement(2016), available at http://www.ncaa.org/sites/default/files/2014-15NCAA_Financial_Statement.pdf.
[2] Maureen A. Weston, NCAA Sanctions: Assigning Blame Where it Belongs, 52 B.C.L. Rev. 551 (2011).
[3] See, e.g., Jones v. Natl. Collegiate Athletic Assn, 392 F. Supp. 295 (D. Mass. 1975); Natl. Collegiate Athletic Assn v. Tarkanian, 488 U.S. 179 (1988); Bloom v. Natl. Collegiate Athletic Assn., 93 P.3d 621 (Colo. App. 2004); Oliver v. Natl. Collegiate Athletic Assn.,920 N.E.2d 203 (Ohio Com.Pl. 2009); O’Bannon v. Natl. Collegiate Athletic Assn., 7 F. Supp. 3d (N.D. Cal. 2014); Corman v. Natl. Collegiate Athletic Assn. 93 A.3d 1 (Pa. Commw. 2014).
[4] Oliver v. NCAA, 920 N.E.2d 203 (Ohio Com.Pl. 2009).
[5] 2015-2016 NCAA Division I Manual, Bylaws 12.3.2 and 12.3.2.1, 69 (2015), available at http://www.ncaapublications.com/productdownloads/D116JAN.pdf [hereinafter NCAA Manual].
[6] Oliver, 920 N.E.2d 203 at 216.
[7] NCAA Manual, supra note 4, Bylaw 12.3.4, at 69.
[8] T. Matthew Lockhart, Oliver v. NCAA: Throwing a Contractual Curveball at the NCAA’s “Veil of Amateurism,” 35 U. Dayton L. Rev. 175, 175-195 (2010) [hereinafter Throwing a Contractual Curveball].
[9] Id.
[10] Oliver, 920 N.E.2d 203at 216.
[11] Throwing a Contractual Curveball at 178.
[12] Teddy Cahill, High School Draftees Permitted to Have Agent, Baseball America (Jan. 15, 2016), http://www.baseballamerica.com/draft/high-school-draftees-permitted-agent/.
[13] Jon Solomon, NCAA Adopts New Division I Model Giving Power 5 Autonomy, CBSSports.com (Aug. 7, 2014), http://www.cbssports.com/collegefootball/writer/jon-solomon/24651709/ncaa-adopts-new-division-i-model-giving-power-5-autonomy.
[15] Oliver, 920 N.E.2d 203at 216.
[15] The actual rule is not codified in the NCAA bylaws yet as it only applies to the Power Five conference. At the time of publication, the Power Five has not published the full text of the new rule. Rather, attendees of the Convention released some of the language to the media.
[16] Liz Mullen, Power Conferences Allow Exception to Agent Rule, Sports Business Daily Global Journal(Jan. 25, 2016), http://www.sportsbusinessdaily.com/Journal/Issues/2016/01/25/Labor-and-Agents/Labor-and-Agents.aspx.
[17] Gregg Clifton, New High School Draftee Rule Highlights NCAA Problem, Law 360, (Jan. 20, 2016), http://www.law360.com/articles/748539/new-high-school-draftee-rule-highlights-ncaa-problem.
[19] NCAA Memo (Mar. 15, 2016), available at http://www.ncaa.org/sites/default/files/2016MLB_Educational-Document_20160316.pdf.
[19] Sam Vecenie, NCAA Moves Withdrawal Deadline for NBA Draft to After Combine, CBSSports.com (Jan. 13, 2016), http://www.cbssports.com/collegebasketball/eye-on-college-basketball/25448359/ncaa-moves-withdrawal-deadline-for-nba-draft-to-after-combine.
