The hefty contracts and marketing deals athletes now command have attracted states’ attention to the conduct of sports agents in light of state laws and regulations. Forty-three states have athlete agent regulations that regulate the registration, licensing, and conduct of athlete agents. As the following example illustrates, athlete agents who do not diligently follow state laws could find themselves out of the deal.
According to published reports, Joel Bell, the former agent of NBA player Michael Beasley, was a licensed sports agent in the state of Kansas when he signed a player-agent agreement to represent Beasley. Beasley played basketball at Kansas State during 2007-08 and was the second overall pick in the 2008 NBA draft.
Bell sued Beasley claiming he breached his representation agreement with Bell’s agency, Bell Sports Incorporated, when Beasley fired Bell just before signing an endorsement deal with a major sports apparel label. Beasley filed a counterclaim against Bell and Beasley’s former coach, alleging they violated NCAA rules and federal laws governing agent conduct. (The complaint against the former coach was later withdrawn.)
The Montgomery County Maryland Circuit Court judge ruled on November 29, 2011, that Bell could not enforce the player-agent agreement he signed with Beasley in 2008 because Bell had operated without a sports agent license in the state of Maryland. The agreement between Beasley and Bell stipulated that the agreement was governed by and construed in accordance with the laws of the state of Maryland. Section 4-403 of the Maryland Uniform Athlete Agent Act states that “an individual may not act as an athlete agent in the State without holding a license” and that “an agency contract resulting from conduct in violation of this section is void and the athlete agent shall return any consideration received under the contract.” Because Bell was not a licensed sports agent in Maryland, the contract was void.
The lesson from this case is that an athlete agent can suffer professionally and financially from being uninformed. Jackson Lewis attorneys are available to answer questions about state laws that apply to sports agents.