The Business of Sports Agents (review)

Sports Illustrated noted as "This Week's Sign of the Apocalypse" that "high school basketball phenom LeBron James drives a $50,000 Hummer H2 equipped with three TV's and a hookup for video games" (20 Jan. 2003, p. 26). This news added to the impression that James would bypass college and enter the NBA (National Basketball Association) draft. It also added to the impression that he had acquired an agent to help him acquire and manage the millions that lay in his future. If, indeed, he had entered into a contract with an agent, James would have forfeited his college eligibility. If he had done this while in college, he would have forced his team to forfeit victories and his college to forego revenues.

The Business of Sports Agents is billed as a comprehensive history of the agency enterprise, a "must read" for prospective agents, whose clients will expect contract negotiation, financial management, and endorsement possibilities. The authors, Kenneth Shropshire and Timothy Davis, are a professor of business and a professor of law, respectively, both of whom have written widely in the field. For the most part, the authors restrict themselves to four major team sports: baseball, basketball, football, and hockey. As advertised on the book jacket, the work is a "straightforward analysis of its [agency's] problems and the proposed solutions." The authors carefully explain the story and illustrate it with examples familiar to sports fans; much of what will interest business historians lies in these examples.

It should be clear that there is a similarity between entertainment agents and sports agents, and the authors make it clear that the laws involving malfeasance by agents are well developed. The difference between the two is that a movement is afoot to regulate sports agents, a movement resulting in large part from the fact that America's colleges provide the "minor leagues" for the sports of football and basketball. Because the narrative is focused on the agent, the subplot involving the interplay between the NCAA-controlled collegiate sports industry and agents is not as effectively developed as readers of this journal might wish. It is clear that, in many states, NCAA (National Collegiate Athletic Association) rules regarding agent relationships are part of state law. They have not, and likely will not, become part of federal law.

The book is divided into three sections. "Background" provides information on the historical and legal foundations of the sports agency industry, including its recent consolidation. "Problems" is a thorough discussion of the legal and ethical dimensions of applied principal-agent theory. "Solutions" presents some of the alternatives currently on the table, particularly the Uniform Athletes Agents Act (where "uniform" means across states), the subject of the penultimate chapter.

The collective bargaining agreements in the four major team sports contain provisions concerning agents, many aimed at the conflicts of interest inherent in the market in athletes. Agency law and the Racketeer Influenced and Corrupt Organization (RICO) statutes, plus the threat of disbarment for attorney-agents, appear effective controls for representatives of current professional athletes. The fundamental problem concerns the involvement of the agent before an athlete becomes a professional.

The authors accept the argument of classicist David Young that the "Greek ideal" of unpaid amateur athletes is wrong: the image once invoked by the Olympic movement and currently touted by the NCAA is wrong. Thus, many of the authors' "solutions" involve some form of compensation to college athletes. Such compensation goes beyond the current quid pro quo, under which many NCAA athletes have some or all of their tuition and fees waived in exchange for their extracurricular involvement in a sport.

Because this is a book about agents, the authors do not discuss the possibility that college sports might revert to a status consistent with that of other extracurricular activities, such as the campus newspaper or theatricals. This is an unlikely...