Niuean lawyer CIARA LUI imparts some helpful legal advice for young sports professionals unfamiliar with contracts and agents.
Are you getting the most from your Sports Agent? Or is somebody else? The role of sports agent is synonymous with the movie Jerry McGuire, and Tom Cruise’s famous catch cry ‘Show me the money’. It has evolved over time with the sports industry, and more New Zealand athletes, both professional and amateur, are now employing the expertise of an agent.
It is now generally accepted by athletes and teams alike that a player won’t negotiate their own contract. This is a far cry from the days when a player was traded before a team manager would deal with a sports agent.
The role of sports agent is primarily devoted to negotiating sports contracts, but inevitably overlaps into various other areas including legal advice. However, the need for specialised independent legal advice in certain situations cannot be overstated.
Given the size of New Zealand and the specialist nature of the role, it is relatively common for a sports agent to represent more than one player from the same team. This can give rise to a conflict of interest as it is not unusual for an agent to be negotiating multiple contracts (for multiple clients) from the same team. As a result a player can suddenly find themselves at a distinct disadvantage.
The relative size of our industry makes it foreseeable that an agent might be placed in a position where he or she compromises the demands of one client in order to seek a more favourable contract for another. It might also be possible to use the bargaining power of one client to improve the negotiating position of the other client. Whether it’s done consciously or subconsciously, the result is the same – one client’s interests can be favoured over the interests of the other. This position is even more concerning in situations where a team or sport is subject to a salary cap. In such circumstances, athletes are dividing a fixed amount of money.
Take Joe. Joe plays for the BCs and is represented by a leading sports agent, Sam. However, so are a number of other athletes on his team. This has sometimes worked in Joe’s favour because of the leverage that can result from Sam having larger negotiating power with team management. However, at salary negotiations with team management this year, Joe was told that salaries had been capped. This meant that Sam had to get the best salaries she could for Joe and her three other clients, from the same pool of money. In this situation is it possible for Sam to put Joe’s interests above all her other clients? Isn’t Sam more likely to try to reach the most amenable arrangement for all of her four clients?
To further complicate matters, a sports agent might represent both players and the coach of the same team. Coaches often naturally take an active role in the personnel decisions made by management and so often align themselves with management. This might see your agent subconsciously seeking a lesser salary or incentives for you, in favour of your coach’s interests.
Individual sports people are not immune. New Zealand is a small country and the corporate sponsorship pool is finite. Your agent might be representing you and others at the negotiation table of a major sponsor, and again may consciously or subconsciously favour the interests of another client over you.
Protecting yourself from these types of situations can start with your contract with your agent. Consult your lawyer to ensure that adequate contractual obligations are put in place to protect yourself from these types of conflicts of interest.
While it might be difficult to seek a complete bar on the representation of similar sports-people by your agent, watered-down versions can go some way to protecting your future interests. At the very least you should negotiate an obligation on the part of your agent to disclose any conflicts as they arise.
Even if you do not have these types of protections in your contract, the relationship between a player and their agent itself can give rise to enforceable obligations. These are called fiduciary obligations. Put simply, these are obligations of loyalty. They arise because of the nature of the relationship between you and your agent and the extent of your reliance on them to act in your best interests.
Even without a written contract, your agent has an enforceable obligation to work for and with you to achieve a common objective that is the best outcome for you. Your agent can’t do that effectively when they represent others with similar objectives and aspirations, because they owe the same obligations to those people. And therein lies the conflict.
• Ciara Lui-Fakaotimanava is a solicitor at Rainey Collins Lawyers in Wellington. She is of Niuean and Irish descent, hailing from Omahi, Alofi, Makefu and Mutalau.
