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Wednesday, October 03, 2007
Sports Agencies Representing Both Players and Ownership: Conflict-of-Interest or Common Sense?

Less than a month ago, Rick Karcher wrote an excellent post about the movement of Hollywood talent agency Creative Artists Agency (CAA) into the business of representing sports coaches, and how this new business unit conflicts with CAA's primary line of business -- representing athletes. Professor Karcher's full post is available here.

Keeping with this theme, on October 1, Street & Smith's Sports Business Journal reported that CAA "has signed a long-term deal to represent the Yankees for sales and marketing as the team prepares to move into a new Yankee Stadium in 2009." Signing this new Yankees deal means that while one CAA agent, Casey Close, is representing shortstop Derek Jeter in his negotiations against the Yankees, others will represent the Yankees against third parties.

This newest representation leads me to wonder the following questions:

(1) Is it ever appropriate for a sports agency to represent both owners and players in the same sport?

(2) If so, are there any safeguards that could prevent the exchange of sensitive business information between members of the agency? (For example, are firewalls between player-representation divisions and team-representation divisions a feasible solution?)

(3) Should either federal or state governments regulate the sports-agent business by defining certain relationships as impermissible?

(4) Given that, pursuant to the NLRA, players associations delegate a share of their exclusive bargaining authority on behalf of the players to a list of certified sports agents, should players associations consider decertifying those agents that share profits with agents that represent ownership?

I am not sure if there are easy answers to any of these questions, but I hope this post leads to some debate.


Couldnt the fact be that CAA is so large that one department wouldnt go near another department?


P.S Mark I liked your other post also about Roger Clemens, in the other thread. I responded.

Anonymous Anonymous -- 10/03/2007 10:03 AM  

Great post, and excellent questions you raised. Unless the MLBPA authorized it, this is clearly a violation of the MLBPA's agent regulations, which prohibits an agent from "Being employed by, serving as an officer of, or representing, either directly or indirectly, Major League Baseball, the American or National Leagues, any Club or affiliated entity, or representing, either directly or indirectly, any management or supervisory level employee or official of them, without the prior written authorization of the MLBPA."

Regarding firewalls in this context, I think it can be done. But if a firewall is feasible within a large sports agency like CAA, why wouldn't a firewall also be feasible within the union if the union decided to hire agents to represent players in indvidual contract negotiations with the teams (in order to address the conflict between the collective and individual interests of the members)?

Blogger Rick Karcher -- 10/03/2007 10:39 AM  

This is one of the most problematic ethical and business issues that sports agents seem to gloss over. It is a particularly troublesome thing, especially when so many of these agencies also are controlled by or employ attorneys who may be called upon to do work for both of these constituencies. Such a situation plausibly leads to a conflict of interest that would violate the code of ethics in every jurisdiction with which I am familiar.

The bottom line issue is a profound lack of control on athlete agent activity from the regulation of recruiting through the performance of duties. Until that gap begins to close, there will be no meaningful solution. Unfortunately, it seems until someone suffers significant and public monetary loss, there will be no meaningful control.

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Anonymous Anonymous -- 10/24/2007 1:59 AM  

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