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Saturday, July 04, 2009
 
Stephon Marbury Uses Players' Association to represent him as Free Agent

Rick has written extensively about the benefits of players' associations retaining the capacity to negotiate contracts on behalf of individual players--meaning that players use the players' association, instead of an agent or agency, to negotiate employment contracts with teams.

Boston Celtics' free agent guard Stephon Marbury has decided to use National Basketball Players Association' deputy counsel Hal Biagas to represent him this off-season. Last season, Biagas negotiated Marbury's buyout with the Knicks (a subject discussed earlier this year at the Yale Law School Sports Litigation Panel which Biagas, Alan Milstein, and I and others were on).

Marbury's reasoning, as told to Marc Spears of the Boston Globe, is straightforward: “The best thing about the NBPA is that they work for you for free. When you have a team that negotiates the Collective Bargaining Agreement for all the players representing you, there is strength in numbers.’’

Although Marbury is a rather unique personality, perhaps other players might turn to the NBPA for representation. After-all, players' have a financial incentive to do so: while an NBA agent typically receives a 4% commission on a player contract, the player can keep that money if he uses the NBPA instead. So if Marbury signs for $2 million with, say, the Washington Wizards, he'll keep the $80,000 that would have been paid to his agent; Biagas and the NBPA won't get a commission. $80,000 is not an insignificant chunk of change, even for an NBA player.

Then again, NBA agents might argue that they are in a better position to zealously represent players, since their interests are only with the player and not with the collective entity of players (i.e., the NBPA). Of course, when an agent represents more than one player, particularly multiple players on the same team who are seeking the same salary cap space, a player might question the zeal behind his agent's representation. Along those lines, it's likely difficult for a successful agent to avoid all possible conflicts of interest in his/her representation, meaning the distinction between NBPA representation and agent representation may not always be so stark.





10 Comments:

Kudos to Stephan, maybe he read Karcher's law review articles!

Anonymous Anonymous -- 7/04/2009 3:06 PM  


Smart move by Stephon, but if this becomes a trend who is to say the NBAPA will be acting in the best interest of athletes, especially the younger ones best financial interests.

Blogger EJ Alford -- 7/05/2009 8:37 PM  


It can work for an individual player or a small group of players...but it does not work for the collective...or a large number. Players are unique and each have unique interests. The Players Associations are not equipped to handle these unique interests for a wide variety of individuals. Furthermore, the conflicts as mentioned are real and it would not be in the Associations best interest to have a multitude of players potentially questioning their motives and decisions in helping guide their careers. I belive that those who espouse this theory have likely never worked for a professional athlete before. I say that with all do respect to Rick, but professional athletes are a different breed by nature and to lump them together for purposes of negotiating their individual player contracts would be suicide for any indiviual union.

Anonymous Anonymous -- 7/06/2009 1:18 PM  


I think that the whole agent system needs to be reorganized, but I’m not sure that letting the players associations take the lead is the best solution.

While an agent certainly can have a conflict while representing more than one athlete, who is the PA's chief concern? The individual player or the the group of players as a whole?

If it is the individual player, then wouldn't each negotiation for higher compensation be contrary to the interest of the other individual players? After all, there are only so many $$$ available (or perhaps we are waiting for a bail out to pay higher salaries...)

If the PA is supposed to look after the interest of the group as a whole, then can it effectively represent the interest of the individual player? Again, there are only so many $$$ to go around.

This being said, the current system is far from perfect.

A hypo for anyone that is interested in weighing in:
An agent (who is also an attorney) negotiates a contract for a major star and takes the 4% commission. Assuming we are talking about a major contract, is it a reasonable fee for an attorney to charge in a contract negotiation based on the time spent and compensation received? The agent is presumably still bound by the rules of professional responsibility
right?

Blogger Jimmy H -- 7/09/2009 1:33 PM  


Jimmy,

You raise a good point about the conflict of interest issue, which I address in my article that Michael linked to in his post, but I think that concern may be overblown. If anything, it's probably more a perceived conflict than an actual conflict.

But to the extent it is a problem, doesn't that same problem currently exist with the major agencies that dominate in a particular sport, including representing multiple players at the same positions, and even more so, when they are up for free agency in the same year?

In any event, there is no compelling reason why it shouldn't at least be an option for players to choose -- let them decide if it works or not. Nobody would suggest it should be mandatory that unions represent all players in individual contract negotiations --The players certainly wouldn't agree to that, nor should they!

Blogger Rick Karcher -- 7/09/2009 2:24 PM  


What do you all think of Marbury looking to play overseas now? Is he being represented by the NBPA/Biagas in his overseas negotiation? Are opportunities in "competing" leagues (leagues other than the NBA) an issue for the union as representation for the entire league model.

Blogger NBASalCap -- 7/09/2009 9:02 PM  


I don't know if Biagas is representing Marbury in overseas negotiations. But even if he is, I don't see why it presents a problem. The union does not act as representative of the "entire league model." Under the labor laws it is the exclusive representative of the players regarding employment matters with the NBA, meaning that no other entity or person can represent them regarding employment matters with the NBA unless authorized by the union. However, this does not mean that the union is not permitted to represent players in other matters, legal, financial or otherwise, including negotiating a contract on behalf of a player with a team from another league.

As far as a conflict is concerned, I don't see how the union/Biagas would be compromising the best interests of other players if Marbury negotiates and/or signs with a competing league. If anything, one could argue that competition from other leagues is good because it drives up player salaries.

Blogger Rick Karcher -- 7/10/2009 8:35 AM  


Rick,

I disagree emphatically with your contention that the conflicts may be overblown. Any agent will tell you that players are EXTREMELY sensitive when it comes to the negotiation of their individual contracts, as they should be. Players have a finite window of opportunity to maximize their financial interests. Think about the amount of player mobility when it comes to hiring and firing their respective agents. Players do this for a variety of reasons. One of the main reasons why players fire agents is because of a percieved lack of individual interest in them as a person and client, i.e. players don't think you are "working hard enough for them as an individual." Furthermore, one point that I think you miss, is the fact that negotiating a contract is only one aspect (albeit the most important) of representing a player. What about securing a players services with a club/team? Who does that? Who pushes or markets a player to the teams? Do you think that players are going to understand and be amenable to the union making decisions on what players and teams are a good fit? How can you do this without real conflict in a free agent pool when you are talking about finite dollars and opportunity? And what about the many players that struggle to even find jobs?

Anonymous Anonymous -- 7/10/2009 7:53 PM  


Anon 7:53,

Are you an agent perhaps?
All kidding aside, I think in some instances the union could adequately represent a player. A known player that has already created a market for himself could reasonably expect the union to effectively negotiate a contract. In Rick’s defense, I think some of the above posts already speak to the issues you point out. Nobody is saying that agents should be replaced by the union negotiators, simply that it should not be ruled out as a viable option. If a player is struggling to find a job, he will pay the higher commission and go with an agent who will aggressively market him. The flipside is that players who are struggling to get a spot will probably not have access the best agents either…

Rick,

I’m not so sure that the conflict I raised earlier is more perceived than actual. That being said, I would also reason that an agent representing two similar players would have a conflict. It is simply up to the player to decide if he wishes to accept the conflict and trust that the negotiator (agent or union rep) will zealously represent that player’s individual interest.

And to go a bit off topic:
I think that the more important conflict to consider is the agent-attorney. Are you an agent first, attorney second? A few professional conduct issues to consider: Unreasonable fees (Rule 1.5), conflict of interest when representing other players, and solicitation (Rule 7.3). While it may be commonly accepted that the agent-attorney is held to a lesser standard when performing duties as an agent, I would argue the opposite. The agent that uses his credentials as an attorney to bolster his status as an agent should be held to a higher standard. But that is probably a discussion for another day and another topic…

Blogger Jimmy H -- 7/10/2009 9:52 PM  


Jimmy,

This conflict issue is a fascinating topic, and one that I have spun around in my head numerous times. It is an extremely complex issue that involves multiple areas of law, including labor law, rules of professional responsibility governing lawyers, common law agency principles, and each union's agent regulations. There are also various types of conflicts. Business conflicts are not the same as legal conflicts, and within those two categories there are perceived and actual (both direct and indirect) conflicts. Like most complicated legal questions, it doesn't lend itself well to a blog discussion (which is partly why I've decided to substantially reduce my blogging time this year).

Regarding your last comment, keep in mind that although non-attorney agents are not bound by lawyer professional conduct rules (i.e. rules regarding reasonable fees and solicitation), they are bound by common law agency/fiduciary duty laws that require agents to avoid conflicts of interest (which is not all that different from a lawyer's duty).

Blogger Rick Karcher -- 7/11/2009 7:13 AM  


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