News & Publications

Nov 14th, 2019

Pay to Play — What Ramifications Does the NCAA Decision Have on the Representation of College Athletes From a Florida Attorney’s Standpoint?

By James M. Paul, Shutts & Bowen, LLP

On  October 29, 2019, the National Collegiate Athletic Association’s (“NCAA”) top decision makers voted unanimously to start the process of modifying its long existing rule of not allowing college athletes to profit off their names, images, and likeness. The NCAA will now allow college athletes to profit from their names, images, and likeness “in a manner consistent with the collegiate model.” This was a far different stance from the stance taken by the NCAA, just less than thirty days earlier, when the NCAA deviated from its criticism of California’s “Fair Pay to Play Act.” The NCAA in response to California’s proposal, which was signed into law by California Governor, Gavin Newsom on September 30, 2019, but will not take effect until 2023, called the Act an “existential threat” to college sports and even threatened to “annex” California from the NCAA.

Why the sudden “change of heart” by the NCAA? Could it be that the NCAA felt pressure from state and federal governments forcing action? Such action has come from two of the biggest states for collegiate athletics – California and Florida – taking steps to eradicate the antiquated view that student athletes should not be able to profit from their names, images, and likeness. Not to be outdone by California’s foray into the right for players to earn compensation for their names, images, and likeness, Florida’s Governor Ron Desantis on October 24, 2019 stated he will use his authority to pass legislation in 2020 to allow collegiate athletes to make money from their names, images, and likeness. Florida House Bill 251 (“HB 251”), unlike California’s Fair Pay to Play Act, does not have an effective date.

A closer look at both the California and Florida bills, reveals that each bill does not force colleges or universities to compensate a collegiate athlete for simply playing for their respective college or university, rather both bills create an avenue where athletes can be paid by allowing them the ability to sell the rights to their names, images, or likeness to another person. For example, a quarterback from a Football Bowl Subdivision (“FBS”) located in the State of California, starting in 2023 can authorize an apparel company to sell apparel with the quarterback’s face on it, or endorse a particular brand of shoes or a particular soft drink. One of the biggest caveats of the California and Florida bill allows for either state licensed athlete agents or state licensed attorneys to represent these athletes in the negotiation of such deals. Section 67456(a)(2) and (a)(3) of the California Fair Pay to Play Act states in full:

Professional representation obtained by student athletes shall be from persons licensed by the state. Professional representation provided by athlete agents shall be by persons licensed pursuant to Chapter 2.5 (commencing with Section 18895) of Division 8 of the Business and Profession Code. Legal representation of student athletes shall be by attorneys licensed pursuant to Article 1 (commencing with section 6000) of Chapter 4 of the Division 3 of the Business and Professions Code.

Athlete agents representing student athletes shall comply with the federal Sports Agent Responsibility and Trust Act, established in Chapter 104 (commencing with Section 7801) of the Title 15 of the United States Code, in their relationship with student athletes.

 

Similarly, Florida’s HB 251, once signed into law, would allow for collegiate athletes to be represented by both state licensed athlete agents and state licensed attorneys in negotiations between collegiate athletes and potential endorsers. Section 1004.098(3)(b) and (3)(c) of Florida House Bill 251 states in full:

Professional representation obtained by a student athlete must be from persons licensed by the state. Notwithstanding s. 468.453(3), an athlete agent representing a student athlete for purposes of earning compensation as a result of the use of the student’s name, image, or likeness must be licensed by under part IX of chapter 468. An attorney representing a student athlete for purposes of earning compensation as a result of the use of the student’s name, image, or likeness must be licensed to practice in the state.

An athlete agent representing a student athlete shall comply with the federal Sports Agent Responsibility and Trust Act in Chapter 104 (commencing with s. 7801) of Title 15 U.S.C. in their relationship with the Student.

However, what both the Florida bill and the California law do not address is the ethical duty of a licensed attorney, who now with the future passage of HB 251, wants to procure a college athlete as a client.

As a licensed attorney practicing within the State of Florida, and duly licensed as a certified contract advisor with the National Football League’s Players Association (“NFLPA”), I will address the ethical concerns that could arise with Section 1004.098(3)(b) of HB 251. As a Florida licensed attorney I am governed by the ABA Model Rules of Professional Conduct (“ABA Rule”), specifically, I am governed by ABA Rule 7.3, which states: “A lawyer shall not in-person, live telephone or real-time electronic contact solicit professional employment when a significant motive for the lawyer doing so is the lawyer’s pecuniary gain.” However, as a licensed contract advisor with the NFLPA, I am not bound by ABA Rule 7.3 in the procurement of collegiate athletes who look to transition into the NFL. On the other hand, as a licensed attorney, I am bound by ABA Rule 7.3 if the same college athlete who is transitioning into the NFL needed legal advice on matters such as real estate, estate planning, family or criminal. The anticipated passage of Florida HB 251 in 2020, could lead to the proverbial flood gates, for licensed attorneys in the state looking to expand their “book of business” through the solicitation of collegiate athletes who seek to capitalize on their name, image and likeness. What measures will the Florida Bar put in place to prevent the solicitation of these collegiate athletes by licensed attorneys in Florida? What prevents a licensed attorney whose corporate client wants to sign a collegiate athlete to an endorsement deal, but requests that the attorney commence communication with the collegiate athlete in order to gauge a level of interest from the athlete?

The answers to these questions, just like most answers to lawyerly questions all reverts to: “it depends.” The reason why ABA Rule 7.3 is in place is to protect the public from potentially coercive, abusive type of sales pitches, which ironically enough, occurs more than not in the sports representation industry. Additionally, the policy behind ABA Rule 7.3 is aimed at

 

protecting the segment of the population that would be deemed vulnerable to a lawyer’s level of education, experience and sophistication. Notably, ABA Rule 7.3 protects accident victims, who are hospitalized after a traumatizing incident, who should not be the targets of an in person solicitation. However, licensed athlete agents, and more importantly, licensed attorneys may not view collegiate athletes as members of a vulnerable class. So what steps can a licensed attorney take to enter the “arena” of representing collegiate athletes who want to capitalize or their names, images, and likeness? As a start, a licensed attorney who specializes in intellectual property, trademark, copyright and licensing will have the background and skillset best equipped to deal with the legalese of the endorsements that a collegiate athlete could potentially garner from his or her name, image or likeness. Even with the above-stated background, ABA Rule 7.3 still prevents the direct solicitation of collegiate athletes.

One way to avoid the pitfalls of ABA Rule 7.3 is for a lawyer to recommend his or her services to an individual that is “family, [or has a] close personal or prior relationship with the lawyer.” Should the collegiate athlete be a family member of the licensed attorney, or if the collegiate athlete happens to be a former client from a prior legal relationship, then the attorney is justified in the solicitation. The challenge for attorneys in this “new market” for potential business with collegiate athletes will lie in the balance of how an attorney’s current practice lends itself to the procurement of new clients, whether through referrals, prior relationships or family ties. Whichever route the attorney takes to procure these clients, the Florida HB 251 and the NCAA’s decision to allow collegiate athletes to make money for their names, images, and likeness will create another specialized practice that savvy attorneys will be sure to capitalize on. The true test will be what those attorneys do to procure that business. Only time will tell.

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