I. Introduction
2003 Wisconsin Act 150, the (“Act”) is legislation based upon model legislation drafted and approved by the National Conference of Commissioners on Uniform State Laws. (“NCCUSL”) The Act addresses problems with the athlete/athlete agent relationship such as; secret payments or gifts to athletes, undisclosed payments or gifts to friends and relatives, unrealistic promises and “considerable” arm-twisting.
II. Effect on Existing State Law.
Prior to the passage and signing of the Act, Wisconsin did not regulate athlete agents or their activities in this state.
a. Definitions.
The Act defines an “Athlete agent” as an individual who enters into an agency contract with a student athlete or recruits or solicits to enter or represents to the public that the individual is an athlete agent.
The definition excludes spouses, certain family members, or individuals acting solely on behalf of a professional sports team or professional sports organization. Also excluded is an individual, who provides information to a student athlete, but does not recruit or solicit the student athlete to enter into an agency contract.
b. A person must generally be registered in Wisconsin to act as an agent.
An agent cannot act as an athlete agent without being registered, except that an individual may act as an athlete agent in Wisconsin for all purposes except signing an agency contract if:
1) the student athlete or person on behalf of the student athlete initiates communication with the individual, and;
2) within 7 days after an “initial act” as an agent such as an effort to recruit or solicit a student athlete to enter into an agency contract, the individual applies for registration as an athlete agent in Wisconsin.
c. Agent registration requirements and disclosures.
Certain disclosures must be made in the application for registration, such as the applicant’s training as an agent, practical experience, educational background, references, employer information, and judicial determinations against the applicant regarding any misrepresentations and any disciplinary actions or sanctions arising out of professional conduct.
The Department of Regulation and Licensing may refuse to issue a registration if it determines the applicant has “engaged in conduct that has a significant adverse effect on the applicant’s fitness to act as an athlete agent.”
d. Void agency contracts.
An agency contract resulting from conduct in violation of the athlete agent registration requirements is void and the athlete agent must return any consideration received under the contract.
e. Required agency contract terms.
The Act specifies terms that must be contained in an agency contract with a student athlete which include:
1) the amount and method of calculating consideration,
2) a description of expenses that the athlete will reimburse, and;
3) a description of the services to be provided.
f. Required agency contract warning.
The contract must contain the warning of a student athlete’s rights and duties in “close proximity” to the signature of the student athlete. These include:
1) the student may lose eligibility by signing the contract;
2) if the student has an athletic director, within 72 hours after entering into the contract, both the student and the agent must notify that athletic director;
3) the student athlete has a 14 day cancellation right after signing, and;
4) cancellation may not reinstate eligibility.
g. Notice to educational institutions.
The Act requires that the athletic director of the educational institution at which the student is enrolled be notified by the agent and the student within 72 hours of the signing of the contract or before the next scheduled athletic event in which the student athlete may participate, whichever occurs first.
The agent must also provide notice to the athletic director of an educational institution which the agent has reasonable grounds to believe the student athlete intends to enroll.
h. Prohibited athlete agent practices.
The Act prohibits specific agent practices. Violations create criminal and civil liability.
These prohibited practices include:
1) inducing a student athlete to enter an agency contract by materially false or misleading information, promises or representations;
2) furnishing anything of value by the agent to the student athlete before the student athlete enters into the agency contract;
3) furnishing anything of value to any individual other than the student athlete or another registered athlete agent;
4) initiating contact with a student athlete unless registered,
5) refusing or failing to retain or permit inspection of the records required by the Act,
6) failing to register as required by the Act,
7) providing materially false or misleading information in an application for registration or renewal;
8) predating or postdating an agency contract;
9) failing to notify a student athlete before the student athlete signs or otherwise authenticates an agency contract for a particular sport that the signing or authentication may make the student athlete ineligible to participate as a student athlete in that sport.
i. Criminal penalties.
The criminal penalties that can apply for a violation of the Act are a $10,000 fine per violation or 9 months imprisonment or both.
j. Civil remedies.
The civil remedies provided are in favor of educational institutions only. The athlete agent is liable for damages caused by a violation of the Act, which include monetary damages, costs and attorneys fees.
k. Administrative forfeiture.
The administrative forfeiture that can apply for a violation of the Act is not more than $25,000 per violation.
l. Student athlete liability.
The Act does not create statutory civil or criminal liability for the student athlete for a violation of the Act.
III. Legislative Action in Previous Session
The Act has previously been drafted in the 2001-2002 session of the legislature as LRB 3241/4 but was not introduced.
IV. For additional information contact
Office of Legal Counsel
Department of Regulation and Licensing
608-267-1803
