[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
               SPORTS AGENT RESPONSIBILITY AND TRUST ACT

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   COMMERCIAL AND ADMINISTRATIVE LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                                   ON

                                H.R. 361

                               __________

                              MAY 15, 2003

                               __________

                             Serial No. 17

                               __________

         Printed for the use of the Committee on the Judiciary


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                   COMMITTEE ON THE JUDICIARY

            F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois              JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina         HOWARD L. BERMAN, California
LAMAR SMITH, Texas                   RICK BOUCHER, Virginia
ELTON GALLEGLY, California           JERROLD NADLER, New York
BOB GOODLATTE, Virginia              ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
WILLIAM L. JENKINS, Tennessee        ZOE LOFGREN, California
CHRIS CANNON, Utah                   SHEILA JACKSON LEE, Texas
SPENCER BACHUS, Alabama              MAXINE WATERS, California
JOHN N. HOSTETTLER, Indiana          MARTIN T. MEEHAN, Massachusetts
MARK GREEN, Wisconsin                WILLIAM D. DELAHUNT, Massachusetts
RIC KELLER, Florida                  ROBERT WEXLER, Florida
MELISSA A. HART, Pennsylvania        TAMMY BALDWIN, Wisconsin
JEFF FLAKE, Arizona                  ANTHONY D. WEINER, New York
MIKE PENCE, Indiana                  ADAM B. SCHIFF, California
J. RANDY FORBES, Virginia            LINDA T. SANCHEZ, California
STEVE KING, Iowa
JOHN R. CARTER, Texas
TOM FEENEY, Florida
MARSHA BLACKBURN, Tennessee

             Philip G. Kiko, Chief of Staff-General Counsel
               Perry H. Apelbaum, Minority Chief Counsel
                                 ------                                

           Subcommittee on Commercial and Administrative Law

                      CHRIS CANNON, Utah Chairman

HOWARD COBLE, North Carolina         MELVIN L. WATT, North Carolina
JEFF FLAKE, Arizona                  JERROLD NADLER, New York
JOHN R. CARTER, Texas                TAMMY BALDWIN, Wisconsin
MARSHA BLACKBURN, Tennessee          WILLIAM D. DELAHUNT, Massachusetts
STEVE CHABOT, Ohio                   ANTHONY D. WEINER, New York
TOM FEENEY, Florida

                  Raymond V. Smietanka, Chief Counsel

                        Susan A. Jensen, Counsel

                        Diane K. Taylor, Counsel

                  James Daley, Full Committee Counsel

                   Stephanie Moore, Minority Counsel




                            C O N T E N T S

                              ----------                              

                              MAY 15, 2003

                           OPENING STATEMENT

                                                                   Page
The Honorable Chris Cannon, a Representative in Congress From the 
  State of Utah, and Chairman, Subcommittee on Commercial and 
  Administrative Law.............................................     1

                               WITNESSES

Honorable Tom Osborne, a Representative in Congress From the 
  State of Nebraska
  Oral Testimony.................................................     3
  Prepared Statement.............................................     6
Honorable Bart Gordon, a Representative in Congress From the 
  State of Tennessee
  Oral Testimony.................................................     7
  Prepared Statement.............................................     9
Mr. Scott Boras, Owner/President of the Scott Boras Corporation
  Oral Testimony.................................................    10
  Prepared Statement.............................................    12

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of William Saum, Director of Agent, Gambling, 
  and Amateur Activities, National Collegiate Athletic 
  Association....................................................    13


                      SPORTS AGENT RESPONSIBILITY 
                             AND TRUST ACT

                              ----------                              


                         THURSDAY, MAY 15, 2003

                  House of Representatives,
                         Subcommittee on Commercial
                            and Administrative Law,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 1:05 p.m., in 
Room 2141, Rayburn House Office Building, Hon. Chris Cannon 
(Chairman of the Subcommittee) presiding.
    Mr. Cannon. The Committee will come to order. We are 
gathered here today for a hearing on H.R. 361, the ``Sports 
Agent Responsibility and Trust Act.'' I would find it hard to 
believe that anyone in this room today has not been moved in 
some way by athletics in their lives, whether it is eagerly 
awaiting the tip-off of game seven of the NBA finals, gathering 
together with friends and family in anticipation of the kickoff 
of the Super Bowl, or cheering the likes of Mark McGwire and 
Barry Bonds in their quest to set home run history. I suspect 
everybody in this room has done all those things and more.
    Sports touches all of us. It is a unique form of 
entertainment, athletic appreciation, and geographic pride. We 
sit in front of our televisions, we make trips to the stadiums, 
we even approach those we may not know very well with the 
comfortable oft-used phrase: ``Did you catch the game last 
night?'' But there is a business and personal side that can 
often be not quite as entertaining, usually with very real and 
sometimes sad results.
    The multi-million dollar value of professional athletes' 
salaries, signing bonuses, and endorsement contracts has 
resulted in a proliferation of questionable ethical practices 
by some sports agents more concerned with lining their pockets 
than the welfare of those they are supposed to represent. These 
people are willing to break the rules in order to sign 
promising student athletes to representational contracts. They 
are willing to do this because the fees that accompany the 
representation of a professional athlete are considerable, and 
the agent will risk little consequence in comparison to the 
athlete or the school.
    Motivated largely by financial gain, agents have gone to 
extreme measures to represent promising student athletes with 
even a remote chance of becoming a professional athlete. The 
reality that a college athlete will succeed professionally is 
highly speculative. It has been estimated that an NCAA athlete 
has no more than a 1 percent chance of making a professional 
team even in a backup role. These agents or their cohorts, 
often known as runners, will use tactics, including secret 
payments to the athlete, undisclosed payments to the family or 
friends of the athlete who may be in a position to influence 
him or her, unrealistic promises, and even pressuring the 
athlete through intimidation and threats. In some cases, these 
agents have made secret payments to student athletes or their 
families, and then blackmailed them into signing a contract 
with the threat that they would disclose the violation of 
collegiate rules, thus jeopardizing the student's competitive 
eligibility. These acts go unpunished due to disparate, 
ineffective or, in some cases, a complete absence of State 
laws.
    A student athlete entering into an oral or written agency 
contract generally forfeits collegiate eligibility. The college 
or university may be subject to various sanctions for violation 
of competition rules if contests were played with ineligible 
athletes. If this occurs, the economic impact on the school and 
the athlete can be substantial. Not only can a student athlete 
lose a scholarship, the university can be sanctioned with 
monetary penalties, loss of scholarships, forfeiture of 
contests, and loss of television revenues.
    Currently, there is no Federal law that directly addresses 
the actions of these agents, although a majority of the States 
do regulate in varying degrees athlete, agents, and/or their 
conduct. Most recently, the National Conference of 
Commissioners on Uniform State Laws passed the Uniform 
Athlete's Agent Act addressing the conduct, practices, and 
registration of athlete agents. H.R. 361 will provide remedies 
for student athletes and the educational institutions, 
particularly in those States with no existing law addressing 
athlete-agent conduct.
    I appreciate the fact that we have our Ranking Member Mr. 
Watt here with us today, and I am assured that many of our 
colleagues on this Subcommittee will be here before we finish 
this hearing.
    It is my pleasure to welcome those who are with us today to 
testify regarding the subject matter of today's hearing. Each 
brings a unique perspective and a wealth of knowledge to this 
body.
    As Dean of the Tennessee delegation, Congressman Bart 
Gordon is currently serving his tenth term in Congress. 
Congressman Gordon serves on the House Energy and Commerce 
Committee and on the Science Committee, where he is the second 
Ranking Democrat, is the Ranking on the Subcommittee on Space 
and Aeronautics. He also serves on two Subcommittees in Energy 
and Commerce, Health and Telecommunications and the Internet.
    Educated in Rutherford County Public Schools, Congressman 
Gordon graduated with honors from Middle Tennessee State 
University in 1971. He served in the Army Reserves from 1971 to 
1972 and received an honorable discharge in 1972. Gordon went 
on to receive his law degree from the University of Tennessee 
School of Law in Knoxville. The Murfreesboro lawmaker is 
married to Leslie Peyton Gordon, and the two have a daughter, 
Peyton Margaret Gordon.
    As author of H.R. 361, we appreciate his presence and the 
testimony to be offered today.
    Mr. Osborne became a Member of the United States House of 
Representatives on January 3, 2001. Congressman Tom Osborne 
sits on the Committees on Agriculture, Education and the 
Workforce, and Resources. From 1972 until 1997, Representative 
Osborne served as the head football coach of the University of 
Nebraska Cornhuskers. Representative Osborne retired as the 
most winning active football coach in the NCAA Division 1-A. 
Prior to retiring, Congressman Osborne led the Huskers to three 
national championships in 1994, 1995, and 1997, thereby 
becoming a household name. Congressman Osborne and Mrs. Osborne 
have three children, Mike Osborne, Ann Wilke, and Susie Dobbs, 
as well as four grandchildren.
    The author of several books, including More than Winning 
and Faith in the Game, Congressman Osborne graduated with a 
B.A. in history from Hastings College in 1959. Following 
graduation, he played three seasons in the National Football 
League. He earned an M.A. in educational psychology from the 
University of Nebraska, Lincoln, in 1963, and a doctorate in 
educational psychology from the University of Nebraska-Lincoln 
in 1975.
    Congressman Osborne has a concurrent markup going on with 
this hearing, and so we are going to ask him to testify first 
and then move to Congressman Gordon. And then we will hear from 
Scott Boras, who is the owner and president of Scott Boras 
Corporation. Among his clients are such superstars and 
potential Hall of Famers as Greg Maddox, Kevin Brown, Barry 
Bonds, Alex Rodriguez, and Kevin Millwood, who just last week 
pitched a successful no-hitter for the first time in his 
career.
    Mr. Boras has become a leader in his field, negotiating the 
first 50 million, 100 million, and $200 million contracts in 
major league baseball history. Would you like to come into 
politics, sir? Just kidding. As well as negotiating the largest 
athlete contract in the history of professional sports. In 
2002, the Sporting News recognized Mr. Boras as one of the 100 
most powerful people in sports and was the most highly ranked 
athlete representative in all sports.
    Mr. Boras played with the St. Louis Cardinals and Chicago 
Cubs organizations in the mid-1970's, after which he returned 
to law school at the University of the Pacific McGeorge School 
of Law. The Scott Boras firm provides legal counseling to 
amateur athletes. In addition, the agency also provides legal 
athlete representation and contract negotiations services for 
numerous professional baseball players. Mr. Boras is also the 
owner of Impact Sports Marketing and Agency, which secures and 
negotiates contracts for endorsements, personal appearances, 
equipment, and baseball cards.
    In addition, William Saum, Director of Agent, Gambling, and 
Amateur Activities for the National Collegiate Athletic 
Association will be appearing through written testimony only.
    Again, thank you for coming to today's hearing, and Mr. 
Osborne, you are recognized for 5 minutes.

  STATEMENT OF THE HONORABLE TOM OSBORNE, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEBRASKA

    Mr. Osborne. Thank you, Mr. Chairman, Ranking Member Watt, 
Members of the Committee, and also Congressman Gordon and Scott 
Boras. I am really pleased to have a chance to be able to speak 
to you about H.R. 361 today.
    I would like to recognize the fact that Congressman Gordon 
has worked on this for a long time, and so I have joined him 
recently in the last couple of years and appreciate his 
leadership on this issue. My comments are going to be directed 
primarily to the world of football, because that is what I 
understood best. There is certainly a lot of agents in other 
sports.
    I would say the reasons that we need this legislation are 
several, and the first that I would mention is that the 
financial incentives for agents and for athletes have become 
huge. If you are a first-round draft pick in the National 
Football League, the average amount of money, bonus and salary, 
that you could expect to receive in the first year would be $8 
to $9 million. So the going rate for many agents is about 3 
percent, so that is $250,000 if you represent a high draft 
pick, and the amount of time required is not huge. You could 
represent theoretically eight or nine or 10 first-round picks, 
which would add up to some fairly large money. So we think that 
the money is big.
    Secondly, it is important to realize that the National 
Football League certifies each year about 1,200 agents. These 
agents are required to be certified in order to represent a 
player who has already made the National Football League. So 
these would be players going in their second, third, fourth, 
fifth year. If you are coming out of college, you don't need to 
be certified by anyone. All you have to do is say you are an 
agent, and if you say you are one, you are one. You have no 
qualifications at all.
    So we have 1,200 agents certified by the NFL, probably 
another 3 or 400 that aren't certified. And the difficulty is 
that there are only about 400 of those agents who represent 
anybody. So roughly three-fourths of the agents out there don't 
represent anybody in the National Football League. So there is 
tremendous competition to have access to an athlete.
    So if you are not very competent and if you have no 
background or any expertise, what you often do is go after an 
undergraduate player, because the reputable agents normally 
will not do that.
    So they will go to great lengths. And so if you check with 
your players, you will find out most of them have unlisted 
numbers because the agents start badgering them. They will go 
see them in the dorm even as early as their freshmen and 
sophomore years. So this makes it very difficult as far as 
education is concerned.
    Of course, there are a great many illegal inducements that 
are offered. Sometimes it is money, sometimes it is a car, 
sometimes it is clothes, sometimes it is trips, and 
occasionally it even gets into drugs and women and the whole 
nine yards. So it is a fairly seamy business. It is not very 
attractive.
    Oftimes what these people will do, with an undergraduate 
particularly, is to offer an agency contract which obligates 
the player, and many times they will couch it in terms as 
though we will post date the contract, it really doesn't mean 
anything, it is not going to affect your eligibility. But when 
you sign that contract, even when it is post dated, your 
eligibility is gone. If anybody finds out about it, if the NCAA 
finds out about it, it is gone. So that is one thing that they 
often do.
    Probably the most common issue that I have run into that is 
really misleading is that they will promise a player that he 
will be a higher draft pick. So you called in the National 
Football League, and they have a Committee that will tell you 
how high a player is going to be drafted. And they say, well, 
so and so is going to be in the third round. And the agent will 
invariably say, well, that is a lot of hogwash, they are just 
trying to keep you in school. I will make you a first-round 
pick if you will come with me, and I am going to get you a 
personal trainer, I am going to get you a nutritionist. We are 
going to take you to California and we are going to have you 
prepared, and you are going to go up in that draft because you 
are going to go and test so well at the combine that you are 
going to be a first-round pick.
    Well, actually, nobody can make a player better in the 
draft. You know, that is a false promise. But it is what a lot 
of players want to hear, so obviously they buy into it. And a 
lot of them will invariably leave school. They may have 3 hours 
left to graduate. They will bail out, and they will go follow 
some agent somewhere. And of course that is a problem.
    Also, we find that many of these agents will promise to 
handle the contract, they will handle taxes, they will handle 
endorsements, and also they will ask for power of attorney. And 
so we have some cases of people who are 35 years old all of a 
sudden find that their career is over and they have no money. 
One-half of the players leaving the National Football League 
have no money. Sometimes it is their own fault, sometimes it is 
the problem with the individual agents.
    I am probably going to have to hustle here. Let me just 
give you three examples of some cases that impacted us very 
greatly. I went out to--we are getting ready to go to the 
Orange Bowl one night, and I can't find my starting 
quarterback. I find him sitting between two agents who have got 
him over in the corner of a hotel lobby, and we are 2 hours 
from kickoff. And these guys are hammering him. And of course 
none of these guys have any credentials at all.
    Another guy we had signed in the 1980's, and buried in his 
contract was 13 percent. Normally it would be 2 or 3 percent. 
So he had to pay 13 percent in his contract. Fortunately, that 
particular agent was from California that did have some laws 
governing agents, and as a result we were able to prosecute and 
get $300,000 back for that individual.
    The last thing I will mention very quickly. We had a player 
who took a trip to California and we began to hear about it. It 
didn't sound good. He was talking about meeting Patty LaBelle 
and somebody else who was a TV star. And so I--there was guy 
named Lloyd Bloom, who his name came up. And I called Lloyd, 
and I said, ``Look, is this guy involved with you?'' And Lloyd 
said, ``Oh, no. No. We would never do anything to jeopardize 
his eligibility.'' Well, it turned out that we were sure that 
he had taken a trip, it was unauthorized, and so we declared 
him ineligible. He had one more year, and he probably would 
have been a first-round draft pick. So this guy lost his 
eligibility, and eventually Lloyd Bloom and Norby Walters went 
to prison, as did Tank Black and some others.
    But, anyway, those are some of the examples of things that 
happen.
    So, anyway, I know Congressman Gordon can fill you in on 
the details. But we think this is absolutely necessary that we 
have this type of legislation, and we appreciate your 
consideration of the legislation.
    [The prepared statement of Mr. Osborne follows:]
 Prepared Statement of the Honorable Tom Osborne, a Representative in 
                  Congress From the State of Nebraska
    Thank you Chairman Cannon, Ranking Member Watt, and Members of the 
Committee. I appreciate the opportunity to come and speak with you 
today about legislation that Representative Bart Gordon and I have 
introduced. As you may know, I feel strongly about H.R. 361, the Sports 
Agent Responsibility and Trust Act, or SPARTA, and am thankful for the 
committee's consideration of this important legislation.
    While the notorious cases of Norby Walters, Lloyd Bloom and Tank 
Black have shed some light on deceptive sports agents, we still allow 
unethical sports agents to prey upon hundreds of college athletes on 
campuses across this country each year. During my 36 years as a 
football coach, I was deeply concerned by overly aggressive, unethical 
sports agents who knowingly compromised a student-athlete's eligibility 
or took financial advantage of student-athletes and their families. 
With the lure of big money involved in professional sports, I 
experienced first-hand the difficulty in trying to keep agents and 
their runners from attempting to illegally recruit my players with cash 
and gifts. In pursuit of the hefty fees that are associated with 
representing professional athletes, sports agents often engage in 
unethical behavior that undermines the integrity of college sports.
    When sports agents engage in this type of impermissible behavior, 
their actions undermine the integrity of college sports and threaten 
the athlete's college experience. By accepting anything of value from 
an agent, a student-athlete loses his eligibility and scholarship, the 
school faces sanctions, the reputation of the institution is tarnished, 
and the sports agent walks away with absolutely no consequences for his 
actions.
    If a sports agent provides inducements to a student-athlete and 
therefore breaks NCAA rules, the student-athlete loses his eligibility 
to compete in collegiate competitions, and often times loses his 
scholarship. For many of these collegiate athletes enticed into 
forfeiting eligibility, the loss of eligibility means the loss of a 
college education if they cannot afford to pay their own way. In 
addition to facing sanctions they may not expect, these athletes often 
times damage promising professional careers. When a sports agent 
promises student-athletes fame and fortune--or a first-round draft 
selection--a focus on superstardom and wealth may prevent them from 
considering the consequences of signing away their NCAA eligibility.
    In the 1980s, one of my players was offered some illegal 
inducements, and in turn lost his eligibility, which for the most part 
ruined his career. This particular player was involved with agents who 
had already given illegal inducements to players across the country. 
Eventually, these agents were indicted on a number of felonies, leading 
them to go as far as threatening some of the players with bodily harm. 
At the time, however, we lacked the laws to pursue these agents in the 
State of Nebraska, and these loopholes still exist today.
    Unscrupulous agents often take advantage of students who have 
little or no experience in contract negotiations, potentially causing 
financial harm for student-athletes, their teams, and their respective 
schools. On a personal note, I had a player back in the 1980s that 
thought he signed a contract giving 3 percent of his earnings to the 
agent, but somewhere buried in the contract was a much larger figure of 
13 percent of his earnings, causing him to lose thousands of dollars. 
Fortunately, this player was able to recover more than $300,000 under 
California state law where this agent originated. In my home state of 
Nebraska, however, we did not have the laws to go after this agent.
    Schools also stand to lose financially from the deceptive actions 
of sports agents. If a student-athlete loses his eligibility because he 
accepted inducements from an agent, and his ineligibility is not 
disclosed to the school and the ineligible student is allowed to 
compete in violation of the rules, that school may face a number of 
sanctions, including suspensions, fines, the potential loss of post-
season play and revenue that this might represent.
    When student-athletes lose their eligibility by entering into an 
agency contract with unethical agents, intercollegiate athletics 
suffers because of the negative perception that is often associated 
with this type of activity. In recent years, the number of incidents 
where student-athletes were persuaded by unscrupulous agents to accept 
payment or other consideration in exchange for exclusive representation 
has created a negative perception that threatens the integrity of 
college athletics and the educational institution involved. While 
colleges and universities rarely do anything wrong in these situations, 
the mere fact that their student-athlete entered into such an agent 
contract reflects negatively on the school.
    Why is this legislation necessary? As of April 2002, the National 
Football League Players Association reported that there were 1,196 
certified football agents, almost double the number from 10 years ago. 
But, more than 800 of these agents have no clients. Hundreds of these 
so-called ``agents'' lack both certification and qualification. 
Unethical sports agents, often motivated purely by greed, will use any 
means necessary to represent a student-athlete who has even a remote 
chance of playing professional sports.
    As of April 25, 2003, seventeen states in our country, including my 
home state of Nebraska, had no regulations governing the conduct of 
sports agents, while many other states have a patchwork of vague and 
differing agent regulations. Until all 50 states adopt the same 
standards for regulating sports agents, there will be no uniformity in 
the laws governing sports agents. SPARTA would provide a minimum 
federal backstop for regulating sports agent conduct, while at the same 
time respecting tough state laws.
    SPARTA would make it unlawful for an agent to give false or 
misleading information or make false promises or representations in 
order to entice a student-athlete into signing an agency contract. This 
legislation would also make it unlawful for an agent to fail to 
disclose to the student in writing before signing a contract that the 
student may lose his eligibility to compete in collegiate athletics. 
SPARTA requires sports agents and student-athletes to notify the 
school's athletic director within 72 hours--or before the student-
athlete's next sporting event--of signing an agency contract. This 
legislation is needed in order to protect our student-athletes from 
unscrupulous sports agents.
    The bottom line is most student-athletes do not make it in 
professional sports. But, they may have been enticed to leave school 
early only later to realize that their agents acted solely for their 
own financial benefit, with no concern for the athletes' future. Over 
36 years of coaching, I saw too many student-athletes taken advantage 
of by sports agents looking out for their own bottom lines. I firmly 
believe we need to treat sports agents who lie, cheat and deceive, as 
we would treat any other businessperson who promises the world but 
delivers only heartache.
    Thank you again for the opportunity to be here today to offer my 
thoughts about this important legislation.

    Mr. Cannon. Thank you, Mr. Osborne. I think that we don't 
have the pressure of a vote; we have about 13 minutes left. I 
am inclined, Mr. Gordon, if you would like to go ahead and 
testify, then we expect, Mr. Osborne, that you will rejoin us. 
You are certainly welcome, Bart, to come back if you would 
like. And Mr. Boras, if you wouldn't mind, I think this is 
going to be a quick vote, and we can come back. So why don't 
you go ahead with your 5 minutes, Mr. Gordon?

  STATEMENT OF THE HONORABLE BART GORDON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF TENNESSEE

    Mr. Gordon. Thank you, Chairman Cannon, Ranking Member 
Watt, and Members of the Committee. And also many thanks to my 
friend Tom Osborne for bringing his expertise and help into 
this bill.
    Chairman Cannon, you basically gave my opening statement in 
your opening statement, so I will just ask that my statement be 
made a part of the record, and I will try to be mercifully 
brief since I think that we have something of a consensus here.
    I first became interested in this issue really in 1996, 
when a friend of mine at home who was a former NFL as well as 
college coach started telling me about the real problems that 
they are having, and with the escalation in money since that 
time they have only gotten worse and younger in that this is 
into the high schools, and even with some gymnasts even younger 
than that.
    Mr. Osborne went through a lot of the horror stories, so I 
won't go into that much more other than to say that the real 
problem now is not as much the agents as their runners. I mean, 
they go so far as to have walk-ons go on the football teams to 
get to know some of the star players so they then can get to 
know them better and entice them in some way later on. And what 
we are trying to do here is stop really a win situation and a 
lose for everybody else but the agents. Right now, if some kid 
takes a gold chain, a suit of clothes, a trip or something by 
an agent or by one of their runners, then that athlete loses 
his scholarship, loses his eligibility. The school is penalized 
even though they have done everything they can to try to stop 
it. And the kid, since he loses his scholarship, he is out. The 
agent is the winner. Nothing happens to him. But now the kid 
can't play ball anymore, and so he winds up going ahead and 
signing. He or she.
    And what we are trying to do is make those agents obviously 
more accountable. And we want to try to do this by not setting 
up a Federal, you know, police force for athletics, but rather 
we are going to be deputizing the State Attorney Generals, 
allowing them to use current unfair and deceptive practices 
through the FTC, and this way we can really allow the States to 
move forward.
    Now, some States already have legislation, but it is not 
uniform. You have a situation where North Carolina doesn't have 
anything, so you can have a kid that could be playing at the 
University of Tennessee where we do have a State law but they 
are from North Carolina, so when you go down in North Carolina 
they get you, or if they go up and play Boston College, there 
is not a law in Massachusetts, they can get you there.
    So what we do is make it an unfair and deceptive practice 
by a sports agent or a runner giving false or misleading 
information or promises to an athlete, providing anything of 
value to a student or anyone associated with those students, 
fail to disclose in writing to students that they can lose 
their eligibility to play college sports if they sign with an 
agent. Also, to pre-date or post-date a contract. Additionally, 
they are required to notify the school if a kid signs, so that 
the school then won't mistakenly play him in a game somewhere 
and wind up being penalized.
    As I say, this is about as consensus as you can get. This 
bill has been endorsed by the NCAA, the National Association of 
Collegiate Directors of Athletics, the Black Coaches 
Association, the National Association of Basketball Coaches, 
the American Football Coaches Association, the National Junior 
College Athletic Association, the Knight Foundation 
Commissioner on Intercollegiate Activities, and a growing list 
of coaches, Tubby Smith to Joe Paterno. So this really has been 
vetted and I think presents a good approach.
    It also does not hinder any State that wants to take their 
legislation further. These are not criminal penalties; these 
are civil penalties. If the State wants to do more, they can.
    Also, I want to thank my staff, Dana Lichtenberg, for all 
the time she has put in on this by building these coalitions. 
You have done a good job, Dana. Thank you for your help.
    And I will yield back my time.
    [The prepared statement of Mr. Gordon follows:]
 Prepared Statement of the Honorable Bart Gordon, a Representative in 
                  Congress From the State of Tennessee
    Thank you Chairman Cannon, Ranking Member Watt and Members of the 
Committee. I appreciate the opportunity to come and speak with you 
today about H.R. 361, the Sports Agent Responsibility and Trust Act.
    I have been working on the problem of predatory sports agents since 
1996 when a friend and constituent of mine, Coach Ken Shipp, came to 
see me about the need for a uniform federal law to protect kids from 
unscrupulous sports agents.
    The agent problem has only grown since 1996. Agents hoping to cash 
in on the next NFL or NBA star will stop at nothing to convince a 
student-athlete with even a remote chance of playing professional 
sports to drop out of school and go pro early. Agents offer athletes 
cash, cars and clothing. They pay runners to curry favor with star 
athletes. They secretly pay off their friends and offer jobs to their 
family members who are in a position to influence the athlete. 
Sometimes physical threats are involved.
    Agents know it's against NCAA rules for kids to sign with an agent 
and still compete in college sports. It's also against NCAA rules and 
many state laws for them to bribe a student-athlete. Yet agents, would-
be agents and their runners continue to aggressively pursue student-
athletes with little regard for their future or the school's athletic 
program.
    That's because unscrupulous agents know they face little or no 
consequences under most state laws for enticing student-athletes with 
lies and gifts, even though these actions may cost student-athletes 
their scholarships, and may result in significant fines and penalties 
for the schools. If these practices are illegal in the student's home 
state, it is easy enough to contact student-athletes when they are in a 
state with no sports agent law.
    Efforts are underway on the state level to create a comprehensive 
uniform licencing process for sports agents. However, the Uniform 
Athlete Agent Act (UAAA) has been passed in only 21 states.
    Rep. Osborne and I introduced H.R. 361 to address this interstate 
problem head on. It is intended to work hand in hand with state law by 
creating a basic uniform federal standard for sports agent conduct vis 
a vis student-athletes without preempting stronger state laws. This 
will stop sports agents from using the 29 states with weak or no sports 
agent laws as safe havens to prey on student-athletes.
    SPARTA would make it an unfair and deceptive business practice for 
a sports agent to give false or misleading information or make false or 
misleading promises or representations; provide anything of value to 
students or anyone associated with these students; fail to disclose in 
writing to students that they may lose their eligibility to play 
college sports if they sign an agency contract; or predate or postdate 
contracts.
    In addition, the bill requires sports agents to immediately notify 
a student-athlete's school in writing when an athlete agrees to an 
agency contract so the athlete is not unknowingly played in a game, and 
subjecting the school to sanctions and disqualifications.
    The bill deputizes state attorneys general to prosecute violators 
in federal district court on behalf of the FTC. In addition, schools 
would be given the right to sue to recoup damages caused by the illegal 
recruiting activities of a sports agent.
    The pressures on student-athletes in college are tremendous. I 
believe we have a responsibility to educate our student-athletes and 
protect them from unscrupulous sports agents whose bottom line is their 
own financial gain. This legislation will send a loud signal to 
``rotten apple'' agents that they will be held accountable for 
unethical recruiting practices.
    SPARTA is supported by the NCAA, National Association of Collegiate 
Directors of Athletics, Black Coaches Association, National Association 
of Basketball Coaches, American Football Coaches Association, National 
Junior College Athletic Association, the Knight Foundation Commission 
on Intercollegiate Athletics, and a growing list of coaches including 
Tubby Smith of the University of Kentucky, Joe Paterno of Penn State 
University and R.C. Slocum of Texas A&M.
    Thank you again Chairman Cannon, Ranking Member Watt. and Members 
of the Committee for the opportunity to speak to you today about this 
very important issue.

    Mr. Cannon. Thank you, Mr. Gordon. The Chair would now like 
to recognize that Mr. Delahunt has joined us from 
Massachusetts, Mr. Coble from North Carolina, who has another 
hearing or a markup at the same time, Mr. Flake from Arizona, 
Mr. Carter from Texas, Mr. Chabot from Ohio.
    And Mr. Boras, if you wouldn't mind, you are sort of an 
attractive witness, and I think if we leave you until after the 
vote, we will get everybody back so we get this marked up and 
move on. And with that, the Chair will recess for a 15-minute 
period to handle this vote.
    Let me remind all Members of the Committee we need you back 
here for the markup. This markup should not take long, so 
please.
    [Recess.]
    Mr. Cannon. We are going to call this hearing back to 
order. Thank you. We do expect several Members of the Committee 
to join us. But in the meantime, Mr. Boras, if you would like 
to give us your testimony, we are anxious to hear it.

         STATEMENT OF SCOTT BORAS, OWNER/PRESIDENT OF 
                  THE SCOTT BORAS CORPORATION

    Mr. Boras. Thank you, Chairman Cannon and Ranking Member 
Watt and Members of the Committee. This is something that is 
very close to heart for me because of my personal experiences 
being a professional athlete and being recruited to a college 
and being really a student athlete that has gone through the 
system and watching how the system has changed from when I 
processed through it as an athlete to the current system that 
we see in the 1990's and 2000.
    The field of sports agency I think is one that has resulted 
in a different field, depending on the sports. In football and 
basketball you have identifiable named players that are coming 
out of primarily college that are going to be of immediate 
benefit to professional franchises. As a result of that, you 
have an immediate benefit that then would result to the sports 
agents. A sports agency by its nature is that the fee is only 
gained when the student athlete becomes a professional. Sports 
teams are only improved if they gain under contract the 
athlete's skills.
    So when we have the relationship of university, sports 
agent, and professional team, the interplay of the three is 
something that creates the dynamic of concern. Pro sport teams 
I noticed have been undressed in the process of what we have 
begun to undertake, which I think primarily is the concern for 
the student athlete; is that we really want to make sure that 
the student athlete makes an informed decision, that the 
student athlete has the appropriate information to enter 
professional sports if he so chooses knowing the risk. 
Professional sports teams--and I know of none in any sport--
ever publish or provide to universities or to student athletes 
the risk of professional sport. How many players in any sport 
spend 6 years or 3 years? What is the average earned income? 
And none of those teams provide that information to anyone. It 
is an undisclosed fact, it is a hidden risk. And it is 
something that, if that information was provided and if there 
was cooperation from the professional sports teams, I think 
that the university officials, I think the sports agents and 
their contacts to suggest that the overpromotion of the 
athlete, to suggest that will be a great major league player or 
professional football player or basketball player, once those 
numbers are revealed by the league and the universities have 
them, then we can begin the information and education process.
    The student athlete needs information. The NCAA rules state 
that an athlete cannot have a sports agent but he is allowed to 
have legal counsel. One of my concerns--and I support this bill 
greatly--the sports agency industry has absolutely no methods--
we have heard from the panel and Congressman Osborne and 
Congressman Gordon that there is no criteria, there is no 
qualifications. So where do we go to make sure the student 
athlete is aware of the needed qualifications and what type of 
system do we mandate?
    In a bill, I think that when universities are given the 
access to sanction and damages, certainly there should be 
requirements that--the universities also benefit from student 
athletes, and there should be requirements by the universities 
to provide information to these student athletes. Panels. For 
example, when I went to Georgia Tech to see Kevin Brown, 
Georgia Tech University had an agent review committee, and they 
may have interviewed, I don't know, 70, 80 agents and examined 
their qualifications, their experience. And so Kevin Brown got 
an opportunity to--he was not interfaced with agents directly. 
The university had a system by which there was a review panel 
and they were able to really provide a scrutiny so that the 
athlete was protected, and, through that process, learned of 
the qualifications needed to be properly advised in a 
professional career.
    Many universities have--while they certainly, I think, want 
to have great athletic programs, and go to great lengths to 
recruit athletes--and I think we have heard a lot about how 
sports agents recruit athletes. Let us not forget how 
universities recruit athletes. And part and parcel of that 
process, and if we want to really devise a bill that considers 
what the needs of the student athlete are, certainly the 
university is an educational institution and it can do a great 
job of having classes, panels, methods of getting information 
to the athletes of the knowledge of this bill itself and of the 
knowledge of who out there in the world is qualified to provide 
information to the student athlete.
    Pro sport teams, colleges, high schools open their arms to 
them. They have access to the campuses, they have the ability 
to talk to the student athletes, they have the ability to reach 
out to them. This is a level of recruitment. When we hear about 
what agents do, I want to point out that if you become a 
professional athlete, you understand that everyone wants your 
services and your skills. And pro sport teams are trying to 
acquire you at the lowest cost. Consequently, pro sport teams 
do not want athletes to attend college. It provides a leverage 
point for them. It provides something where that athlete is not 
under control by that team. It also provides the fact that the 
athlete may improve in college, and therefore increase the 
acquisition cost by the professional team.
    The bill should also include some mechanism by the 
universities where pro sport teams are required to report 
contact to the student athlete. Because remember, the student 
athlete's belief about their success in professional sports 
doesn't alone come from sport agents; it comes from the scouts 
and people in professional sports who are trying to lure that 
athlete away from college sometimes earlier than graduation to 
pursue a professional sports career, because what you pay a 
rookie is a lot less than what you pay a seasoned veteran. And, 
consequently, if you can get a great athlete as a rookie, it 
lowers the cost of operation to the professional sports team.
    So in looking at a bill--and while this is a tremendous 
first step, I think that we have to really consider the dynamic 
and prioritize that the student athlete needs to be protected. 
We are talking about 18, 19, 20-year-old young men who are 
walking into a system. You are given a scholarship, you go to 
college, and all of a sudden the pro world is opened up to you, 
and now where do I go. If education is the measurement of the 
university, and we know that a career development is part of 
the university program, when you invite great athletes to your 
campus, you should also have as a part of the athletic 
department programs which certify, qualify representatives and 
give the athlete knowledge of his future career, which may be 
in pro sports.
    Secondarily----
    Mr. Cannon. Mr. Boras.
    Mr. Boras. Yes.
    Mr. Cannon. Your time has expired. If you could wrap up 
fairly quickly, we will then go to questioning.
    Mr. Boras. I will. Thank you, Mr. Cannon. Nothing new about 
a sports agent talking too much.
    Finally, I think the bill is a wonderful first step. We are 
finally putting some credence to the process. The bill creates 
a cause of action for the university. It allows the recovery of 
damages. I think it should be required that allocation of those 
damages to the university should at minimum provide scholarship 
to the student athlete from which the damages arose.
    Secondarily, they should consider a private right of action 
for the student athlete in the bill itself in addition to the 
private right of action for the university.
    Thirdly, I think that we should provide something in the 
bill that requires the universities who benefit from the 
sanctioning power and the damage action to also control the 
conduct of professional teams.
    Thank you.
    [The prepared statement of Mr. Boras follows:]
                   Prepared Statement of Scott Boras
    To Mr. Chairman Cannon, Ranking Member Watt and members of the 
Committee:
    I am a former college and professional baseball player. After 
finishing my pro career, I attended law school. During that time, my 
former professional teammates approached me to serve as their baseball 
attorney. My law practice grew and I began providing legal advice to 
high school and amateur baseball players.
    In my 20 years as a baseball attorney, my company has strongly 
encouraged 99 percent of our athletes--including potential first-round 
draft picks--to attend college. Our research provided to colleges and 
universities shows that less than 1 percent of the student-athletes go 
on to have a 6-year pro career. Our college recommendation is unpopular 
with professional baseball franchises that want the student-athletes to 
turn pro.
    The unfortunate part of sports agency is that because agents' fees 
are gained only when a student-athlete signs a professional contract, 
many agents encourage the athlete to skip college and pursue a pro 
career. Thus, because we promote college, we concur that the Sports 
Agent Responsibility and Trust Act is needed to regulate agents who are 
following their own interests as opposed to the student-athletes.
    Although H.R. 361 creates a cause of action and remedy for the 
university, Federal Trade Commission remedy and state attorney general 
remedy, paramount attention should be directed to providing relief for 
the student-athlete. The bill should be amended to create a cause of 
action and remedy for student-athletes if agents damage them.
    Student-athletes and their families rarely understand the 
complexity of the NCAA and professional sports rules. In most 
instances, athletes are only left with the information that is given to 
them by a university or outside counsel. The decision whether to forgo 
a college scholarship and pursue a professional career requires 
sophisticated analysis and legal counsel. Any bill drafted to insure 
attendance and completion of a college education should promote the use 
of legal counsel to assist the student-athlete in making a fully 
informed decision. In its present state, the bill does not distinguish 
between a sports agent whose relationship has one intended direction 
for the student-athlete and that of an attorney, who is mandated to 
serve the best interest of the student-athlete.
    While H.R. 361 is the first step to protect student-athletes from 
inappropriate conduct by sports agents, the conduct of professional 
sports teams also needs to be monitored. Team representatives are 
invited to visit high school and college campuses. They draft and sign 
the players. And yet, the teams are not accountable.
    This bill should include a provision requiring pro sports 
franchises to report to the NCAA their meetings and discussions with 
student-athletes, and which agents they've had contact with. The 
conduct of a pro sports franchise should be subject to the same 
scrutiny as that of a sports agent.
    The bill should include a meaningful remedy for a student-athlete 
who is damaged by inappropriate agent conduct. The bill should require 
agents to hold up to a million dollar bond or proof of net worth in 
that amount. If the agent relies on net worth, then any damage award 
against the agent should be a non-dischargeable debt.
    Additionally, the bill should authorize the athlete to recover up 
to one million dollars in damages from an agent whose conduct results 
in termination of the athlete's collegiate eligibility or loss of 
scholarship.
    If the athlete has a significant remedy, the agent would be unable 
to count on the athlete's secrecy in the agent's wrongdoing. This 
remedy would be an effective deterrent to unauthorized oral and written 
agreements between the student-athlete and agent.
    To conclude, student-athletes who have the ability to perform at 
the college or professional level have decisions and opportunities that 
most students do not face upon entering college. This bill represents a 
major step in regulating how academic institutions, sports franchises, 
and sports agents interact with the student-athlete. Currently, the 
student-athlete suffers due to the absence of a uniform state or 
federal regulation that oversees the interaction of these three 
entities. This bill will help in the resolution and creation of a 
responsible approach to the advancement of our coveted student-athletes 
through the academic and professional system.

    [The prepared statement of Mr. Saum follows:]
                 Prepared Statement of William S. Saum
    I appreciate the opportunity to provide written comments on behalf 
of the National Collegiate Athletic Association (NCAA) and to express 
our support for H.R. 361, the Sports Agent Responsibility and Trust Act 
(SPARTA). The NCAA is a tax-exempt, unincorporated association of 
approximately 1,260 colleges, universities, athletics conferences and 
related organizations devoted to the regulation and promotion of 
intercollegiate athletics for male and female student-athletes.
    As director of agent, gambling and amateurism activities, and a 
former campus administrator and coach, I am acutely aware of the impact 
that unscrupulous athlete agents can have on the lives of college 
student-athletes. In today's society, professional athletes are highly 
compensated and most have agents that perform valuable services. 
Unfortunately, the illicit practices of some of these agents, would-be 
agents and their runners have caused serious problems for student-
athletes and educational institutions as these agents aggressively 
pursue the substantial fees that accompany the representation of 
professional athletes. These agents, motivated largely by financial 
considerations, are willing to use any means necessary to represent a 
student-athlete who has even a remote chance of playing professional 
sports. They frequently employ tactics that involve secret payments or 
gifts (goods, autos, cash, clothing) to the athlete, undisclosed 
payments to friends and relatives who may be in a position to influence 
the athlete, unrealistic promises and considerable arm-twisting.
    There can be significant damage that results from these 
impermissible and oftentimes illegal practices. Impermissible benefits 
provided by agents violate NCAA rules and may result in the following: 
student-athlete ineligibility for participation in NCAA competition, 
harsh penalties on the team and the university (including the 
imposition of NCAA sanctions that have resulted in the repayment of 
monies received from NCAA championship competition, forfeiture of 
contests and other penalties.)
    The SPARTA would make it unlawful for an agent to give false or 
misleading information or make false or misleading promises or 
representations; provide anything of value to students or any 
individuals associated with these students; fail to disclose in writing 
to students that they may lose their eligibility to compete as student-
athletes if they sign an agency contract; or to predate or postdate 
contracts. All of these activities are necessary to protect our 
student-athletes from unscrupulous agents.
    In addition, the NCAA strongly supports Section 7 of SPARTA that 
recommends states pass the Uniform Athlete Agent Act. The adoption of 
the state model bill creates a comprehensive, uniform registration 
process that will provide important consumer information for student-
athletes, parents and institutions, as they will have access to the 
detailed information contained in the agent application. Currently, the 
Uniform Athlete Agent Act (UAAA) has been passed in 21 jurisdictions, 
and 12 additional jurisdictions have introduced the Act into their 
state legislatures. We plan to work hard in the coming year to get it 
passed in many more states.
    The NCAA has developed an arsenal of educational information on 
athlete agents, including videos that raise the awareness about agents 
and NCAA regulations, an NCAA information packet and a list of 
questions that student-athletes should ask agents. Also, an important 
brochure entitled ``A Career in Professional Athletics'' is available 
to member schools.
    The NCAA's agent, gambling and amateurism activities staff works 
closely with high school athletes, member institutions and even agent 
groups, through the professional players associations. In short, we 
want to educate student-athletes, athletics administrators and agents, 
prevent violations of NCAA regulations, and enforce the current agent 
rules.
    Our member institutions have developed a variety of programs to 
achieve these results. Several schools conduct agent days where a 
student-athlete can meet with an agent in an organized and monitored 
manner. Many of our schools also conduct educational seminars for their 
elite athletes, which include alumni who have participated at the 
professional level. These alumni provide first-hand experiences from 
which enrolled athletes can learn. Finally, our schools provide a panel 
of experts (Pro Sports Counseling Panel) for athletes to visit with 
regarding the search for an agent.
    The SPARTA, in conjunction with the UAAA in all 50 states, will 
provide important and necessary steps to address the problem of 
unscrupulous athlete agents. The NCAA plans to continue its strong 
efforts and use its resources to pass the UAAA in the remaining states.

    Mr. Cannon. Thank you, Mr. Boras.
    Mr. Watt, do you have questions?
    Mr. Watt. Thank you, Mr. Chairman. I think I will be brief. 
I hope I will.
    I am a cosponsor of this legislation. But it is always 
easier to be a cosponsor of a piece of legislation that has 
kind of high-powered, high-minded sounding purposes than it is 
to take the consideration of that legislation seriously and do 
the job that we are here to do. And one of the concerns I had 
as a Member of the Judiciary Committee I think I have satisfied 
myself about, but I will give Representative Gordon a chance to 
talk about it just a little bit. And that is the concern that 
there is a Federal interest here that we are furthering. And 
the way you seem to have done that is you have defined some 
conduct that seems to be unfair, and you have made it in effect 
an unfair and deceptive trade practice under the Federal Trade 
Commission Act. That presumes that there is some overriding 
Federal purpose here that we are trying to achieve. And just 
talk to me about that aspect of it a little bit.
    Mr. Gordon. Well, I think it is certainly again unfair and 
deceptive to approach these young athletes with bad information 
as it would be to try to sell an automobile or anything else. 
So I think you have the same type of Federal interest.
    This was what you might call sort of the lowest impact type 
of approach. We wanted to try to do this in a way where we 
weren't setting up, again, a Federal sports police, trying to 
use existing vehicles to accomplish our goal, and this seemed 
to be the easiest way to do it.
    Mr. Watt. Is there a notice that you have and a provision 
for an action by the Commission and an action by States and 
Attorney Generals and ultimately an action by educational 
institutions, which I want to ask you a question about also. 
But I presume under the unfair and deceptive trade practices 
statute of the Federal Trade Commission Act, there is also a 
private right of action. Is there not, or is there?
    Mr. Gordon. I would not think so. No.
    Mr. Watt. Why wouldn't that be the first recourse that we 
would be talking about providing?
    Mr. Gordon. Well, again, you are talking about----
    Mr. Watt. First and foremost, it is the athlete that gets 
injured. I understand the State's interest, I understand the 
Commission's interest. I think I understand the educational 
institution's interest, although I may have some reservations 
about giving them an independent right of action. But why 
wouldn't the student athlete and/or his guardian or family be 
the first in line to have a private right of action?
    Mr. Gordon. Well, as a practical matter, you are still 
dealing with 18, 19, 20-year-olds, many of which are coming 
from an already fairly desperate economic situation, that 
probably also doesn't have either experience or a comfort maybe 
level in the court system, and that it would seem that it would 
be better to, again, through using your State Attorney Generals 
they would be more comfortable taking this action. And as a 
practical matter, what happens here--and I have to take some 
disagreement in terms of the universities' role. I think the 
universities have a very big role here, and all the coaches 
that I have talked to have made it very clear to me that they 
spend a lot of time trying to inform their athletes about these 
type of problems. And so you really have got a built-in 
situation where you have got the universities that are trying 
to look after the athletes, who then can go to the Attorney 
General that already has a vehicle to take quick action. And 
that was sort of the process that we set up, rather than 
leaving it just to an individual, who wouldn't be familiar and 
may be even uncomfortable with this type of action.
    Mr. Watt. Okay. I guess I have some reservations about is 
there any cause of action that the individual independently has 
who gets really taken advantage of by an agent?
    Mr. Gordon. You know, potentially through contract law in 
the individual States you might be able to. And, again, this is 
somewhat of an umbrella to give uniformity across the country. 
And individual States, some have criminal penalties and some, 
you know, go much further than this. So I think the States 
would be able to do it in that regard.
    Mr. Watt. All right. I will yield back in the interest of 
time.
    Mr. Gordon. You know, and I am not sure--you asked a good 
question and I am sorry I don't have a complete answer; I can 
get you more. But I am not even sure that we would have 
jurisdiction to give that personal----
    Mr. Watt. Well, an individual, unfair and deceptive trade 
practice, I mean, the harm is actually to the individual in 
addition to the public harm that we assume goes with an unfair 
and deceptive trade practice. The most direct harm is to the 
individual. And if there is a Federal interest in doing it on 
the global level, I would think there would be a Federal 
interest in giving some cause of action to the individual 
student athlete who has the most direct injury, much more 
direct than either the Commission, the Attorney General, who is 
supposed to protect the public's interest through the State, or 
the university's interest, all of whom have an interest. But I 
guess I assume that the individual had a private cause of 
action under the Unfair and Deceptive Trade Practices Act, and 
apparently that is not the case.
    So we will take a closer look at that. I am not saying that 
that is necessarily a good idea. I kind of started with the 
assumption that there was a private cause of action, and that 
was--I am glad we clarified it at least.
    Mr. Gordon. That is why we have hearings, to bring in more 
thought and look at these issues a different way. That was 
something that really didn't occur earlier.
    Mr. Watt. I yield back.
    Mr. Cannon. Thank you, Mr. Watt. Inasmuch as we have a 
markup left, does anyone to my right have a burning desire to 
ask questions?
    Mr. Gordon. I would point out, I see that my neighbor Mrs. 
Blackburn is here. I guess you were probably your first term in 
the Tennessee State Senate when the Tennessee equivalent of 
this bill came forward.
    Mrs. Blackburn. I think that you are correct, and I think 
that that was handled by----
    Mr. Gordon. Mr. Womack.
    Mrs. Blackburn. Mr. Womack. Thank you. I was struggling for 
his name there. But yes, he always did a good job with the 
higher education and secondary education issues. And thank you 
for your good work on this.
    Mr. Cannon. Mr. Feeney, would you like to----
    Mr. Feeney. Yes, Mr. Chairman, just briefly. A couple 
questions. And it occurs to me that Mr. Watt from North 
Carolina is maybe correct, that the student has an interest 
here. And perhaps, Mr. Watt, what we may want to do is take a 
look at putting a provision in the bill at some point perhaps 
allowing the athlete to void the contract within a period of 
time, say 2 or 3 years, and require the agent to disgorge him 
or herself of any profits that were gained from the illicit 
activity. At a minimum, that would allow the athlete to protect 
him or herself.
    Mr. Watt. If the gentleman would yield. I am not sure that 
would go as far as I would want to go. If he still has lost his 
eligibility, he has lost--you know, he has been damaged far in 
excess of just the ability to void a contract, I think. So, but 
we can talk about that further.
    Mr. Feeney. At a minimum, that might be something we could 
move toward.
    But I guess I would ask Mr. Boras, because student athletes 
have other legal needs at times other than a formal agent to 
negotiate a percentage clause of a deal, and I guess I would 
ask, how do we delineate--you have used the term ``agency 
contract.'' but, for example, supposing a student athlete is 
anticipating some new-found wealth or may be already wealthy 
and is talking to attorneys about estate planning or insurance 
needs, supposing that I happen to be fortunate enough to be 
dating the best female collegiate golfer in school and she 
decides that she wants to, before we get married, enter into a 
prenuptial contract, how are we going to make sure that we are 
getting and precluding the activity that we want to preclude 
without making it difficult for attorneys to render competent 
advice and counsel to student athletes?
    Mr. Boras. I think one of the reasons that we are here 
today and discussing this bill is the very delineation between 
licensed, qualified and, maybe more importantly, bonded and 
held to fiduciary responsibilities by State and, you know, 
National Bar Association rules. The NCAA has drafted rules. If 
you look at them, the overriding view of college coaches and of 
the athletes themselves is that someone who is an expert in a 
sport field, who also is an attorney, however you want to label 
him, he is an agent. So don't--stay completely away.
    I come in contact with the big issue of high school 
athletes who are drafted annually by major league baseball 
teams. The percentage of high school athletes that make it to 
the major leagues for 6 years is .0025 percent. The teams draft 
them because every now and then they get a superstar that 
becomes an Alex Rodriguez. But the reality of it is, is that 
this is bad medicine. Now, we have told teams this; we show 
them the data, we give the data to the families. The scouts of 
the teams go to the families and say, don't talk to them, they 
are agents, you are going to lose your eligibility. So, 
whenever these bills are drafted--and the first thing that I 
saw was, we need to clearly delineate and distinguish between 
use of an attorney. And I must tell you that an athlete--
negotiating with a major, with a professional team is something 
that an athlete definitely needs economic and legal counsel on, 
without a doubt. And he needs legal counsel on a number of 
other areas. But the confusion that pro teams promote is--and 
sometimes colleges promote is that use of legal counsel is akin 
to an agent, it is illegal, it will get you in trouble. And I 
think responsible drafting and further education of coaches and 
universities, I think will help to allow the student athlete to 
know what directions he can go, with the fine line being an 
attorney who is an agent is acting as an attorney provided he 
doesn't do the one thing, and that is negotiate with a 
professional franchise.
    Mr. Feeney. Thank you.
    I yield back, Mr. Chairman.
    Mr. Cannon. Thank you, Mr. Feeney.
    I want to thank the panel. We appreciate the testimony. It 
has been very clear, very concise, and we appreciate--and 
particularly, Mr. Boras, your comments on what we might do in 
further legislation with colleges. We will view that as it 
comes up.
    Again, thank you very much for being here now. You are free 
to depart if you wish. We are going to go forward and mark up 
this bill.
    So thank you very much.
    [Whereupon, at 2 p.m., the Subcommittee was adjourned.]

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