March 20, 2012

Copyright ©2012 by Josh Luchs ILLEGAL PROCEDURE: A Sports Agent Comes Clean on the Dirty Business of College Football by Josh Luchs and James Dale Reprinted by permission of Bloomsbury USA.

Agents advance money to players now. It's against the rules but it keeps happening, whether for need or greed or both. Why not do it aboveboard? With total transparency? Set up oversight and regulation. Establish interest rates, at or below market value. Provide standardized forms and loan agreements. Create a fair market system.

Here's how it could work:

1. Any certified agent who wishes to participate could register to lend money to athletes.

2. Interest rates would be set at or below market rates and published.

3. The agent and player would be allowed to meet openly and freely to discuss the amounts, terms, and details. The Junior Rule would be abolished to allow for this. (As an NCAA-sanctioned program, it would prevent underage or high school kids from participation, plus investing in very young players is at best a long shot considering how greatly abilities change during those years.) Once agent and player arrive at an agreement, they would meet regularly, which would enable the agent to parcel out the funds on a piecemeal basis, rather than in a lump sum, and therefore simultaneously establish an ongoing relationship with the player.

4. The agent and the marketplace would determine how much it would make sense to lend. If agent X determines that player Y is worth $10,000 a year -- that is, that the player will earn enough once signed to a pro contract to repay that amount -- then the agent can lend $10,000. If agent Z determines the player is worth more, say $15,000, then he can take the risk, like any lender, that the player will pay back more. It would truly be a free-market system.

5. Notices of agent-player agreements would be posted in locker rooms to end or minimize locker-room runners from wooing players for agents. Everyone would know who each player was working with.

STAPLES: Loan proposal makes sense

6. The transaction would be a true business deal, a loan. The player would owe the money to the agent. If and when the player signed a pro deal, he would begin to repay the money on pre-agreed terms. It would protect all of the parties in the transaction.

7. If the player's career did not pan out, if he were not drafted or signed, then the agent would have made a bad investment without recourse.

8. A player could openly switch agents if or when he determined that another agent offered him a better deal, or would simply be a better fit. Again, it would be the agent's choice, based on his assessment of market value, whether to lend more or less. And the new agent would assume the liability for the loans from the previous agent. Postings would be made of the switch.

9. The NCAA would retain paperwork on all transactions. And the NCAA would have access to agent phone and bank records, which they do not currently have, in order to track activities, movement of money, etc. This would allow for the equivalent of subpoena power for any requested documents; otherwise an agent would be immediately removed from participation in the loan program.

10. This would remove the NFLPA from all agent oversight other than certification of agents.

11. This system would be totally consistent with Title IX, often a stumbling block for new college sports legislation. Rather than favoring only the top sports, it could fuel any or all sports. If an agent determined that a soccer player could earn substantial money in the marketplace, he would be free to lend money to the soccer player. Or the hockey player. Or swimmer. Male and female athletes alike.

Agent loans would be a totally transparent program with advantages over the current system, or nonsystem. The process would be out in the open, under the scrutiny of anyone who wanted to see it, instead of being done clandestinely, in dark bars, or at parties, or through street runners. It would provide for payback of the money. It would not be a gift or a pay-off, but a business deal. The player would agree to take the money, pay the money back, and work with that agent when he declared for the draft. The money could be given in varying amounts dependent upon the need and status of the individual players. Market value would determine what a player could borrow. Market value can change as the player's performance and his ability to pay back changes when he turns pro. The agent would be taking the risk. The model does not provide one school an advantage in recruiting over another. It rewards the players. And players don't have to take money from questionable people. In fact, under this system, why would they take money from unsavory characters? Everyone would know who is lending and who is borrowing.

Why would the colleges go for it? Well, for one thing, there is already precedent for it. Players can now borrow against future earnings to buy disability insurance while playing in college. But most importantly, this new system of loans wouldn't cost the colleges a dime. The money involved would be separate from the revenue the schools now take in from the sale of seats, jerseys, and bowl-game TV rights and adamantly do not want to give up or share. This would be the agents' money.

Will it happen? Doubtful in the short run. Some may view it as taking money from the bad guys. In fact, it's a dose of reality. It's already going on. But instead of doing it in the shadows, this would do it openly, legitimately, with a system, rules, and oversight. It could work. And what we have now does not work. That's one thing everyone can agree on.

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