Like serpents they infest the gardens and groves of American sport, poised to strike at the wealth professional athletes earn in such plenty. This, anyway, is the popular perception of sports agents, and it's a generalization based on a great many sordid and all-too-true particulars. Sports agents are amazingly numerous, and for the unscrupulous among them, the athlete is easy prey. Time was when the stereotypical agent was the gutsy character who took on the big bad owner and wrung from him his client's due. But as athletes started making hundreds of thousands of dollars, then millions, ethical agents watched helplessly as the self-serving, the incompetent and, indeed, the criminal debased the profession's image.
Such is the disgust that the new breed engenders that "sleazyagent" might as well be a single word. "Vipers," New York Giants general manager George Young calls them. Says Reggie Rogers, rookie defensive end for the Detroit Lions, "They're all bad—all agents." The word that comes to the lips of Jerry Vainisi, former general manager of the Chicago Bears, is "parasites."
Ed Hookstratten is a Beverly Hills entertainment lawyer who is also a sports agent, but he says, "I don't like to be lumped in and called a sports agent. I was the Rams' general counsel for eight years. What I saw come through the door representing the players was an embarrassment."
San Francisco attorney Ed King has made a lucrative practice out of suing agents and advisers who allegedly defraud athletes. He says with barely restrained glee that his specialty has real "growth potential." "If the worst you can say about one of them [agents] is that he's incompetent, that probably puts him among the top five percent in the sports business," says King.
October 18, 1987
For all the antiagent sentiment, the fact remains that few athletes nowadays are so bold—or foolhardy—as to venture into the world of sports commerce without an agent. Babe Ruth benefited from having an agent of sorts—a former sports cartoonist named Christy Walsh, who steered the Babe into annuities, enabling the ballplayer to weather the stock market crash of 1929. If such a conspicuous early example doesn't prove that agents can help, the issue was all but settled when latter-day negotiators like Bob Woolf and Jerry Kapstein took advantage of the infusion of big TV money, the establishment of rival basketball, football and hockey leagues and the advent of free agency in baseball to wrangle enormous salaries for their clients in the 1960s and '70s. In individual sports, agents have also fared well; witness the fortune that Gordon Baskin has made for track star Edwin Moses or, even more notably, that Mark McCormack's Cleveland-based International Management Group has made for his clients in golf, tennis and other sports.
As a group agents can be credited with redressing a historical imbalance. "A player who did not have much experience in the business world was completely outmanned in his negotiations with the general managers," says Tom Condon, an attorney-agent in Kansas City who played guard for the Chiefs for 11 years and was president of the NFL Players Association. Agent Leigh Steinberg puts the matter more bluntly: "The evolution of sports agentry stems from the abuse of players by management for many, many years."
Most athletes are understandably more comfortable letting agents negotiate their contracts. A good and trustworthy agent can reasonably be expected to get a better deal than the average athlete, especially the youngest and least savvy. "It allows a balance to remain in force," says Atlanta agent Evan Appel. "Unless an athlete has been in the league for five or 10 years, he's probably not going to be sophisticated enough to deal with management in negotiating."
Yet somewhere along the way the cavalry that rescued the athletes turned on them—or a good part of the cavalry did, anyway. "The reason we had to have agents in the first place was to protect the players from owners," says Harvard law professor Paul Weiler, a specialist in legal issues involving sports. "The problem we have now is how to protect the player from the agent. In a sense we've just pushed the problem back one stage."
The transgressions agents commit are most flagrant in team sports (in golf and tennis, they are somewhat more subtle, as we shall see). No longer do we listen in disbelief to tales of a superstar's descent into financial distress on skids greased by a go-go agent. If Kareem Abdul-Jabbar can lose a bundle—a very large bundle, it seems (page 89)—who's safe out there? A surprisingly large number of the most gifted athletes have fallen into webs of soap-operatic complexity, complete with hardship and desperate attempts at redress in the courts. Who among us could not feel some concern for Jack Clark of the Cardinals, who lost about $700,000 in two real estate deals in 1983 and '84 while he was still playing for the San Francisco Giants, and who reportedly had to ask his St. Louis teammates for money to help pay his rent? But at least in this case there was a happy ending. In '85 Clark and ex-Giants teammate Johnnie LeMaster, a partner in the real estate deals, won a lawsuit—King was one of their attorneys—they brought in U.S. District Court in San Francisco against five East Coast businessmen. They were awarded $1.94 million, Clark receiving $1.18 million and LeMaster $759,000.
The tales of financial distress among athlete-clients are, often as not, also tales of financial skulduggery by agents. The enduring symbol of the agent as culprit is Richard Sorkin, a former sportswriter who represented more than 50 NHL and NBA players in the early 1970s and squandered an estimated $1.2 million of his clients' money, much of it on his own gambling and stock market ventures. In '78 Sorkin went to prison after pleading guilty to grand larceny.
But as court suits pitting athletes against agents proliferate, the Sorkin scandal no longer seems so shocking. Now the sports world seemingly even has its own version of Jim and Tammy in the person of Dallas agent Joe Courrege, who won the trust of several Cowboy players through his devout Christianity. Courrege played religious tapes in his car while driving players around and arranged to have one of them, safety Bill Bates, appear as a guest on TV evangelist Pat Robertson's 700 Club. Last year Bates and three other players filed suit against Courrege for allegedly defrauding them of $200,000 through the use of fictitious names and bogus corporations in 14 real estate investments; Bates reached an out-of-court settlement with Courrege, but the suits of his three other former clients are pending. "What I found out is that he beats you over the head with his Bible and has his hands in your pocket at the same time," Dallas linebacker Jeff Rohrer, a plaintiff in one of those suits, told the Fort Worth Star-Telegram. Courrege has denied wrongdoing in all the cases.
At the root of many athletes' financial woes is the fact that agents are subject to few educational or professional requirements, only the vaguest ethical standards and a bare minimum of regulation.
As recently as a dozen years ago there were relatively few agents. Today there are thousands. In an effort to exercise a measure of control, the NFL Players Association requires agents who negotiate contracts for veterans to register for certification, which means they pay a $100 application fee and submit to a background check. The union has certified 700 agents, down from a high of 1,500 in 1983, and that doesn't include those who handle negotiations only for rookies and aren't obliged to register. The NFL, mind you, has only some 1,550 players. Similarly, the NBA has only 276 players, yet 208 agents have registered with its players association. Major league baseball is in the final stages of establishing a registration program. The ranks of agents are further swollen by those working hockey, golf, tennis, track and horse racing.
Even when they aren't doing anything as dramatic as thumbing their noses at pro owners by holding out star players or signing college undergraduates in violation of NCAA rules, agents have a knack for routinely rubbing others—the public, the press, management—the wrong way. Syd Thrift, general manager of the Pittsburgh Pirates, complains that agents "get to meddling, calling up and wanting to know why so-and-so isn't playing or isn't a starting pitcher instead of a reliever."
Some teams are wary of certain agents. In 1981 Detroit Tiger G.M. Jim Campbell traded Steve Kemp to the Chicago White Sox for Chet Lemon, in part, says Campbell, because the club had despaired of dealing with Kemp's agent, Dick Moss. Moss, the former executive counsel to the Major League Baseball Players Association, notes that Kemp was traded after twice beating the Tigers in arbitration. "Jim Campbell does not like to lose," Moss says. Former Montreal outfielder Jim Wohlford believes, though the team denies it, that the Montreal Expos refused to re-sign him last fall partly because Moss—who was then battling the club on behalf of free-agent outfielder Andre Dawson—was his agent. "He's not the most popular agent in baseball," says Wohlford, who is now training to be a stockbroker with E.F. Hutton in Visalia, Calif.
The trick is to find the right agent and, as the need arises, the right accountant and financial planner. (A big reason many athletes get into trouble is that they fail to realize that the man who works out the contract isn't necessarily the best choice for these other tasks.) Unfortunately, all too often the process of linking athletes to agents begins with the agents recruiting college athletes clandestinely and giving them money in disregard of NCAA rules. The prohibition against college athletes employing agents until their eligibility has expired has been repeatedly broken in dealings with football and basketball players. No case has been more flagrant than that of the agent team of Norby Walters and Lloyd Bloom, who paid thousands of dollars to sign several undergraduates before their eligibility expired (SI, Aug. 3). When the athlete is a willing, even eager, sometimes grasping, accomplice; when his most urgent financial goals are a house for his parents and a Porsche for himself; when life seems endless and his physical skills unshatterable—that's not the best foundation for a mature approach to long-term planning. Beyond that, one must wonder whether an agent who encourages an athlete to cheat by signing early might not be the sort who will cheat when handling that athlete's finances.
"As soon as you give a player money, you have corrupted the relationship," says agent Richard Woods of Mobile, Ala. "As opposed to your being the employee and the player the employer, which is how it's supposed to be, it's a creditor-debtor relationship."
Questionable recruiting practices go on outside college sports as well. In tennis, prospects in their early teens are plied with free equipment and promises of berths in senior-level tournaments. In baseball, agents sign up young minor leaguers to long-term, almost Faustian, deals; new rules adopted by the major league players' union and due to take effect next year are designed to correct such abuses. Where some agents entice blue-chip football and basketball players with money and cars, others offer to handle the minor league contracts of baseball prospects for free as a way of getting their hooks into them should they reach the majors. Latin players are particularly vulnerable to exploitation. Agents have gone to Latin America and signed promising youngsters to complex and restrictive contracts written in English. The baseball union's new rules seek to curb such practices by specifying that contracts be written in the athlete's native language.
Once they get athletes under contract, some agents betray their clients by getting too cozy with management officials, reportedly even accepting kickbacks from them. "General managers say, 'I'll give you $50,000 under the table if you agree to a lower signing bonus," says Rev. Ken Fairley, who is the adviser to Marcus Dupree, the former Oklahoma and USFL running back. Although it is surely not as common a practice as Fairley seems to imply, one NFL general manager, who asked to remain anonymous, says that it has indeed happened.
Disreputable agents have lots of ways of making money. To assure themselves a bigger immediate fee, some will negotiate short-term contracts when, for tax reasons, the athlete's interests might be better served by a longer contract or deferred payments. Others commit the opposite sin, tying the athlete to a long-term contract when his interests might be better served by a shorter one. They often do so because big multiyear deals get more publicity. Besides, somebody else might be representing the athlete next time around, so why not make the current contract for as many years as possible and maximize your fees?
The wrong is compounded when, as sometimes happens, the agent gets his percentage of a multiyear contract up front, an arrangement considered unethical—the NFLPA has a rule against it—because the agent is receiving current dollars while the athlete gets inflated ones in later years. The situation becomes all the more questionable when the agent's full fee is deducted from an athlete's signing bonus. An Athlete's Guide to Agents, a valuable book by lawyer Robert H. Ruxin, tells of the case of an NFL rookie who signed a nonguaranteed two-year contract for $25,000 a year and a $10,000 signing bonus. The agent took as his fee $6,000 from the bonus—a 10% cut of the $60,000 total. The player didn't make the team and wound up with the $4,000 left over from the signing bonus. The agent made more on the deal than the player.
To avoid a percentage arrangement and all the attendant risks, an athlete can have his agent bill him on an hourly basis. There are arguments against this as well. Under hourly billing, an agent might be tempted to let negotiations drag on endlessly. Steinberg, who charges a fee of from 4% to 6% for contract negotiations, dismisses those who bill by the hour as "egg-timer agents" and argues that such a fee structure militates against an important aspect of agenting: developing a personal relationship with clients. It helps, he says, not to have to worry about when to turn the meter on and off.
As if possible kickbacks and excessive fees weren't enough for the athlete to worry about, agents often see no evil in blatant conflicts of interest. The most conspicuous examples of this are hockey agent-promoter-union boss Alan Eagleson and agent-impresarios McCormack and Donald Dell, who are so powerful behind the scenes in golf and tennis that they come close to actually running those sports. McCormack and Dell own and manage tournaments while representing athletes, and they're in no small part responsible—as representatives of both payers and payees—for the rapid growth of appearance money at non-PGA golf tournaments (McCormack) and nearly all non-Grand Slam tennis events (McCormack and Dell). This is another example of agent power: Appearance money eliminates an important incentive to win, reducing some tournaments to exhibitions for star players—and, in effect, transforming sport into nonsport. Furthermore, some of the special events staged by McCormack and Dell draw top players away from tour events.
Of course, McCormack and Dell and Eagleson aren't the only agents who wear more than one hat. So do Larry Fleisher, who represents individual athletes while heading the NBA players' union, and Gary Holthus, a lawyer who has several top bowlers as clients, represents the Pro Bowlers Tour in some marketing enterprises and competes on the tour. "Somebody has to help the entire membership," Holthus says, defending his ubiquitous presence.
As union bosses, Eagleson and Fleisher may be privy to information not available to other agents, as may Holthus in his PBA position. And there surely are times when all three must act officially in a way that's at odds with the specific interests of one or more of their individual clients. Are Eagleson and Fleisher agents or union bosses first? Eagleson also is in charge of the Canada Cup and other hockey extravaganzas, which makes him a partner with NHL owners at the same time he's in an adversarial relationship with them in negotiating for his clients.
Other less obvious conflicts of interest abound. When an agent has clients on different teams in the same sport, he's representing competitors—a conflict that would be unacceptable in any other field. The conflict is worse when the clients play the same position. For example, when Warren Moon left the Canadian Football League three years ago, Steinberg was put in the awkward position of shopping him to the New York Giants, who had another Steinberg client, Scott Brunner, playing quarterback.
When an agent has several clients on the same team, a general manager might tell him that the team can offer only one guaranteed contract, forcing the agent to choose among his clients. In 1981 Tony Pace, who then represented the Kansas City Royals' Hal McRae and Frank White, was reported to have refused to come to terms on White's contract until the Royals agreed to extend McRae's, which had two years to run. That angered White, who objected to being used as "leverage to get Hal McRae a contract." Pace denies applying any such pressure. "The two contracts had nothing to do with one another," Pace says. "Unfortunately the two players chose to disbelieve me." Royals G.M. Joe Burke says that Pace did indeed try to link the two contracts, but that the club would have no part of it.
Agents also may represent athletes and the coach or general manager on the same team. Robert Fraley, an Orlando, Fla., agent, represents Eagles coach Buddy Ryan as well as Philadelphia's No. 1 draft choice, Jerome Brown. "We don't represent any coaches who negotiate contracts," Fraley says. "That would obviously be a conflict of interest." But serving labor and management on the same team can cause problems. Fraley also represents both coach Bill Parcells of the Giants and New York's second-string quarterback, Jeff Rutledge, a situation that is said to have alarmed Phil Simms before he established himself as the Giants' No. 1 signal caller.
Agents usually defend their conflicts by saying that their clients are fully aware of them. For example, Eagleson has said, "Everything I do is out front. If the players don't like it, all they have to do is fire me." But this doesn't get agents off the ethical hook. Does Tom Reich, a leading baseball agent who recently joined forces with McCormack's International Management Group, share with client Dave Parker details of endorsement deals he negotiates for client Tim Raines? If he does, he betrays Raines's confidence. If he doesn't, he is withholding information about the market Parker has the right to expect to hear from his agent.
And what about the conflicts arising from the special events and exhibitions staged by McCormack and Dell? Do those agent-impresarios divulge to their clients how much money those events make? In general they do not, says Bob Kane, a vice-president of IMG and Jerry Solomon, executive vice-president of ProServ. If the players want a bigger cut, who represents them in the negotiations? Other members of their respective agents' firms, that's who. As agents, McCormack and Dell are employees. As promoters, they're employers. The situation is inherently wrong.
In their seeming blindness to conflicts of interest and agents' other dubious practices, athletes give the impression that while they're God's favorites in one respect—their possession of enviable physical skills—they're his dolts when it comes to handling their financial affairs. That's probably not the case. Athletes as a group are not dumber than the public at large—con artists and overreaching accountants have cut a swath there too—but are younger and wealthier and more famous than most of the rest of us. That makes them an inviting target for unscrupulous agents, and when one of them is victimized by an agent, it's usually big news.
Still, athletes have been almost unbelievably trusting. Many of them are sheltered and coddled from the first time they throw a pass or swing a bat, and they grow accustomed to letting others take care of their lives. In his autobiography, Behind Closed Doors, Woolf told of the time one of his clients, former NHL star Derek Sanderson, was staying at a hotel in Honolulu and called Woolf in Boston several times to complain that his room had no hot water. Sanderson wanted Woolf to talk to the manager about getting the problem fixed. "What astounds me is I did it," Woolf says.
Such dependence is not uncommon. "Mostly what athletes want to do is play football or baseball," says Los Angeles agent Dan Grigsby. "If you can make something easy for them, they say, 'I trust you—take care of it for me.' "
To be sure, some athletes get into trouble by not following their agent's advice. "The control agents have is a lot less than people perceive," says Montreal agent Morden Lazarus. "Athletes rarely follow advice. They'll have a deferred-payment plan set up, and then they'll need money and break it."
In dealing with agents, athletes are often rash, ill-informed, foolish—and some are downright dishonest. "Some of them are the biggest hustlers in the world," says Steve Ehrhart, a former agent who has also been a team and league official in the USFL.
"They're going to go for the bucks, man," says former Lions and Rams wide receiver Ron Jessie, who has worked as an agent. "When they make business decisions, they don't have enough integrity to stick by those decisions. They'll sign with four or five people and lead people on as if they're going to do business with them. It's a combination of the way the agent business is now and the way the guys are coming out of school now. The two together. It makes for a corrupt system."
The deeper one digs into the question of agent wrongdoing, the harder it is to tell the bad guys from the good guys. College officials rail against abuses by agents, yet colleges are guilty, in ways both direct and subtle, of encouraging agent abuses. Some coaches are whispered to have accepted money from agents to help steer athletes the agents' way. And the rigidity of NCAA rules that prevent athletes from receiving spending money from the school or holding even part-time jobs makes them ripe for under-the-table payments. NCAA rules also prevent college baseball and hockey players from using agents to feel out pro teams about their market value while they try to decide whether to enter early pro drafts. As a result, says agent Bucky Woy, "signing bonuses in baseball are going down because the kids don't know whether they're worth $100,000 or $200,000."
Pro sports officials are culpable too. Some of them have sought to undermine the agent-athlete relationship by offering an athlete a deficient contract and then spreading the word that the agent is inept. Marvin Miller, former executive director of the major league baseball players' union, says that despite their public expressions of concern, some front-office people welcome agent incompetence because it gives them the upper hand in salary negotiation and arbitration.
So one may argue that the counterbalance historically provided by—or at least expected from—sports agents is still needed today. The rival leagues that helped drive up player salaries—the AFL, ABA, USFL and the rest—have either disbanded or have been absorbed, and management today is hanging tough, refusing to bid for free agents in baseball and steadfastly resisting—at this writing—unfettered free agency in football.
It has fallen to the players associations, whose rise to prominence has paralleled the rise of agents, to wrestle with management on those issues. But the unions find themselves vying with management and disreputable agents simultaneously—no simple task.
For sure, the bad eggs in the business aren't going to disappear without a ton of prodding. And it's as clear as the red ink on Abdul-Jabbar's ledger that the athlete must take responsibility for his own well-being or face the consequences. To whom does he turn for the guidance that can set him on the right path? The world of sport has been grossly negligent so far in providing it. Surely the colleges, which are there to teach, can do better at instructing student-athletes how to manage their affairs. Duke has a model career-counseling committee for athletes. Would that all schools, and all prospective counselors, were so helpful. Ultimately, though, it is up to the athletes themselves to become more prudent about their financial affairs and to get more involved. When the serpents strike, ignorance can be financially fatal.
King has made a lucrative practice out of suing agents. He says his specialty has "growth potential."
Steinberg argues that an hourly fee militates against an important aspect of agenting: that of developing personal relationships with clients.
When agents run special events do they divulge to their clients how much these tournaments take in?
Agents are largely responsible for the rapid growth of appearance money in golf as well as in tennis.
Derek Sanderson, who was staying at a hotel in Honolulu, called Woolf in Boston several times to complain his room had no hot water.