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NCAA "Singles Out" Baseball Player for Not Paying Advisor

By Rick Karcher, Michael McCann, Geoffrey Rapp, Greg Skidmore, and Howard Wasserman

Liz Mullen of SportsBusiness Journal (OSU Case Raises Questions About NCAA Rules for Agents, 6/16/08) reports that Oklahoma State University pitcher Andy Oliver was declared ineligible late last month by the NCAA after he received a bill for $113,000 from his "advisor," MLB certified agent Robert Baratta. Oliver recently terminated Baratta, and hired Scott Boras as his advisor. According to Mullen, "Baratta maintains that by charging Oliver for 325 hours of advice at $350 an hour, he was following NCAA guidelines that state a student athlete must pay his adviser at that adviser?s normal rate." Mullen raises an interesting point: "The issue in the industry is the fact that many MLB player agents routinely charge student athletes nothing unless and until the player is drafted. That leads to the question of whether this standard, industry practice is a violation of NCAA rules." I would add that it also leads to the corollary question of whether or not agent regulations of governing bodies should conform with industry norms.

The NCAA Bylaws on amateurism and use of agents, which are incorporated into the student-athlete's scholarship, do not contain any provision requiring a student-athlete in any sport to pay his or her advisor, let alone how to pay his advisor. However, there is a statement buried in a Memorandum, dated October 7, 2007, from the NCAA to Baseball Student-Athletes with Remaining Eligibility that provides: "Finally, it is important to note that in order to maintain your eligibility at an NCAA school, if you receive assistance from an advisor, you will be required to pay that advisor at his or her normal rate for such services." The Memorandum contains a signature line for the athlete to date and sign.

The first "advice" that an advisor might consider giving his client is to not sign this document. I have no idea whether Oliver signed it, but I do not see how this Memorandum has any legal significance whatsoever if the student-athlete does not agree to it. Neither the NCAA bylaws nor the student-athlete's scholarship incorporates or references this document. If the NCAA were to declare ineligible a student-athlete who did not sign it, I think the student-athlete would make a very good case for breach of contract (his scholarship) and that the NCAA lacks the authority to declare any student-athlete ineligible for doing something that does not violate its rules and regulations. Under these facts and circumstances, it would be difficult for the NCAA to take the position that signing the Memorandum is a condition to remaining eligible. But that's the legal analysis. The practical reality is that if a player refused to sign it, the compliance director of the school would say to the player, "you need to sign it if you want to play."

This entire situation can be avoided if the NCAA would simply recognize that baseball players are uniquely situated from student-athletes in football and basketball because of the timing of the draft. The MLB draft takes place within days of the completion of the college regular baseball season, and during the playoffs for many players drafted. Student-athletes can't sign a contract with an agent before the draft because they will jeopardize their eligibility, and they also can't agree that they will pay an advisor when they sign a professional contract. So this "under the table" process takes place in which players choose an advisor with a handshake, and the advisor talks to clubs on his behalf, thus technically breaking every rule in the book. These verbal arrangements also create uncertainty between the parties regarding the terms of their relationship, including the agent's fee. But in football, for example, the player has a period of months between the end of the season and the draft to select and sign with an agent. The player signs the NFLPA standard representation agreement at which point there is no concern regarding loss of eligibility because the athlete has no remaining eligibility (he is either a senior or has declared himself eligible for the draft).

In a law review article published in 2005 (which can be downloaded from here), I proposed that the NCAA make an exception for baseball players and permit them to sign with an advisor during the season as long as the player and advisor execute a standard representation agreement drafted by the NCAA. This would help to clarify and define the "industry norms" as well as bring certainty to the terms of the player-advisor relationship.

Full post as published by Sports Law Blog on June 17, 2008 (boomark / email).