Chapter 151

2003 -- S 0824

Enacted 07/10/03

AN ACT

RELATING TO BUSINESSES AND PROFESSIONS -- ATHLETE AGENTS

Introduced By: Senator Daniel J. Issa

Date Introduced: February 26, 2003

It is enacted by the General Assembly as follows:

SECTION 1. Title 5 of the General Laws entitled "Businesses and Professions" is hereby

amended by adding thereto the following chapter:

CHAPTER 74

ATHLETE AGENTS

5-74-1. Definitions. – For the purposes of this chapter:

(a) "Agent contract" means any contract or agreement under which an athlete authorizes

an athlete agent to negotiate or to solicit on behalf of the athlete with one or more professional

sports teams for the employment of the athlete by one or more professional sports teams, in the

sport or sports in which the athlete is performing at the intercollegiate level.

(b) "Athlete agent" means any person who, for compensation, either now or in the future,

directly or indirectly recruits or solicits an athlete to enter into an agent contract, professional

sports services contract or financial services contract with that person or another person, or who

for a fee procures, offers, promises or attempts to obtain employment for an athlete with a

professional sports team.

(d) "Financial services contract" means any contract or agreement under which an athlete

authorizes an athlete agent to provide financial services for the athlete, including the making and

execution of investment and other financial decisions by the agent on behalf of the athlete.

(e) "Personal service contract" means the execution by an athlete of a personal service

contract with the owner or prospective owner of a professional sports team for the purposes of

future athletic services is equivalent to employment with a professional sports team.

(f) "Student athlete" means an individual who is enrolled in or has indicated in writing

the intention to enroll in an institution of higher education in the state of Rhode Island.

5-74-2. Regulation with the office of higher education. – An athlete agent shall

athlete either directly or indirectly, or enter into a contract with a student athlete who attends a

college or university in the state. The annual fee therfor shall be one hundred dollars ($100).

5-74-3. Disclosure statement required. – (a) Upon registration, the athlete agent shall

submit to the office of higher education and to every institution of higher education in the state

with an athletic program a statement which shall contain the following information:

(1) The registrant's name and street address of the registrant's principal place of business;

(2) The registrant's educational background, training and experience related to serving as

an athlete agent; and

(3) The names and addresses of all parties who are financially interested as partners,

associates or shareholders of the business of the registrant and all persons for whom the registrant

is working as an independent contractor.

(b) No applicant for registration may have, in any state, within five (5) years prior to the

date of application, been found guilty of any felony or misdemeanor, or entered a plea of no

contest to any crime, which relates to the registrant's practice as an athlete agent. The office of

higher education may withhold registration until the results of the criminal record checks are

received.

5-74-4. Financial responsibility required of registrant. – The registrant shall submit

proof of professional liability insurance that would cover damages in an amount no less than one

million dollars ($1,000,000); provided, however, that any actual damages shall not be limited to

the amount of the liability insurance provided in this section.

(b) If the registrant is an attorney licensed to practice law in Rhode Island, the registrant

may choose, in lieu of a surety bond, to submit proof of liability insurance that would cover

damages in an amount equal to the amount set forth in subsection (a) of this section; provided,

however, that any action for damages shall not be limited to the amount of the bond or of the

liability insurance as provided in this section.

5-74-5. Contractual provisions -- Requirements. – (a) Every athlete contract shall be

in writing and shall indicate the fees and percentages to be paid to the athlete agent or corporation

which he or she represents.

(b) In the event that a student athlete is enrolled as a student at an institution of higher

education in Rhode Island, the athlete agent must file a copy of the contract with the athletic

director of the institution before the contract is signed by the student athlete.

agent within fifteen (15) days after the contract is signed. The athlete's right to rescind the

contract may not be waived.

(d) All contracts with student athletes must contain a written warning to the student

athlete regarding possible loss of collegiate eligibility according to the regulations of the relevant

national association.

5-74-6. Permitted contacts with student athletes. – (a) An athlete agent may contact a

student athlete only as provided in this chapter. In the event that the student athlete is a minor,

the agent must initiate contact with the student athlete's parents or legal guardians

(b) An athlete agent may initiate contact only with those student athletes who have

completed their collegiate eligibility (including post-season tournaments).

having provided the same information to the athletic director of the institution where the student

athlete is enrolled.

(d) Each institution of higher education in Rhode Island may sponsor athlete agent

interviews on its campus where the athlete agent may discuss with the student athlete the

provision of legal and financial services. The athlete agent must comply with any regulations

established by the institutional committee prior to initiating any contact with the student athlete.

(e) An athlete agent may contact a student athlete who has not completed his/her

collegiate eligibility only if said student athlete initiates the contact. In such instances, the athlete

agent must give prior notice of his/her intention to respond to the request to the athletic director

of the institution where the student athlete is enrolled.

5-74-7. Prohibited act. -- An athlete agent shall not:

(a) Publish or cause to be published any false, fraudulent, or misleading information,

representation, notice, or advertisement or give any false information or make any false promises

or representations concerning any employment to any person;

(b) Divide fees with or receive compensation from a person or entity exempt under this

act or a professional sports league or franchise or its representative or employee;

higher education where the student athlete is enrolled, by which the athlete agent offers anything

in return for the referral of any clients by the employee;

(d) Offer anything of value to induce an athlete to enter into an agreement by which the

athlete agent will represent the athlete; or

(e) Except as otherwise provided by this chapter, directly contact an athlete who is

participating in any intercollegiate sport until after completion of the athlete's last intercollegiate

contest and may not enter into an oral or written agreement that the athlete agent will represent

the athlete before the athlete's last intercollegiate contest.

5-74-8. Actions for damages by institutions of higher learning -- Damages and civil

penalties. (a) An institution of higher education which is adversely affected by actions of an

athlete agent shall be entitled to bring a civil action against an athlete agent for damages.

For the purposes of this section, an institution of higher education shall be deemed to be

adversely affected, if, because of the unlawful activities of the athlete agent, the institution is

disqualified or suspended from participation in intercollegiate sports contests by a national

association for the promotion and regulation of intercollegiate athletics and, because of that

disqualification or suspension, the institution:

(1) Loses revenue from media coverage of sports contests; or

(2) Loses the right to grant athletic scholarships in the sport affected; or

(3) Loses the right to recruit athletes; or

(4) Otherwise suffers an adverse financial impact.

(b) An institution that prevails in a suit brought under this section shall be entitled to

recover:

(1) Actual and punitive damages;

(2) Exemplary damages;

(3) Costs of court; and

(4) Reasonable attorney's fees.

liability insurance.

(d) An athlete agent who violates this chapter may be assessed a civil penalty by the

department of business regulation in an amount not to exceed ten thousand dollars ($10,000).

(e) Any athlete agent who violates any provision of this chapter shall be subject to

forfeiture of any right of repayment for anything of value received by the student athlete as any

inducement to enter into a contract.

(f) Any athlete agent who violates any provision of this chapter is guilty of a

misdemeanor and, upon conviction, may be imprisoned for not more than one year or fined not

more than five hundred dollars ($500), or both.

Any athlete agent who violates any provision of this chapter may also have his or her

registration suspended and/or revoked.

5-74-9. Persons exempt. – This chapter shall not be construed to require any attorney-at-

law licensed by the supreme court of this state to register as an athlete agent under this chapter,

provided that the attorney retains an active policy of professional liability insurance for the

minimum amount of one million dollars ($1,000,000) in coverage.

5-74-10. Severability. – If a provision of this chapter or its application to any person or

circumstances is held invalid, the invalidity shall not affect other provisions or applications of the

chapter which can be given effect without the invalid provision or applications, and to this end

the provisions of this chapter are declared to be severable.

SECTION 2. This act shall take effect upon passage.

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LC02061

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