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.