SBJ/April 18 - 24, 2005/SBJ In Depth

Who holds the cards?

Sports agents have no legal, formal role in labor negotiations and are supposed to play a supportive, but relatively minor, role to sports unions during the collective-bargaining process. But it hasn’t always worked out that way.

In the past, agents have set up meetings with leagues and unions and helped to overthrow a union head. With negotiations continuing for new collective-bargaining agreements in the NBA, NFL and NHL, agents’ support, or lack of it, could help determine the future of those leagues.

In the current NHL lockout, communication between agents and management has raised some eyebrows. In an example of agents working to help their union, sources said a group of hockey player agents, representing eight major sports agencies, are in discussions to form an alternative league to compete with any NHL plan to use replacement players.

“We are not going to sit around and have no alternative for our players to play,” said one person familiar with the agents’ effort.

There has been some recent optimism that a deal could be struck to end the NHL lockout. But if there is no deal, the agent-organized league could go head-to-head against a league effort to use replacement players.

The agencies involved, including IMG, Octagon and Newport Sports, are acting at the behest of the NHLPA. The agent-planned league will go forward if the NHL declares an impasse, implements a new economic system and tries to lure NHL players back under the new rules.

See also:
Breaking down collective-bargaining agreements in professional sports
The NHL, meanwhile, has filed a complaint with the National Labor Relations Board that strikes at the heart of the NHLPA’s control over agents. The NHL claims that a union plan to decertify agents who represent replacement players has violated the law because agents are “neutral persons.” It is illegal for unions to pressure neutral third parties to stage a secondary boycott of a primary employer engaged in a labor dispute.

Bill Gould, former chairman of the National Labor Relations Board, said the NHL may have a difficult time proving that agents, who derive their authority to negotiate player contracts through certification by sports unions, are neutral persons. But if the NHL were able to successfully challenge the NHLPA’s control over agents, it could be harmful not just for the NHLPA, but for other sports unions.

“It would make it difficult for the union to wage economic warfare,” Gould said.

Playing their hand

Simon Gourdine, former executive director of the National Basketball Players Association, saw firsthand the role agents play in labor negotiations. “When you are the head of a union, no matter how diligently you try to speak to every player, [agents’] ability to communicate with players on a frequent basis is much better than your ability,” he said.

Should NHL Commissioner Gary Bettman focus his sights on starting a new season with replacement players, agents say they will attempt to start an alternative league.
In 1995, powerful basketball agents, including Arn Tellem and David Falk, led a revolt of players unhappy with a new collective-bargaining agreement that had been negotiated by Gourdine and NBA Commissioner David Stern. The agents and players tried, but failed, to decertify the union. However, they were able to elect a new player board, which fired Gourdine in early 1996. Gourdine now is deputy commissioner of the New York Police Department.

Tellem said he considers it “a badge of honor” that he was one of the leaders to help oust Gourdine. “He was ill-suited to be head of the NBA players union,” Tellem said.

In late 1998 and early 1999, Leonard Armato, the current commissioner of the AVP, who then was the agent for NBA star Shaquille O’Neal, set up a meeting between Stern and NBPA Executive Director Billy Hunter, as well as meetings with players who wanted to get a deal done shortly before the NBA lockout was settled.

Armato was credited by some for helping to end the lockout, but criticized by some union officials who said he interfered and made the situation worse. Armato said that during labor negotiations, “It is best to keep a united position. But if you believe the whole league is falling off a cliff, you probably have to do something that is more aggressive if you feel it is in the best interests of your clients.”

In the last few months, agents may have taken the initiative in labor talks in the NHL lockout, as well. Last month, NHLPA Executive Director Bob Goodenow told agents at a meeting in Toronto that certain agents had damaged the collective-bargaining process by striking up talks with NHL owners. Prominent agents were said to be involved in a plan to save the season right after it was canceled by NHL Commissioner Gary Bett-man. Goodenow did not name the agents who he said injected themselves into the negotiations, but said they did not show up at that March 2 meeting.

Jeffrey Kessler, an attorney who has represented a number of sports unions and currently represents the NBPA and the NFL Players Association, said, “If the NHL agents are acting on their own, in my view they are acting in a way that is inconsistent with their roles as agents.”

But prior to that incident, there seemed to be quite a bit of communication between NHL management and hockey agents.

Starting in March 2004, NHL chief legal officer Bill Daly sent 20 to 30 major NHL player agents copies of a financial report prepared for the league by former Securities and Exchange Commission Chairman Arthur Levitt. The report claimed that player costs were not in line with sound business practices. Some agents, who said Daly included a personal note with the report, saw it as an effort to go around the union.

Then in November, numerous hockey agents received, from an anonymous sender, an internal NHL memo that criticized the union’s message to players. NHLPA senior director Ted Saskin accused the NHL of sending the letter, which was delivered in a plain manila envelope with no return address, but an NHL spokeswoman denied that the league sent it.

Just a few weeks ago, some agents received a copy of a letter from Daly to the NHLPA stating that the union’s threat to decertify agents who represent replacement players violated the National Labor Relations Act and the NHL’s expired CBA.

J.P. Barry, an agent who is co-director of IMG Hockey and a former NHLPA lawyer, said that the NHL’s communication with agents appears to be part of the “massive public relations campaign that the league has conducted throughout these negotiations” and “another effort to manipulate all the related constituencies.”

Communication between agents and management during the lockout is counterproductive, Barry said.

Sports union officials say agents can be helpful to the labor process, but they should not take a role in negotiations.

NHLPA officials declined to be interviewed for this story but issued this statement:

“Certified agents fulfill a very important role in the individual contract negotiations between players and clubs. The negotiations concerning the collective bargaining agreement are conducted between the respective representatives of the NHLPA and the NHL. The NHLPA communicates and meets regularly with certified agents and agents do provide valuable insight for the NHLPA’s Negotiating Committee.”

Collective effort?

Agents, in fact, have a higher duty of loyalty to the unions than do the player members, sports union officials say.

Agents led a player revolt that led to the ouster of Simon Gourdine (center) as NBPA chief.
“Agents, in nearly all respects, are like employees of the sports unions themselves,” said Richard Berthelsen, NFLPA general counsel. “They are agents of the union. We view the agents as we would employees for this organization and expect the same thing from them when it comes to loyalty during a labor dispute.”

The NFLPA is in tense negotiations with the NFL to extend their labor agreement, which expires at the end of the 2007 season. If it is not extended before then, the last year of the deal has no salary cap and players must wait six years, instead of four, to become free agents. The NFLPA recently told its certified agents to try to take advantage of that uncapped year when negotiating multiyear deals now.

Ron Klempner, general counsel of the NBPA, said the union has tried to get input from NBA player agents as it is currently negotiating a new labor agreement with the league. The NBA’s CBA expires on June 30. “We don’t have a monopoly on smart thinking,” Klempner said. “The agents are in the trenches. They deal with the system day in and day out and they will have some invaluable insights to what changes we could make that could be beneficial to the players.”

Agents, too, are able to voice any disagreements that they might have with the union stance within internal agent meetings, Klempner said. “But when it comes to your public statements … everybody has to speak with a unified front.”

Klempner, Berthelsen and Kessler all predicted that the NHL’s complaint to the National Labor Relations Board will not be upheld and claimed that unions have the right to discipline player agents who act against the interests of the union. Klempner noted that, during the 1998-99 lockout, the NBPA decertified an agent who wrote newspaper columns criticizing the union.

Tellem is among the agents who have participated in the NBPA’s agent committee on negotiations. Despite his efforts to overthrow Gourdine, Tellem is viewed as one of the strongest supporters of unions among any major sports agent. As CEO of SFX Sports, he oversees agents who represent almost one-fifth of NBA players and about 16 percent of Major League Baseball players.

“We have talked about it and I think the unions in basketball and baseball know they can count on our complete and total support in any negotiation, wherever it may lead,” Tellem said.

In past NBA labor negotiations, “The agents have undermined the collective spirit of what the union is trying to achieve … by talking to [general managers] and making public statements to the media,” Tellem said. He said he hopes that the union and agents are better prepared in the current negotiation, but he is worried given the attitudes of some of the agents on the NBPA agent committee.

“I have been disappointed in their lack of understanding of the issues that are at stake,” he said. “These are the people who are talking to the players and advising them, and this is what scares me.”

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