Player-Agent Agreements: Is your Rollover Clause Legal? Part I

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breach of KThe past few months we have received several complaints from FIBA agents about players signing contracts behind their backs and other agents poaching players. This two-part article explores the legality under the FIBA regulations of rollover clauses in player-agent agreements and what remedies agents have against their former players and other agents. To view the second part, click here.

 

Rollover Clauses

 

A rollover clause is a contractual provision that causes the contract to roll over after each agreed period until cancelled by one party. Many FIBA agents utilize a 1-year rollover provision that requires notice prior to 30 days before the end of the 1-year term. This type of provision eliminates the need to re-sign the player each year and gives both the player and agent confidence for the future. Many player-agent agreements are signed in the summer months, which is the peak scouting and signing season for European teams. If an agent were constantly unsure about a player’s status because the agent had to re-sign the player during the summer each year, that agent would be less likely to focus his energy on getting that player a job. With a rollover provision, the agent can remain confident that the player will remain with him and the agent’s efforts to find the player a team will be compensated by the agent fee. But are rollover provisions legal under the FIBA regulations?

 

FIBA Regulations

 

The FIBA regulations concerning agents’ duties and player-agent agreements are less than clear as to whether a rollover provision is allowed. The regulations regarding FIBA agents can be found here. FIBA regulation 158(j) states that agents have a duty “[t]o make use, to the extent possible, of the master agreement between agents and players (see Appendix 2 to this Book 3) as provided by FIBA.”

 

Appendix 2, FIBA’s Master Player Agent Agreement, can be found here. Section 4, titled “Term” states “This Agreement shall begin on the day of signature hereof by both parties and shall expire on ___________ [not to exceed two years] unless renewed by written agreement between the parties].”

 

First, FIBA regulation 158(j) does not appear to require agents to use the master player-agent agreement. The regulation states that agents only have a duty to use the master player-agent agreement, “to the extent possible.” This language is less than clear, but appears to mean the entire master agreement is optional.

 

Second, the master agreement is found in the Appendix and not one of the regulations, and no other regulation appears to be relevant to allowing or prohibiting a rollover provision. Is the appendix a binding regulation or simply a suggested reference?

 

Third, the section of the master agreement titled “Term” appears to contain two options relevant to a rollover provision, neither of which may be binding. The first states that the agreement is “[not to exceed two years].” Is a contract that both the agent and the player can terminate every year but which could potentially last more than two years a contract that “exceeds two years”? Or does the ability to terminate the contract each year mean it does not exceed two years?

 

The second option is even more confusing. It states “unless renewed by written agreement between the parties].” There is an extra bracket (]) that makes it unclear whether this language is meant to be optional or binding. If binding, it appears that the only way a player-agent agreement can exceed two years is through written agreement by the parties. This may mean rollover provisions that allow a player-agent contract to potentially exceed two years without requiring additional written agreement between the parties may be illegal. But is the original written contract defining the rollover provision sufficient to meet the writing requirement for a contract that exceeds two years, or do the parties have to have a separate written agreement every two years to meet this requirement? Regardless, if this language is optional, rollover provisions may clearly be legal.

 

Remedies

 

The point of all this, of course, is how can an agent enforce his player-agent agreement on a) players who go behind the agent’s back to sign with a new agent, and a) agents who poach players under a binding contract.

 

This is a two-part story, to view the second part, click here.