An appeal brought by Prime Sports Marketing, LLC (“Prime”) is currently pending before the Fourth Circuit, in which the appellate court is tasked with determining whether courts have the authority to decide who qualifies as a “student athlete” as that term is used in the Uniform Athlete Agents Act (“UAAA”). Zion Williamson (“Williamson”)—the party on the other side of Prime’s appeal—argues that a marketing agreement he entered into with Prime while he was playing basketball at Duke University is void because Prime’s president, Gina Ford, was not certified as an athlete agent at the time she recruited him, in violation of the UAAA. In its amicus curiae brief filed in support of Williamson, the National Basketball Players Association (“NBPA”) argues that Prime advocates for an interpretation of the UAAA that defies logic and would strip college athletes of all protection from the predatory agent practices that the UAAA is designed to prevent. So, is this appeal going to be a slam-dunk for Prime, or Williamson? And what will the outcome of Prime’s appeal mean for the UAAA and the athlete-agent relationship moving forward?
The UAAA
The UAAA was first promulgated by the Uniform Law Commission (“ULC”) in 2000. The UCL adopted a revised version of the UAAA in 2015, which was thereafter amended in 2019. To date, the UAAA has been enacted in 42 states.
In its current form, the UAAA: (i) defines “athlete agent” and “student athlete”; (ii) prohibits individuals from acting as an athlete agent if they do not obtain the required certificate of registration; (iii) deems void any contract executed between a student athlete and an agent who is not registered as an athlete agent; (iv) requires agents to include certain notices in all agency contracts entered into with student athletes, which warn the athlete that they may become ineligible to compete in collegiate sports if they execute the agency contract; and (v) prohibits athlete agents from giving student athletes materially false or misleading information or making materially false promises or representations with the intent to induce the athlete into entering into an agency contract.
According to the UCL, the UAAA was enacted to address the widespread issue of agents misleading student athletes into executing agency contracts that cause serious eligibility problems for the student and the academic institution at which the student athlete is enrolled. The UCL acknowledges the competitive nature of the agent industry and the desire of agents to maximize their potential income, but not at the expense of unsuspecting college athletes who are unaware that an agency contract could jeopardize their college sports careers.
District Court Proceedings
Williamson was first recruited by Prime while playing for Duke University during the 2018-2019 basketball season. Prime sought to become Williamson’s marketing agent, and in April 2019, the parties entered into an agreement that entitled Prime to 15% of Williamson’s income from endorsement deals (the “Prime Agreement”). That relationship was short-lived, as Williamson terminated the Prime Agreement about a month later in May 2019. Williamson then signed a representation agreement with Creative Artists Agency.
In June 2019, Williamson filed suit in the United States District Court for the Middle District of North Carolina, requesting the district court to declare the Prime Agreement void because Prime violated the UAAA. Williamson argued that (1) he was a student athlete at Duke University when Prime began recruiting him, (2) Ford was not registered as an athlete agent in North Carolina at the time of executing the Prime Agreement, and (3) the Prime Agreement did not warn Williamson that by entering into the contract, he could lose his eligibility to compete as a student athlete at Duke University. In response, Prime asserted a variety of affirmative defenses and counterclaims, alleging that Williamson did not qualify as a student athlete due to allegedly violating certain NCAA rules that rendered him ineligible to play basketball. Prime also argued that Williamson breached the Prime Agreement by terminating it early and misappropriating Prime’s trade secret marketing materials.
On May 20, 2020, Williamson moved for partial judgment on the pleadings concerning certain of Prime’s counterclaims. The district court issued an Order granting that motion on January 20, 2021. The district court relied on the plain language of the UAAA, which defines a “student athlete” as “[a]n individual who engaged in, is eligible to engage in, or may be eligible in the future to engage in any…intercollegiate sport,” but not an individual who is “permanently ineligible to participate” in the sport. According to the district court, Williamson was actively engaged in an intercollegiate sport at the time the Prime Agreement was executed and easily qualified as a student athlete under the UAAA. The district court also found that Ford and Prime were not licensed as athlete agents in North Carolina and that the Prime Agreement did not contain the eligibility warnings required by the UAAA. For those reasons, the court held that Williamson was entitled to a declaration that the Prime Agreement was void. The district court further noted that it is not the court’s role to determine the eligibility of a student athlete. Instead, the court’s role seems limited to applying the UAAA to determine whether a student athlete has been declared permanently ineligible by the governing body with authority to make that determination—in this case, the NCAA.
After the district court granted Williamson’s motion for partial judgment on the pleadings, the parties conducted discovery on the remainder of Prime’s counterclaims and Williamson thereafter moved for summary judgment. On July 18, 2022, the District Court issued an Order granting that motion, in large part because the Prime Agreement was void. Prime then appealed the district court’s order on Williamson’s motion for partial judgment on the pleadings and motion for summary judgment.
Prime’s Appeal
On January 11, 2023, Prime filed its opening brief. Prime argues that the district court erred in granting Williamson’s motion for partial judgment on the pleadings by violating the rules of statutory construction as they apply to the UAAA. According to Prime, under the district court’s interpretation of the UAAA, an individual meets the definition of a student athlete unless and until the NCAA declares them permanently ineligible. Conversely, Prime argues that a student athlete is ineligible under NCAA requirements when they violate NCAA rules, not when the NCAA formally declares them ineligible. Prime contends that the district court’s interpretation of the UAAA improperly cedes the authority of courts to private organizations such as the NCAA and that the district court was not bound by the finding of the NCAA concerning Williamson’s eligibility status. Prime urges the Fourth Circuit to hold that courts have the authority to evaluate the eligibility of student athletes.
In his answering brief filed on March 24, 2023, Williamson argues that the plain language of the UAAA supports a finding that he was a student athlete at the time Prime recruited him because he was on Duke University’s active basketball roster. In other words, Williamson was actively engaged in an intercollegiate sport when the Prime Agreement was entered into. Williamson also argues that it is well-settled that the NCAA is responsible for deciding the eligibility of college athletes, not courts, and the NCAA’s assessment of eligibility is controlling. And, significantly, if Prime’s interpretation of the UAAA is adopted by the Fourth Circuit, it would transform the UAAA from “a shield for student-athletes” into a “sword” for agents, says Williamson.
The Fourth Circuit heard oral arguments in Prime’s appeal on October 24, 2023, and now the wait begins to see how the three-judge appellate panel will rule.
The NBPA Weighs In
The NBPA’s purpose is to advocate for the best interests of NBA players, which includes ensuring that agents follow certain rules intended to afford athletes fair representation. On March 31, 2023, the NBPA filed a spirited amicus curiae brief in support of Williamson, emphasizing the importance of the UAAA and criticizing Prime’s proposed interpretation. The NBPA said that “Prime Sports’ interpretation of the Agents Act is profoundly wrong”, would “severely undercut” the protections provided for by the UAAA, and would harm the “athletes the act is meant to protect”.
The NBPA’s position is clear—the Prime Agreement was invalid due to Prime’s failure to comply with the UAAA, and Prime’s argument that Williamson did not qualify as a “student athlete” is “flat wrong”. If an active player on the roster of a college basketball team is not a “student athlete” under the UAAA, then who is? The NBPA also highlights that nothing in the UAAA suggests that courts should be permitted to second-guess a college athlete’s eligibility when the NCAA has already made its own determination, particularly not at the request of an agent.
Future Implications
The potential implications of the Fourth Circuit’s ruling on Prime’s appeal are significant. If the appellate court sides with Prime, it will open the door to courts—rather than the NCAA—adjudicating the eligibility of college athletes to determine whether they are protected by the UAAA. Not only that, but if courts are permitted to determine eligibility status, agents will be able to approach college athletes in the hopes of getting them to agree to egregious agency contracts, and then ask the court to uphold those agreements by finding that the athlete was ineligible at the time of signing for one reason or another. As the NBPA pointed out in its amicus curiae brief, if the Fourth Circuit adopts Prime’s interpretation of the UAAA, agents could dig into an athlete’s past to obtain evidence of NCAA violations that would demonstrate ineligibility and render the UAAA inapplicable. These are the kinds of predatory agent practices that the UAAA was originally designed to prevent.
Takeaways
Prime’s appeal is underpinned by the strong competing interests of athletes and agents and the resulting risk of young athletes receiving unfair representation early on in their careers. The UAAA sets relatively simple rules for agents to adhere to when recruiting college athletes, yet those simple rules significantly protect those athletes from being taken advantage of by unscrupulous agents. The NCAA seems to be the appropriate governing body to deal with issues of student athlete eligibility and the application of the UAAA. It is unlikely that the Fourth Circuit will disagree, but if it does, it remains to be seen how the protections of the UAAA will be impacted. If courts are left to determine questions of eligibility status, it will be imperative for college athletes to use caution when entering into any agency agreement. Doing so could jeopardize their ability to play college sports, as they may no longer be able to rely on the protections of the UAAA.
*Not intended to constitute legal advice to be relied upon. We recommend that you consult with legal counsel to receive tailored advice suitable to your circumstances.
