Agents of Misfortune

With the recent cases of Terrell Owens, Dennis Northcutt and Lavar Arrington, NFL agents are more under the microscope than ever before. .NET's Doug Farrar takes a look at what the future might hold for players, agents, financial advisors, and the NFLPA.

First and Ten – Agents of Misfortune
“Larceny abhors a vacuum” – Wells Twombly

Let’s kick this discourse off with a little word association:

“Professional Sports Agent”.

Ah, yes. What came to mind? The slick, tricky, cell-phone-welded-to-the-ear, mega-dealin’, Armani-suit-wearin’, 10-times-smarter-than-all-his-clients-put-together super-shyster, right? Jay Mohr in “Jerry Maguire”? Arliss Michaels? Scott Boras, the man who can strike fear in the hearts of every owner and general manager by extracting one quarter of a billion dollars for one of his clients?

Or, if you’ve been keeping up to date with recent developments in the NFL, perhaps a picture of Krusty the Clown is filling your mind?

Folks, there is a nasty streak of grievous misrepresentation rearing its head. It’s getting to the point where the erstwhile agent, the supposed caretaker-at-all-costs of the pro athlete, might have more of a challenge overcoming the perception of universal ignorance than the automatic inference that only lizard-like behavior permeates his profession. I don’t know how or when this worm turned, but the three most visible cases of 2004 shoot straight to malpractice. For those who may not know, here are the highlights:

1. Acclaimed wide receiver (and All-Pro pain in the butt) Terrell Owens was prevented from becoming a free agent when the NFL Management Council ruled in March, 2004 that his agent, David Joseph, failed to void the last two years of his contract by the Feb. 21 deadline. Owens' original deadline, as specified in his contract, was March 2. The NFL faxed Joseph a memo changing the deadline, which Joseph said he never received. The San Francisco 49ers then traded Owens to the Baltimore Ravens instead of the Philadelphia Eagles, the team Owens claimed he wanted to play for.

And that’s when all hell broke loose. The NFL Players’ association filed an appeal with the league on Owens’ behalf, and before an independent arbitrator could rule on the case, the Eagles reached a deal for Owens in which they sent a fifth-round draft pick to Baltimore and defensive end Brandon Whiting to San Francisco. The Ravens got back the second-round pick they sent to the 49ers for Owens.

2. Cleveland Browns wide receiver Dennis Northcutt signed a seven-year contract with the Browns in 2000, when he was the initial pick in the second round of the draft. According to many sources, the final three years of the contract were voidable if Northcutt attained certain performance targets (which he did). However, since the paperwork officially voiding the contract was not filed with the NFL in time (yes, again), Northcutt was held to the original terms of his deal, potentially costing him millions of dollars as a free agent.

Unlike Owens, there was no mulligan for Northcutt and his agent, Jerome Stanley. The NFL ruled that Northcutt was still under contract to the Browns, who refused to trade him to Baltimore, a division rival. However, Northcutt recently signed a new 3-year, $9 million deal with the Browns (including a $2.2 million signing bonus) and everyone’s apparently prepared to live happily ever after

3. Washington Redskins linebacker LaVar Arrington claimed earlier this year that in the $68 million, eight-year contract extension he signed in December, 2003, the Redskins left out a $6.5 million bonus that he believes should be due him if he is still on the team's roster in 2006. According to a Washington Post report, Arrington claimed that his agents overlooked the omission under “deadline pressure” to sign the deal. Team sources refute the contention, saying that the Postons had more than ample opportunity to review the contract in draft form.

Whew. If your doctor or lawyer treated you like that, what would you do? You’d likely take some sort of legal recourse against the offending party…whatever was available, right? Yet Owens, Northcutt and Arrington all still swear allegiance to their agents. When I heard that, it finally dawned on me what the biggest problems with the concept of sports representation really are:

The players don’t know what their own agents are doing. The agents have no agents. The system seemingly has no checkpoints. And the reversal of such ludicrous representation is apparently unaided by any official governing body. Owens is an Eagle, Northcutt is a Brown, and Arrington still doesn’t know where his money is, or if he had a right to it at all. While he did file a grievance with the NFL Players Association in March, he must now await the ruling of an independent arbitrator.

Arrington’s aforementioned agents, the nefarious and notorious Poston brothers, could merit an entire article of their own. In fact, they have! In a March 28 piece for, Boston writer Bob George painted a scathing picture of the Postons in which it was detailed that clients such as Rams tackle Orlando Pace and Patriots DB Ty Law came out in the press and said that they’d take less money than their agents were demanding to stay with their teams (actually, Law’s recent turnabout may be more of a “plan B” implemented by the Postons to break a stalemate, according to George). Pace has made oblique noises about firing the Postons. Some teams have made oblique noises about refusing to sign or draft any player that the Postons represent.

Second and Short – The NFLPA’s Response
Goaded by such lunacy, the NFL Players’ Association is beginning to look into what can be done in the long term on two fronts – negligent agents and incompetent or fraudulent financial planners.

Gene Upshaw, the NFLPA’s Executive Director, said recently in the Washington Post that he believes the agents in the Owens, Northcutt and Arrington cases were indeed negligent. Upshaw said he expects some or all of those cases to be examined closely by the union's agent disciplinary committee and sanctions possibly imposed.

"I'm hoping there's not a trend going on, but we have seen an awful lot of mistakes," Upshaw said. "I am concerned because every time a mistake is made, the player is the one left holding the bag. . . . We have a discipline committee, and they will look at this. There will be some cases they take action on, no doubt about that. I usually don't get involved in that process, but I've been more involved than usual because so many players are losing so much money."

Buffalo Bills cornerback Troy Vincent, the new president of the Players Association and the head of the agent disciplinary committee, said the Owens, Arrington and Northcutt cases are "a major concern" to the union. "We are cracking down on those agents who are not living up to our standards," Vincent said.

Of course, we won’t really see the ramifications of this new “get-tough” stance until after the 2004 season, when free agent negotiations open the door to more potential dumbhead deals.

In 2002, the NFLPA also created its own internal Financial Advisors Program, which was created in response to some harrowing numbers regarding the more “freewheeling” money managers and their effects on the players they represented. From 1999 to 2001 alone, it’s estimated that at least 78 players were defrauded for over $42 million in lost earnings. Currently, the program has hundreds of financial advisors in its ranks. To qualify, a prospective financial planner must pass a stringent screening process, be registered with the SEC, and have a sanction-free history.

While the Program is voluntary for financial advisors, it is mandatory for agents. Under the NFLPA’s regulations governing agents, every agent must refer their player-clients only to financial advisors who are registered in the Program - or risk decertification or other disciplinary sanction. Similarly, any agent providing financial advice must also be registered in the Financial Advisors Program, and the agent is subject to the very same screening process.

There is life after football…
Governance of those who are allowed to assist NFL players in planning their futures is crucial on many fronts – not only to prevent the obvious negligence or theft that has created so many horror stories over the years, but also to help players understand that there is life after football, that it may be coming sooner than they think, and that the “play every game like it’s your last” credo needs to apply to their financial lives as well. Unfortunately, many players just don’t see the need for wise future planning.

In a recent Associated press story, Vincent put forth the proposition that many players lack time for developmental programs, education or retirement planning. He claimed that due to off-season training schedules and minicamps, players “weren't able to prepare themselves when they were playing," he said. Vincent also revealed that the NFL offices field an alarming number of calls from ex-NFL players looking for jobs.

While his advocacy is laudable, Vincent might be barking up the wrong tree when he says that players spend too much time preparing for on-the-field action to deal with “real life” – the fact is that professional football is a game that requires year-round preparation in order to stay competitive, and this will not change. In truth, the smart athlete is working two jobs - preparing for the future is a second career, and must be treated as such.

Third and Long – Planning For The Future

Ray Eads, a Seattle-based Registered Investment Advisor with over 35 years of experience in money management, is a founder of the Proactive Group, a firm which specializes in financial planning for sports and entertainment figures.

A member of the NFLPA’s Financial Advisors Program since its inception in 2002, Eads says that the primary issue is often one of perception. “It can be very difficult to convince a 22-year-old kid who just received a multi-million-dollar signing bonus that he really needs to focus on his future beyond what will most likely be a very brief athletic career. That $100,000 car he wants to buy…if he takes that money and invests it in a growth portfolio with a modest rate of return, that $100,000 can turn into $1 million by the time he’s 50, and it will be far more important that the 50-year-old man have the income from the $1 million than it was for the 22-year old to own the fleet of cars. The importance of money invested over time needs to be brought into sharper focus.”

Eads defines a diversified growth portfolio as a multi-faceted investment tool that, if established wisely, can secure the future that many athletes don’t yet see a need for. “This kind of investment portfolio is often a wise mix of conservative and aggressive investments that can include bonds and stocks, as well as annuities, real estate and possibly the establishment of a business”, he notes.

The goodwill and name recognition that a professional athlete can create during a successful career is a rare and extremely valuable currency of its own, but just like on the field, advantages must be acted upon in a timely fashion. “The establishment of a smart business model is especially important during the player’s career, because the athlete then has his financial life set up after sports. This gets him thinking about the road ahead.”

Eads echoes the cautions of many other financial planners when it comes to advice from the well-intentioned but unqualified family member or friend (not to mention the “sharks” that seem to emerge from everywhere when one is young, rich and visible), and he also stressed the need to avoid the over-aggressive “boom-or-bust” investments from any source. “This is so often where entire fortunes are lost”, said Eads. “When young athletes are approached with the idea that their ‘nominal investment’ can pay enormous dividends, that’s a real danger sign, and this is where independent, expert, professional advice is so very important.”

“This sort of planning can benefit the player’s agent as well”, noted Eads. “The player may be asking his agent, ‘How much can you get for me?’, but the real question over the long term should be, ‘How much money did your clients have when they retired?’ The responsibility falls back to the agent to guide his clients to the right people – if he fails to do this, the repercussions could be severe over time.”

With an increasingly hungry media, not to mention the recent Owens, Northcutt and Arrington cases, agents could well find themselves tried in a forum they’re not used to – the court of public opinion. “In the past, a duplicitous agent was only embarrassed if the media became involved”, Eads suggested. “With increased awareness, agents would do well to market themselves as the voice of responsibility – but that line is only meaningful if it is lived up to.”

Such huge paydays (even if they’re well-managed) will be nothing but a pipe dream for most NFL players. For every Kurt Warner, Jake Delhomme and Adam Vinatieri who inspires with an “NFL Europe to the Super Bowl” tale, there are many more who will never rise above the league minimum salary for their tenure, play a very short time in the NFL (average NFL career – 3.2 years) and possibly find Europe to be a last resort as opposed to a training ground. Then there are the kids who will just get flat-out cut in their first camp, never to be heard from again. The odds make preparation for a future outside of football even more crucial for the “on the bubble” guys.

Fourth and Goal - The Unthinkable Truth
“Sudden death” may be football terminology for overtime, but it’s also occasionally a tragic fact of life for which there is no “fifth quarter”. The family of Derrick Thomas knows this all too well. Thomas, the former perennial All-Pro Kansas City Chiefs linebacker, died in February, 2000 as a result of complications from a car accident in which he broke his neck and was paralyzed from the waist down.

Although renowned for his tremendously giving nature and endless charity work, Thomas had no will when he died, touching off a long tug-of-war in the probate court of Jackson County, Missouri. His heirs included his seven children by five women, none of whom Thomas married. The mothers, who wanted Thomas' personal possessions for their children, were limited to $3,000 per child by the court. In March, 2001, Thomas’ family held a two-day estate sale, opening up his former house to Chiefs fans and memorabilia collectors who wanted to buy pieces of his career. The Kansas City Star reported at the time that while Thomas earned $34 million in salaries and endorsements during his 11-year career, he left an estate that one attorney described as "borderline solvent."

Glenn Price, managing partner of Price & Farrington, an estate, tax, and retirement planning law firm in Seattle, succinctly addressed the future faced by the families of “financially secure” athletes who fail to plan: “Disaster. Financial loss. Unintended heirs. Unnecessary taxes. Lost planning opportunities. A default ‘estate plan’ conjured up by your state legislature through its laws of intestate succession. To have no plan is a losing game plan.”

Price went on to say that “The most talented running back can’t execute a successful play without timely, organized, well-planned blocking. This is exactly how the young, talented, successful athlete should think of his estate plan and his estate planning team: as the play diagrams that will secure a series of first downs during his life.”

When asked if the perceived complexity of planning for a large estate might be a factor in the lack of its implementation, Price pointed to the comprehensive protection such a plan can provide. “It’s a ‘problem’ the rest of us less advantaged folks would like to have: the need – and ability -- to design a comprehensive plan that addresses a broad combination of issues that reflect the client’s goals, circumstances, hopes and fears. A common and dangerous misconception is that estate planning is limited to death planning. This causes people of all ages – especially the young – to neglect doing it.”

And lest you think that these issues only affect the young, consider that when Joe Robbie, the founder and one-time owner of the Miami Dolphins, died in 1990, his family was forced to sell the franchise to pay estate taxes estimated at $47 million.

Things are tough all over.

Discipline, Trust and the Paradigm Shift - How Can It All Work?
“Privately, an agent can be a father, a friend, an inspiring force in the life of a young man or woman. We are sometimes as important as priests or poets. But until we dedicate ourselves to worthier goals, we are poets of emptiness” – Jerry Maguire, “The Things We Think And Do Not Say”

In the end, it’s difficult to say whether there will be any positive aftereffects from the Owens, Northcutt and Arrington cases. No disciplinary action has been taken against the agents to date, and it would seem that until sanctions or suspensions are handed down from the NFL, there may be no motivation for agents to do their jobs except their own sense of professionalism. In some cases, that’s just a frightening thought.

However, the NFLPA Financial Advisors Program seems like a step in the right direction. With checks and balances in place, and the fact that agents must refer their clients to advisors in the program, players at least have some semblance of protection.

This is not to say that there still won’t be horror stories, nor that there won’t be players misrepresented. And if the example of Derrick Thomas and his family is not taken to heart, there will be more probate shenanigans, unintended heirs, and nightmarish taxes to pay when estate planning does not occur.

In the end, although agents and other advisors who don’t live up to their obligations deserve every bit of the bashing they receive, the final responsibility lies with the players, for it is only with the players that the paradigm shift can truly occur. The hard questions must come from them.

Who will tell them what questions need to be asked?

Doug Farrar is the Editor-in-Chief of, and a regular contributor to, Seahawks.NET. Feel free to contact him at Top Stories