- within Consumer Protection and Employment and HR topic(s)
FTC Puts Student-Athlete Representation Back in the Spotlight
The Federal Trade Commission (FTC) has sent a clear signal to the sports industry: Compliance with the Sports Agent Responsibility and Trust Act (SPARTA) is back on the enforcement radar.
This week, the FTC sent letters to 20 NCAA Division I universities asking whether the agents representing their student-athletes are complying with SPARTA's disclosure and notification requirements. While the law has been on the books since 2004, the agency's outreach to schools suggests renewed scrutiny as name, image and likeness (NIL) and athlete representation continue to expand.
What SPARTA Requires
SPARTA governs how sports agents may recruit and sign student-athletes. Among other things, it requires agents to:
- Provide athletes with specific statutory disclosures before entering into an agency contract
- Notify the athlete's school of the agency relationship within 72 hours of signing, or before the athlete's next competition, if sooner
- Avoid using misleading statements or false promises, or providing anything of value to the athlete (or anyone associated with them) before a contract is in place
These rules are designed to protect athletes and schools from undisclosed representation and improper recruiting practices, and they apply regardless of whether the relationship involves endorsement deals or professional sports contracts.
Why This Matters Now
With NIL and new ways of representing and recruiting athletes becoming more common, agencies are operating in a far more complex regulatory environment than when SPARTA was first enacted. The FTC's inquiry to these universities indicates that regulators are paying close attention to whether agent activity is being properly disclosed and documented.
Violations of SPARTA can carry civil penalties of up to $53,088 per violation, in addition to reputational risk with schools, conferences and governing bodies.
Nothing in the law has changed, but enforcement focus has. Agencies that represent student-athletes should take this moment to review their agreements and school-notification processes to confirm they align with SPARTA and related state NIL agent laws.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
