The U.S. Court of Appeals for the Fourth Circuit has ruled in favor of Zion Williamson in his lawsuit against his former marketing agency, Prime Sports Marketing. The case primarily dealt with the North Carolina Uniform Athlete Agents Act. While most states have implemented a version of the Uniform Athlete Agents Act (including North Carolina), the laws do not come under judicial scrutiny frequently. As such, this case provides important context and guidance for athlete agents going forward. 

Procedural History 

Williamson filed the lawsuit in federal court, seeking a declaratory judgment that Prime and its agents violated the North Carolina Uniform Athlete Agents Act and that his contract with Prime was void. Prime counterclaimed, seeking $100 million in damages from Williamson for breaching their agreement. The district court ruled in favor of Williamson. It found that he was a protected “student-athlete” under North Carolina law and that Prime had violated the Act. Prime appealed the district court’s decision to the Fourth Circuit. 

Key Facts 

Gina Ford—Prime’s agent who inked the deal with Williamson—was not registered as an athlete agent in North Carolina when the contract was signed. Moreover, the contract did not contain the correctly formatted warnings and disclosures required by the North Carolina Uniform Athlete Agents Act. The five-year contract was signed shortly after Williamson had declared for the NBA draft. A month after signing the agreement with Prime, Williamson terminated the contract. He then signed a marketing representation agreement with CAA, who also represents him as a player agent. 

The Court’s Holding 

Zion Williamson was, at the time of the contract signing, a student-athlete eligible to be protected by the North Carolina Uniform Athlete Agents Act. Because Prime failed to comply with the requirements of the Act, the contract it signed with Williamson was void. Moreover, while Williamson may have violated some NCAA rules at some point, he was not “permanently ineligible” to participate in NCAA competition as Prime had argued. The court declined to assume what the NCAA might have done in determining Williamson’s eligibility if it was presented with that decision. 

Why it Matters

Although much has changed in the college athletics landscape since Zion Williamson signed the contract in question with Prime, one thing notably has not: state and federal athlete agent laws. While the NCAA and state NIL laws have allowed college athletes to sign marketing representation agreements with agents and maintain their collegiate eligibility, agents still retain the same restrictions and requirements that were previously in place.

Takeaways for Athlete Agents

• In most—but not all—jurisdictions, “player agents” and “marketing agents” are treated the same. Registration is typically required, and contracts typically must meet certain requirements.
• Ultimately, it does not matter what the agent calls themself: player agent, NIL agent, athlete agent, sports agent, marketing agent, brand advisor, marketing consultant… etc. What matters is what they do for the athlete. “Negotiating” or “soliciting” endorsement deals on behalf of an athlete is usually enough to trigger the registration and disclosure requirements.
• Failure of an agent to register and meet the state athlete agent act requirements can result in a contract being void or voidable. This leaves all the power and flexibility in the athlete’s hands.
• Even though Williamson’s case stems from a contract that was signed before NIL rules went into effect, the same athlete agent laws are in place. The last update to the UAAA was in 2019, prior to the NIL era.
• Being registered in one state does not mean that an agent does not need to register in another state. Most agents likely must register in more than one state. Moreover, some state laws have differing requirements from other states.
• Failing to meet the requirements of a state athlete agent act is not limited to a void representation agreement—most of the state laws include civil and criminal penalties, such as a fine and jail time.
• For professional athlete “player agents,” there are typically uniform representation agreements that are required by the unions. Marketing agents and “NIL agents” do not have uniform contracts to use. Thus, compliance with athlete agent laws is even more critical. 

Click here for more information on the legal implications for NIL agents. Consider working with experienced counsel for assistance with drafting agency representation agreements and to ensure compliance with athlete agent laws.