BSLW6604 Lecture Notes - Lecture 10: Best Alternative To A Negotiated Agreement, Estate Planning, Tax Avoidance
8 Jun 2018
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1. Agency Relationship
a. Definition
i. Fiduciary responsibility between an agent who agrees to work for, and under the direction and
control of the principal
ii. Three Elements
1. Consent
2. On behalf of
3. Subject to the control of
b. Principal’s responsibilities
i. To compensation and reimburse
ii. To cooperate
iii. To provide safe working conditions
iv. To indemnify the agent
c. Agent’s responsibilities
i. Duty of loyalty/good faith
ii. Duty of performance
1. Reasonable care and skill
iii. Duty of accounting for funds and property
iv. Duty of obedience
1. Follow instructions
d. Breach of Fiduciary duty
i. Acting in a way that increases their compensation, perhaps at the expense of their client
ii. Conflict of interest that may force the agent to make decisions against their client’s interests
iii. Agent acts negligently
iv. Intentional harm/stealing
e. Functions
i. Determine value of player’s services
ii. Negotiate contract
iii. Shape the package to reflect player’s needs
iv. Health & physical training: preparation and consultation
v. Represent athlete on any law related issues
vi. Marketing and endorsements
vii. Personal appearances
viii. Financial and investment advice
ix. Tax planning and tax return preparations
x. Personal, legal, and financial counseling
xi. Liaison with press
xii. Estate planning
f. Compensation
i. NFL: 1.5% default, 3% max
ii. NBA/NHL: 4% max
iii. MLB: 5% max
iv. FIFA: 10% max
v. 10 to 33% on other contracts (endorsements)
g. Significant Litigation
i. Agent vs. Agent (over clients)
ii. Union vs. Agent (over certification/decertification)
iii. Athlete vs. Agent (fees, poor representation)
Negotiation
1. Terminology
a. Positions (people involved)
b. Interests (what people want)
2. Long term stability and quick resolution
a. BATNA: best alternative to a negotiated agreement
b. ZOPA: zone of possible agreement
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