Duties Of An AFL Player Agent: An Analysis Of Fiduciary Obligations

Fiduciary Duties of an AFL Player Agent to an AFL Player

Discuss about the Sports Law for Adam and Taylor Fiduciary Duties.

In the Australian Football League (AFL) mostly all players are managed by player agents. In the contemporary period it is not easy to find a player in the AFL who is not managed by an agent. The AFL constitutes big business and in light of the fact that the players laying in the league have a very short career they try to maximize their income during the time they are associated with the league. These players have to live a busy life as not only they have to ensure  their competency for the game but also have to handle media, sponsorship, financial management, advertising and public relations. They also have to from time to time indulge in dispute resolution with the management with respect to their playing contract. The handling of these contracts which a player gets into during the time they play in the league requires financial, commercial and legal expertise which evidently the players do not possess. Thus they appoint agents to look after their contracts. These agents have a fiduciary relationship towards the players. The agents have a duty of undivided loyalty towards their clients as fiduciaries. Thus it is the legal and ethical duty of the agent to put the interest of the client at priority subjected to a few exceptions. However the fiduciary relationship between the agent and the player sometimes creates difficulties and may result in a situation of conflict of interest where the agent manages more than one player of the same league.           

The purpose of the paper is to critically analyze the duties (including fiduciary duties) which an AFL player agent owes to an AFL player. The paper throws light upon the legal duty of undivided loyalty which an agent has to a player in AFL and which is jeopardized when the agent acts for more than one player and gives rise to a conflict of interest position.

The primary duty of a player agent is that of handling various matters which arise during the football career of the player. These include the duty of representing the player in negotiations towards football contracts with the club and therefore having a direct effect on the relationship of the players with the club. It is also the duty of the agent to handle sponsorships and public relations with respect to the players. They also have to look after the guidelines of the collective bargaining agreement which is established between the AFL player association and AFL. The agents may also be involved in handling less obvious areas of the players such as Tax, investment counseling and financial planning. However the primary duty which the agent has of negotiating terms of the contract between the player and the club. All agents have to get AFLPA accreditation through which they acknowledge their fiduciary duties towards the players[1].

Conflict of Interest and its Implications for Player Agents

According to Lewis, Adam, and Taylor fiduciary duties are those duties of loyalty and good faith which is owed by a person in a fiduciary relationship to others because of the reliance and trust placed by the other persons on them[2]. Thus an agent owes fiduciary duties towards the principles as they place great deal of trust and confidence on them[3]. Therefore the existing relationship between the players and the agents makes the players the principal and the player agents the agent. The player agents therefore by the operation of law owe a fiduciary relationship to the players. One of the critical features in relation to a fiduciary relationship as provided by Mason J in the Hospital Products case is that the fiduciary acknowledges acting towards the best interest of the dependents[4]. The nature of the relationship between the agent and the principal provides adequate powers to the fiduciary to exploit those who have placed their trust on them. The other person is thus at the “mercy” of the fiduciary and evidently it is the obligation of the fiduciary to discharge their duties in such a way as they are in the best interest of the person. A duty of undivided loyalty is also owed by the fiduciary to the principle.

The agents of the AFL players have a fiduciary obligation towards the players as the players place significant trust on them in relation to the negotiations of contracts with their respective clubs and other responsibilities.

However, a fiduciary duty needs to be analyzed and cannot be said to be evidently present even in relation to the accepted categories (such as Lawyer-client or Doctor-patient). Determination of fiduciary duties is done through the help of analyzing any course of dealing, factual circumstances or subsisting agreement between the parties as provided in the case of News Ltd v Australian Rugby Football League Ltd[5]. It is the legal duty of the player agents to avoid any situation of a conflict of interest which may come up between the interest of the player and person interest. In case such a situation is identified it is the duty of the player agent to ensure that he prioritizes the interest of the player over personal interest. There may be coexistence of contractual and fiduciary relationship between the parties where the foundation of the fiduciary relationship is the contractual relationship. However fiduciary relationship has to be consistent to contractual relationship. In addition the fiduciary has an 'overriding duty of undivided loyalty' towards the principal[6].

Concurrent Duties of Player Agents to AFL Clubs

As highlighted by Shropshire, Davis and Duru the obligation of the agent to act in the best interest of one player may contradict with the obligation of the agent to act in the best interest of another player where he may be working for more than one player[7]. This situation is prominent in the AFL where 6 large agent organizations deal with most of the players playing in AFL. In this situation the duty of undivided loyalty is necessarily compromised by the agents as they are not able to properly discharge an obligation without contradicting with the other[8]. Here there is much relevance of the Biblical injunction of Matthew 6:24 which states 'No man can serve two masters.'[9]

There are a number of specific duties which 'overriding duty of undivided loyalty' provides to the fiduciary in relation to the principal. This is the duty of avoiding conflict of interest between personal and player interest and the duty to act in best interest of one player vis-à-vis another player. It is also the duty of the fiduciary to be accountable to the player in relation to any profit which has been made by him due to the position and information provided to him by the player through the agency contract[10]. Thus the player agent cannot make any authorized gains from the agency contract. In case the obligation is not complied with the agents have the duty of providing any additional profit to the player or to compensate them for their losses. The player agents although being entitled to receive commissions from the agency contract, cannot claim that it is not a breach to gain such commission unless the player knows or has authorized the receipt of the commission. As per Matthew et al., it is the duty to the player agents to obtain express consent or to let the players known about any additional commission received by them through the agency contract[11].

The agents also owe concurrent duties to the AFL player clients and AFL Clubs.  Although it does not occur generally there have been a few examples where it has been seen that an agent is acting for an AFL club in a consultative capacity[12].  Thus as the player agents have the duty of negotiating a contract on behalf of the players they cannot let the negotiation be affected by the relationship they have with the clubs where they act as consultants. Specifically, their obligation in relation to consultancy for the clubs must not result in less favorable outcomes for the players in relation their contracts with the clubs. Where the agent acts as a consultant for one club and is negotiating a contract for a player with the same club it is obvious that the duty of undivided interest is being compromised with. Another conflict may also obviously arise where the player agent may persuade the player to transfer from one club to another club for which he works as an agent. Although the transfer may be for the benefit of the player and for correct reasons there is an obvious situation of conflict of interest.

Negotiation of Player Contracts and Multiple Clients

The player agent also owe concurrent duties to all player clients in relation to the negotiation of player contracts. This is arguably the most important work which is undertaken by the agents in relation to the players. The players’ basic source of income is the playing contract they have with the club. When it comes to AFL all playing contacts are consists of standard term contract as provided through clause 18.1 of the CBA. As provided by Stephen et al., unless the player agent has obtained express consent from the player client he does not have the right to act for another player where there may be a chance for conflict of interest[13]. This does not mean that the agents do not have the right to act for more than one player. This simply signifies that the agent is not allowed to act for two players where the acting for both the players will prompt a conflict between the interests of one player with the interest of the other player. For instance this situation may take place where two players have authorized only one agent to deal with a club where only one of the players can take the desired position. Thus whether there is conflict of interest or not in this situation depends upon the circumstances of the multiple players and the agents. However as stated by Lord Cozens-Hardy in circumstances where a conflict of interest arises, it is the duty of the agents to decline from acting ins situation where the fiduciary duties may be violated[14]. The agent would be held to be in the breach of fiduciary duties where there is a clear conflict and no informed consent or prior agreement with the players whose interest may be in a conflict situation. There is no defense of not having a fraudulent intention in these circumstances which an agent may rely upon.

The AFL is a not only a football league but also a serious business and source of income. The income which players earn from the league is the primary source of income for most players. Thus it is the right of the players to expect loyalty from those agents upon whom they have placed their trust and confidence and who owe them a duty of undivided loyalty. The players also have to right to expect that the agents would abide by such trust and duties by giving primary importance to the interest of the players. The players have to demand adherence to and be aware of the duties which is owed by their agents to them. Merely because the agents have received accreditation from the AFLPA, the players cannot ensure that they will not violate their duties owned to the players whether in a deliberate or innocent manner. It is the right of the players to at the very least get disclosure in relation to the activities in which the agents are indulging and which have the potential of undermining their personal interest and deviate from the duty of undivided loyalty which is owed by them to the players generally at law. There are requirements of disclosure which is imposed in by the AFLPA on the agents. However the degree to which AFLPA ensures and scrutinizes the adherence of the requirements by the agents has always been in question. The primary question however is what remedy the players can avail when the agents have violated the duty of undivided loyalty owed to the players by them. One of the possibilities is that of the court processes and other equitable requirements. The AFLPA may also use its powers to revoke the accreditation of the player agents. These possibilities have the potential of having significant ramification to the AFL industry and therefore require future examination.

AFLPA Regulations Governing Accredited Agents (Melbourne: AFL, 2005) cl 3 'Accreditation'.

Beuch Petroleum 1VL 1, Kennedy (1999) 48 KSWLR I, Spigelman CJ, Sheller & Stein JJA 46.

Breen v Williams (1996) 1x6 CLR 71. Gummow J J 135; Commonwealth Bank of Australia v Smith(1991) 42 FCR 390, 392.

Chan v Zacharia (1984) 154 CLR 178, Deane J 198-199

Hospilal Products Ltd v United States LSurgical Corporation (1 984) 156 CLR 4 1, Mason J 96-97.

Le Grand 'Ron of All Trades Says He's No Saint' The Australian, 8 October 2001, 28.

Lewis, Adam, and Jonathan Taylor. Sport: law and practice. Bloomsbury Professional, 2014

Moody v Cox and Hatt [I917] 2 Ch 71

 New Zealand Netherlands Society 'Oranje ' Inc I. Kuys [I 973] 1 WLR 1 126, 1230- 1231.

News Ltd v Australian Rugby Football League Ltd above n 3, Lockhart, von Doussa & Sackville JJ 539.

 News Ltd v Australian Rugby v Football League Ltd (1996) 64 FCR 410, 538: 'Business relationships (leaving aside Partnerships) clearly can attract fiduciary obligations.'

Ross, Stephen F., et al. "Sports and the Law: Text, Cases, and Problems, 5th." (2015).

Shropshire, Kenneth L., Timothy Davis, and N. Jeremi Duru. The business of sports agents. University of Pennsylvania Press, 2016.

Xiaoyong, T. A. N., and Sports Law Center. "Paths of Sports Autonomy in the Context of the Sports Governance by Law." Journal of Shanghai University of Sport 1 (2016): 007.