A New View of Athlete Agreements

Published May 7, 2006

In a recent issue of the newsmagazine The Lawyer's Weekly, we wrote about the changing landscape of sport as we move rapidly toward the 2010 Olympics in Vancouver. We observed that sport in Canada has taken a decidedly commercial turn as the Canadian Olympic Committee, the local Olympic organizing Committee, national sport federations and Canadian corporations jockey for sponsorship, marketing and advertising turf relating to these games.

At the root of this commercial mix is the athlete, whose value is his or her image over which, at the outset at least, the athlete has complete ownership. Nonetheless, many sport organizations are adept at leveraging this asset to their own benefit by forging commercial relationships with their athlete members and in turn, using the athlete’s visibility to forge marketing relationships with sponsors and others. The rationale for pursuing such integrated marketing enterprises is that sport organizations provide direct and indirect support to athletes by financing coaches, trainers, medical staff, training camps, equipment, travel and accommodation, and competitive opportunities. These are costly ventures that make it possible for a small number of highly visible athletes, and a host of anonymous amateurs, to have a public profile in the first place.

The vehicle for establishing this commercial relationship between the athlete and the sport organization is the Athlete Agreement. This agreement originated decades ago as a way to formalize the terms and conditions of the government's Athlete Assistance Program (AAP), a funding program that provides modest stipends to athletes to offset training costs. Originally, these agreements specified the respective obligations of the athlete and the organization and addressed details such as conduct matters, compliance with rules of the organization, training commitments and reporting expectations. The obligations were very clear and the Agreements were transparent. Historically, coaches played a vital role in determining which athletes deserved assistance based on merit, and thus which athletes would execute the Athlete Agreement.

More recently however, and depending on the sport and its commercial appeal, these standard-form agreements have evolved into full-fledged commercial contracts exceeding 75 pages in some cases. The typical Athlete Agreement now also includes complex commercial transactions relating to the athlete's publicity and image rights, and how these can be leveraged by sport federations, sponsors and host committees. In some cases athletes are asked to forfeit certain rights in perpetuity. Not surprisingly, few athletes have the knowledge or the financial capacity to negotiate a commercial contract, but they are told explicitly by their federations (and implicitly by the government of Canada, which requires the Athlete Agreement as a condition of funding) that they need to sign these agreements to obtain their much-needed AAP financial support.

So, continuing in the same historical perspective, what is the purpose of the AAP and of the Athlete Agreement? As mentioned above, the AAP provides modest monthly stipends to athletes in addition to relief from paying college or university tuition fees (either while the athlete is carded or afterwards). The seeds for the program were planted over 35 years ago, in 1970, when promising athletes were given small annual stipends to help with their training. In contrast, last year the AAP allocated almost $20 million to over 1,500 individuals, an amount that represented just over 16 percent of Sport Canada's total contributions to sport in that year.

Understandably, the AAP represents significant investment and the government that funds the program is keen to ensure that the investment is properly protected. Thus, the Athlete Agreement was originally created in the 1980s to secure, through a contract, the athlete's commitment to intensive training and all that that entailed, including avoiding conduct that would bring sport into disrepute, abstaining from drugs and banned substances and methods, and living in a lifestyle conducive to achieving high performance results.

Over time, national sport federations added other conditions into the Athlete Agreement, including commitments to national team program and activities, requirements to report on training progress, compliance with the sport organization's administrative policies, adherence to anti-doping rules, and promotional appearances on behalf of the sport. More recently, as we now see, these Agreements include clauses relating to restrictions on athlete sponsorship, as well as ownership and licensing of the athlete's image and other personal attributes.

Over the years, we have been involved in a number of disputes over the allocation of AAP funds. These disputes have ranged from who deserves the card, to whether an athlete who has failed to fulfill the Athlete Agreement can have the card taken away, to whether a young athlete shows sufficient promise to warrant a development card. Coaches have been at the heart of these decisions, and the ensuing disputes, appeals, mediations and arbitrations have revolved around the coaches’ discretion to make decisions about athletic performance that are essentially technical in nature.

So how did a decades-old written agreement linked to a funding program become the commercial contract that now exists between most Canadian sport federations and their athlete members – a contract that in turn enables sport federations to enter into complex commercial transactions with private interests? It may be that the Athlete Agreement should serve the purpose for which it was intended – a “to-do” list for the athlete who earns a training subsidy from the Canadian taxpayer. Possibly it should not serve as a platform for the negotiation of commercial contracts between and among athletes, sport organizations and corporate sponsors, none of which have anything to do with government funding to improve athletic performance.

It is also possible that separating AAP funding and commercial contracts could be beneficial for all parties. The simple act of dealing with complex commercial matters separately could go a long way towards creating a situation where the athlete and the sport federation could negotiate an appropriate balance between their competing, yet ultimately complementary interests: the legal right of the athlete to exploit his or her image, and the legitimate need of the sport system to generate revenue to support athlete programs and opportunities.

Originally published: Coaches Plan (2006) Vol. 13(2)