Litigation Risk and Regulatory Gaps in the Era of "Street Agents"

While the opportunity for revenue for athletes in the NIL era is unprecedented, so too is the risk of exploitation.

So-called "street agents" are on the rise.¹ As compensation opportunities for amateur athletes have expanded, so have the number of individuals seeking to represent them. These can be professional agents or they can be a family member, a friend, or just someone looking to profit from proximity to a great athlete. Some 'agents' operate as informal advisors; others negotiate endorsement agreements, coordinate collective payments, or position themselves as gatekeepers to recruiting and transfer opportunities. Critically, unlike professional sports agents, these NIL 'agents' are not subject to a uniform licensing regime, centralized discipline, or mandatory insurance requirements.

The growth of unregulated representation in college sports stands in sharp contrast to its professional counterparts. Players' unions regulate the agents of their respective sports pursuant to Section 9(a) of the National Labor Relations Act, which grants unions the exclusive right to negotiate with employers over the mandatory terms and conditions of employment, such as hours, wages, and working conditions.² To represent players in the National Football League, for example, an agent must be certified by the National Football League Players Association, meet eligibility standards, pass background checks, maintain liability insurance, and comply with detailed conduct rules.³ There is a centralized authority regulating agent conduct, and there are consequences for agent misconduct.

Existing State and Federal Frameworks Provide Limited Deterrence

At the amateur level, the regulation of agents is far less consistent. Oversight of athlete representatives is largely left to the states, supplemented by a federal statute enacted long before NIL existed.⁴ Most states have adopted some version of the Uniform Athlete Agents Act (UAAA) or its 2019 successor, the Revised Uniform Athlete Agents Act (RUAAA).⁵ These statutes generally require registration with state authorities, written contracts, specified disclosures (including criminal and disciplinary history), and notice to an athlete's educational institution upon entering into an agency relationship.⁶ At the federal level, the Sports Agent Responsibility and Trust Act (SPARTA) imposes disclosure requirements, prohibits materially false or misleading recruitment practices, and requires agents to notify institutions within 72 hours of signing a student-athlete.⁷ Notably, however, neither the RUAAA nor SPARTA provides an express private right of action to the aggrieved athlete. Steptoe discussed both SPARTA and the RUAAA in a recent Client Alert.

Both SPARTA and the UAAA were drafted for a pre-NIL environment focused primarily on intercollegiate contract procurement.⁸ The UAAA was drafted with the specific intent of deterring sports agents from inducing amateur athletes to sign professional contracts or accept money in violation of the NCAA's own internal bylaws—an irrelevant issue in the wake of the House Settlement;⁹ SPARTA was then drafted based on the UAAA's language.¹⁰ Importantly, neither statute addresses the range of advisory and marketing roles tailored to non-collegiate amateur athletes that now exist in the NIL marketplace.¹¹ In practice, the result is a patchwork regulatory system with meaningful gaps—particularly in jurisdictions that have not modernized their laws or actively enforced registration requirements.

Growing Liability Risks Amid Inconsistent Agent Oversight

Where unregulated intermediaries and lots of money are involved, disputes follow. When NIL arrangements unravel, the claims are often multi-directional. Student-athletes sue these 'agents' over commissions, conflicts, or alleged misrepresentations. The unregulated agents, in turn, sue athletes for breach. NIL Collectives seek repayment of funds tied to noncompliant deals. Institutions—facing eligibility issues or enforcement scrutiny—pursue indemnification or contribution from both agents and athletes. Once a deal is questioned, nearly every participant can be drawn into litigation.

Among these many risks, litigation is only one facet of the broader institutional risk created by this regulatory gap.

Compliance and governance risk. Institutions and collectives must manage third-party intermediaries whose authority, compensation structures, and contractual arrangements may lack transparency. Where an intermediary's conduct violates state law, SPARTA, NCAA guidance, or conference rules, scrutiny often extends beyond the individual actor.

Eligibility and enforcement risk. Improper inducements, undisclosed compensation arrangements, or conflicts of interest can trigger investigations and jeopardize athlete eligibility at both the high school and collegiate levels, even where the athlete has unwittingly followed the advice or endorsed the practices of his/her agent.

Financial and contractual risk. Student-athletes may enter agreements with aggressive commission structures, broad exclusivity provisions, or limited termination rights. Many unregulated intermediaries lack professional liability coverage or meaningful assets, limiting recourse if disputes arise.

Reputational risk. Allegations of exploitation or pay-to-play schemes can quickly become public, drawing media attention, donor concern, and legislative inquiry regardless of ultimate liability.

Structural tension. When athletes transition to the draft process, they must comply with certification requirements imposed by players' associations such as the NFL Players Association. Conduct and compensation arrangements formed during the NIL stage may complicate that transition.

Institutions should take a particularly proactive posture. In the absence of clear state and federal guidance, schools and affiliated collectives may wish to consider implementing their own practices and procedures, such as:

• Formal vetting procedures. Require disclosure of state registration status, disciplinary history, and any professional league or players' association certifications, and independently verify that information where possible.
• Clear NIL engagement protocols. Adopt written policies governing communications with agents and intermediaries, documentation requirements, and internal reporting obligations.
• Education and training. Provide periodic training to coaches, compliance personnel, and student-athletes regarding agent regulation, inducement risks, and notice obligations.
• Documentation and audit safeguards. Maintain contemporaneous records of vetting efforts, disclosures, and institutional guidance to demonstrate good-faith compliance.

The Case for Uniform Agent Oversight

As the NIL student-athlete industry continues to mature, pressure will likely build for more consistent oversight of those representing amateur athletes. A national registration or licensing framework—whether administered by the NCAA, the newly-established College Sports Commission, or developed through federal legislation—could establish baseline requirements for education, disclosure, insurance, and discipline. Properly designed guardrails would not impede legitimate marketing activity; they would reduce opportunistic behavior and provide clearer compliance standards for schools, collectives, and athletes alike.

The NIL marketplace has unlocked significant economic opportunity. Ensuring that it develops with durable compliance infrastructure will be essential to protecting athletes, institutions, and the long-term stability of the system. Steptoe is advising stakeholders on governance structures, contractual safeguards, and risk-mitigation strategies in this evolving landscape.

¹ Paula Lavigne, 'Street agents' exploiting athletes in NIL deals, coaches warn, ESPN (Feb. 23, 2026), https://www.espn.com/college-football/story/_/id/47976859/street-agents-exploiting-athletes-nil-deals-coaches-warn.

² See National Labor Relations Act § 9, 29 U.S.C. § 159(a) (2012); see also Black v. Nat'l Football League Players Ass'n, 87 F. Supp. 2d 1, 2 (D.D.C. 2000)

³ How to Become an Agent, NFL Players Ass'n (2026), https://nflpa.com/agents/how-to-become-an-agent (last visited Feb. 23, 2026).

⁴ See, e.g., Miller-Ayala Athlete Agents Act, Cal. Bus. & Prof. Code §§ 18870–18877 (protections and registration requirements for athlete agents in California; restricting unauthorized agent conduct).

⁵ UAAA Laws in the 50 States, NCAA (2026), https://fs.ncaa.org/Docs/ENF/UAAA/map/index.html (last accessed Feb. 23, 2026) (providing a state-by-state overview of Uniform Athlete Agents Act adoption and related agent-regulation laws).

⁶ Revised Uniform Athlete Agents Act (2015) (Last Amended 2019), Nat'l Conf. of Comm'rs on Unif. State Laws (2019).

⁷ Andrew Chung, Regulating Sports Agents in the NIL Era: What Colleges, Agencies Need to Know, Reuters (Feb. 9, 2026), https://www.reuters.com/legal/legalindustry/regulating-sports-agents-nil-era-what-colleges-agencies-need-know-pracin-2026-02-09/ (last accessed Feb. 23, 2026).

⁸ 15 U.S.C.A. § 7801(9).

⁹ The RUAAA, also enacted prior to the House Settlement, preserves the intent of the original statute.

¹⁰ Marc Edelman, Disarming the Trojan Horse of the UAAA and SPARTA: How America Should Reform its Sports Agent Laws to Conform with True Agency Principles, 4 Harv. J. Sports & Ent. L. 145, 169, 177 (2013).

¹¹ See, e.g., 15 U.S.C.A. § 7801(2) (defining "athlete agent" as "an individual who enters into an agency contract with a student athlete, or directly or indirectly recruits or solicits a student athlete to enter into an agency contract, and does not include a spouse, parent, sibling, grandparent, or guardian of such student athlete, any legal counsel for purposes other than that of representative agency, or an individual acting solely on behalf of a professional sports team or professional sports organization.")