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Why is a Texas Athlete Agent Bond Required?
The surety bond requires that the principal satisfies all obligations, duties and responsibilities under the Texas Statute, Chapter 2051, Occupations Code, pay any administrative penalties under subchapter J, Chapter 2051; and pay damages awarded to an institution of higher education or to an athlete as a result of the agent offering or providing a thing of value to an athlete or family member of the athlete. Any party injured by principal’s failure to meet the conditions of the bond may bring an action based on the bond and recover against the bond. The aggregate liability of surety company shall not exceed the amount of the bond.
Athlete Agent Bonds And Getting Your Texas Business License/Registration
Before an athlete agent can recruit or solicit an athlete to enter into a financial services contract or a professional sports services contract, the athlete agent must secure a certificate of registration from the secretary of state. Texas athlete agents are governed by the Texas Occupations Code, Chapter 2051 along with the administrative rules set forth by the Secretary of State in Title 1, Chapter 78 of the Texas Administrative Code.
“Athlete” is defined by the state of Texas as an individual who is eligible to participate in intercollegiate sports contests as a member of a sports team or as an individual competitor in a sport at an institution of higher education; or has participated as a member of an intercollegiate sports team or as an individual competitor in an intercollegiate sport at an institution of higher education and has never signed an employment contract with a professional sports team.
Texas defines athlete agents into two categories; professional and limited. Professional athlete agents must be certified by at least one national professional sports association, such as the National Football League Players Association, National Basketball Players Association, Major League Baseball Players Association, National Hockey League Players' Association, or United States Soccer Federation. Limited athlete agents are not required to be certified by a national professional sports association, but may only represent an athlete in a sport that does not have a national professional sports association that certifies or licenses agents.
Once registered, the athlete agent has several ongoing responsibilities including; knowing the applicable law and being truthful and complete in all dealings as an athlete agent, timely filing with the secretary of state, maintain a surety bond to act as an agent, and, if applicable, to enter into financial services contracts, filing annual registration renewals, providing notification of any criminal convictions for offenses other than Class C misdemeanors or decertification by a national professional sports association, retaining and permitting inspection of records, and disclosing required information to related parties as mandated by the secretary of state.