The FTC Blows the Whistle: First-Ever Enforcement Inquiry into College Sports Agents Under SPARTA
In 1987, the National Collegiate Athletic Association (NCAA) imposed the so-called "death penalty" on Southern Methodist University, canceling SMU's football season, all because boosters had the audacity to pay players. Today, those same payments are not only permissible, but they are also featured in press releases.
Welcome to the era of Name, Image, and Likeness (NIL). As money flows into increasingly lucrative NIL deals, a pressing question has emerged: who oversees the sports agents representing these athletes? On January 12, 2026, the Federal Trade Commission (FTC) launched its first inquiry into sports agent conduct under the Sports Agent Responsibility and Trust Act (SPARTA), sending letters to 20 NCAA Division I universities requesting information about compliance with SPARTA's disclosure and notification requirements. This inquiry marks a potentially transformative shift in federal oversight of college sports.
The NIL Landscape and NCAA v. Alston
The college athletics landscape significantly shifted with NCAA v. Alston, 594 U.S. 69 (2021). The United States Supreme Court unanimously found the NCAA and its 1,100 member schools violated the antitrust laws by limiting education-related benefits. Justice Kavanaugh's concurrence from the Alston case, which was critical of the concept of "amateurism" is widely cited in NIL policy debates.
In response, the NCAA modified its long-standing member school adopted rules, to allow college athletes to monetize NIL. Effectively allowing third-parties to directly compensate college athletes for use of their NIL. In June 2025, a federal court approved the colloquially known House settlement, named after one of the plaintiffs in In re Coll. Athlete NIL Litig., 803 F. Supp. 3d 959 (N.D. Cal. 2025), which included approximately $2.576 billion in damages and permits schools to directly compensate college athletes up to $20.5 million annually, for use of NIL. These shifts have fundamentally reshaped college athletics and dramatically increased the stakes for agent-athlete relationships.
With college athletes now commanding, in some instances, significant compensation for use of NIL from third-parties and colleges and universities, sports agents have evolved from preparing athletes for professional careers to managing complex NIL business relationships while still in school, making effective regulation more urgent than ever.
How Does SPARTA Fit into the New NIL Landscape?
In the post-Alston era, the number of college sports agents has grown substantially, along with the scope and value of agent-athlete relationships. Unlike professional sports, where agents must obtain certification from players' associations, no comparable regulatory regime exists for college athlete agents. While more than 40 states have adopted some version of the Uniform Athlete Agents Act, enforcement has been uneven, and many state statutes contain eligibility-related requirements inconsistent with the current landscape. The FTC's use of SPARTA signals that federal authorities may be preparing to fill
this gap.
Enacted in 2004, SPARTA is a federal consumer protection statute designed to shield student-athletes from unscrupulous agents who used secret payments, unrealistic promises about draft potential, and considerable arm-twisting. Although the NIL changes have altered the nature of some concerns, improper agent conduct remains a significant risk, particularly given the large sums of money now
at stake.
SPARTA prohibits four specific acts: (1) providing false or misleading information to recruit student-athletes; (2) furnishing anything of value to a student-athlete or anyone associated with the athlete before contract execution; (3) failing to provide required pre-contract disclosures; and (4) pre- or post-dating agency contracts. Agents must also notify the athlete's school within 72 hours of executing an agency contract. Arguably, some provisions, particularly those requiring agents to warn athletes that they may lose eligibility upon signing with an agent, are now outdated post-Alston and House. Because signing with an agent was historically grounds for NCAA ineligibility, SPARTA has been effectively dormant since enactment. The FTC's current inquiry, therefore, represents a significant departure, signaling that the agency views SPARTA as a viable enforcement tool for regulating agent conduct in the NIL era.
Does this Inquiry Signal Future FTC Involvement?
The FTC has requested information spanning all agency contracts from July 1, 2021 to the present, covering athletes across all sports. The letters request details about agent disclosures and notification timing, as well as copies of the contracts themselves, potentially exposing financial terms and conditions of agent-athlete relationships to federal scrutiny for the first time.
SPARTA treats violations as unfair or deceptive acts, with civil penalties of up to $53,088 per violation. States may also bring civil enforcement actions in federal court, and schools may pursue private claims against agents whose violations result in institutional harm, though student-athletes themselves lack a private right of action under SPARTA. If the FTC's inquiry reveals widespread noncompliance, the agency could pursue enforcement actions against individual agents or recommend that Congress modernize SPARTA for the NIL era.
The FTC's renewed interest in SPARTA may also prompt state regulators to revisit their own sports agent statutes and could generate referrals to enforcement authorities. Whatever the outcome, this inquiry shows that federal regulators intend to play a more active role in the NIL landscape.
Practical Takeaways for Sports Law Professionals
For sports attorneys advising agents, this inquiry should prompt an immediate compliance audit. Agents should review disclosure practices, confirm notifications to institutions are made within the 72-hour window, and maintain comprehensive records of all athlete contracts and related communications. Counsel for universities should assess whether compliance offices have adequate protocols to receive and track agent notifications. Finally, practitioners should monitor the outcome of the FTC's inquiry and any legislative efforts to modernize SPARTA: a statute drafted for a pre-NIL era that is now being tested against the realities of today's college athletics marketplace.
