The Life of a Sports Agent

Part I. The Life: What Does a Sports Agent Do?

Key Topic: Discussion of What a Sports Agent Does, an Agent’s Responsibilities, and an Agent’s Daily Tasks

What Does a Sports Agent Do?

A sports agent is an advocate, facilitator, marketer, or a person that acts on behalf of his or her client(s). Whether it is negotiating a player contract, marketing agreement, or barter agreement with a car dealership, a sports agent is a sales person, negotiator, personal assistant, teacher, coach, surrogate family member, or anyone acting on behalf of a professional athlete to negotiate his or her dealings.

A sports agent acts as a sales person on behalf of each respective client because the agent is constantly selling each client to brands, companies, agencies, and partners to form synergistic relationships that will benefit clients both financially and professionally.

As an advocate, a sports agent always wants what is in the best interest of each client. Sometimes clients can be motivated by outside forces or people outside of their inner circle, and it is up to the agent to steer clients in the right direction for what is best for the clients.

As a negotiator, a sports agent needs to be able to play a little hard ball, if necessary, to generate a result that is in the best interest of each client.

The personal assistant role of a sports agent has to do with attention to detail and follow-through. The agent needs to remind each client of how to act, and even in some cases, what to wear for important meetings and appearances. The agent needs to double check meeting times and locations and communicate these to the client, and in some cases, arrange transportation and stay on top of the client.

Being a teacher and a coach for clients comes with the territory of being a successful sports agent. Clients look up to the agent for guidance. Clients also know that the agent, as the teacher, has more experience and has already gone through many of the things that clients will be dealing with.

Finally, acting as a surrogate family member, the agent may be one of the most trusted people in the client’s life. The agent may know more about the client than even a spouse. Therefore, it is important that while the agent maintains a professional relationship with each client, the agent also understands that he or she may become someone clients lean on not only for business purposes but also for personal purposes.

Typical Daily Tasks of a Sports Agent

Checking in on clients is a daily task so that the agent always knows how each client is feeling, what each client is doing, and where each client is located geographically in case last-minute opportunities come up.

Finding sponsorship and endorsement deals is another daily task of the agent because this is a major source of revenue for not only clients but also for the agent.

As the quarterback of management of services between the client’s financial manager, the agent is overseeing transactions and stays abreast of financial adjustments or decisions, including who is being hired or terminated at times.

The agent sometimes also serves as the daily accountant—checking on payments, accounts receivable, and any other current or future assets that are a part of each client’s life.

The daily tasks related to being the client’s personal assistant include the previously mentioned responsibilities. These are tasks that need to be done daily to keep the agent on top of his or her game and encourage the client to count on the agent for any and all needs.

Even though a sports agent is not always necessarily a lawyer, there still are many similarities between the two. A sports agent has to deal with negotiating and representing each client by understanding a league’s very complex collective bargaining agreement, that is filled with language mostly based on interpretation. The sports agent needs to navigate through this long complex legal document in order to ensure that his or her clients have their full rights being represented throughout their contracts and careers. An agent has to represent each client in his or her best interest, and advise each client based on the agent’s knowledge of the collective bargaining agreement and league in the same way a lawyer would advise or represent his or her client with the lawyer’s knowledge of the law.

A sports agent wears many hats, and one of those is being an advisor to managing other parts of the agent’s clients’ off-the-field lives. Even if a sports agent is a lawyer, the agent most likely will not be certified in the state where the client is domiciled and/or be practicing the same law that a client might need to be represented in. For example, if a client is in need of a tax lawyer in New Jersey, and his or her agent, who is a lawyer, has only passed the bar in California, then the client will need a tax lawyer in New Jersey. A sports agent should help guide clients in the process of choosing the right lawyer, in order to make sure that clients choose the right one and don’t find themselves in need of more legal help.

While going to law school before becoming a sports agent may benefit an individual, in regards to being able to understand contract law, it is not a necessity.

Each day, the agent will be actively searching to find appearance, endorsement, and sponsorship deals and ways to get the client in front of his or her ideal audience.

Autographed memorabilia is one of the oldest forms of off-field money for an athlete to find opportunities in. While this industry has still seen tremendous growth with the various companies that specialize in the distribution of player memorabilia, especially with the Internet, guidance is still required to maximize these opportunities. Sports agents need to be able to negotiate with companies in order to find the best deals for their clients. It is important that all details are written down on paper, and a proper contract is produced in order for the athlete to work with the memorabilia company. Agents also need to make sure that their clients fulfill their end of the bargain in autographing and/or supplying the memorabilia, because it is important to not lose a deal because of responsibilities being ignored. The agent needs to facilitate the communication between the two parties, to make sure the deal is done, just like in any other aspect of a client’s career.

Lastly, each day, the agent may be dealing with family issues related to the client. Professional athletes may have occurrences like deaths, divorces, and disputes within their families that could have a negative impact on them mentally. A sports agent is not just trusted with his or her clients’ careers, but in many ways, their lives. So with that perspective, an agent needs to be able to help each client work through these issues and do everything in his or her ability to make sure this does not affect the work of the agent.

A sports agent handles a professional athlete’s career both on and off the field. Through a sports agent’s network of contacts in the professional sports world, the agent is responsible for guiding athletes in their careers. This pertains to a number of responsibilities including, but not limited to, contract negotiations, draft preparations, marketing, and free agency. An agent is often on the go to visit with clients, prospective clients, team officials, and brand company representatives. An agent needs to tailor his or her services individually to each respective client, as each athlete comes with different strengths, weaknesses, and obstacles. Over the past few decades, marketing has become more and more a part of the sports agent profession in order to secure off-field dollars.


Part II. Who Are the Major Players in the Field Today?

Key Topic: A Breakdown of the Industry and the Major Representation Firms

Breakdown of the Sports Agent Industry

The evolution of the sports agent has changed rapidly over the years—now there are sports agents for athletes in virtually any respective sport: baseball, basketball, football, hockey, soccer, tennis, golf, motocross, action sports, cricket, Olympic athletes, coaches, auto racing, and video games. You name it, and there is an agent for it. As such a diversified group of individuals, agents can choose to specialize in one sport, multiple sports, specific types of athletes, specific levels of athletes, and even handpick athletes they hope to represent and brand themselves as agents known for handling specific deals.

Examining the Evolution of the Sports Agent Industry

In one of the first early examples of player representatives entering the sports industry, legend has it that Green Bay Packers Coach Vince Lombardi’s offensive lineman, Jim Ringo, entered his office with a gentleman in a suit, when it came time to negotiating his contract with the team. The story is told, that when Ringo explained that the gentleman was there to help him negotiate his contract, Lombardi excused himself to make a call. When he came back, he explained that there was some confusion, and that Ringo was now playing for Philadelphia (meaning he was traded).

It was not until the early 1970s, when the extensive use of reserve and option clauses in standard player contracts was coming to an end, that the use of agents began to be legitimized; in other words, the establishment of free agency entered the professional sports world. Between 1982 and 1985, there was a war between the NFL and newly created USFL.

The surge in salaries over the last 30 years has solidified the value of bringing agents to the table. As a result of television contracts, merchandising, and favorable minimum salaries, a player’s average salary has risen for both upper and lower tier players. For example, in 1983, the number one draft pick, John Elway, received a $1,000,000 signing bonus. Then, in 2004, Carson Palmer, received a $10,000,000 signing bonus. In 1983, $300,000 was considered a big contract. In 2005, $1,400,000 was considered big money.

One of the most influential reasons for agents is the additional sources of revenue that have begun to emerge for both the NFL and individual players. Media interest in professional football during its regular television programming expanded rapidly, which added to exploding revenues, and resulted in big shares with the players. Eventually, this gave individual athletes the ability to acquire commercial endorsements, as well as Internet exposure.

Consolidation Within the Sports Agent Industry

The landscape of the sports representation business has consolidated over the last few years. Many of the bigger and more established sports agencies have acquired some of the smaller boutique sports agencies, due to the unlimited resources of larger sports agencies.

A factor that relates to the growth of the sports agent industry and sports marketing is the rise of mega agencies such as International Management Group (IMG) and ProServ.

For the first time, the industry saw a “one stop shop,” that provided contract negotiations, financial planning, legal assistance, and marketing and endorsements. Later on, the movement was only furthered, with the creation of CAA (Creative Artists Agency), branching out into sports representation. Other agencies that grew from this movement were Octagon, and WMG (Wasserman Media Group). These agencies started the trend of sending draft-eligible clients to training facilities to prepare for the NFL Combine, which at first, was an advantage in recruiting. That became an industry-wide trend. These bigger firms also provided entertainment services, which promised to connect their clients (professional athletes) with the entertainment industry.

Private equity companies have entered the landscape to acquire agencies to make one large conglomerate. For instance, TPG acquired CAA, and CAA acquired various agents to build out their sports representation practice. Various other private equity companies have entered the business and will look to acquire agencies on an on-going basis.

Cross-selling opportunities allow professional athletes to have the opportunity to gain marketing and endorsement deals and/or other deals off of the playing field or court. Many of the bigger agencies have now started to promote their athletes in other departments and other areas, such as entertainment. For example, players now have the ability to have guest appearances on various television shows.

Boutique Versus Large Representation Firm

The advantages and/or disadvantages of a small versus large agency vary depending on personal interests and goals of the player. Oftentimes, a player will receive more personalized attention working with a boutique agency, with more direct hands on daily interaction. The boutique agencies typically have dedicated agents assigned to a specified number of players to ensure the best quality of care for each client. For instance, a player represented by a boutique agency may have direct daily contact with that player, get to really know that player’s family, and be actively involved in his or her life. On the other hand, a player at a large representation firm, depending how big of a player he or she is in terms of celebrity status or playing ability, may only speak to his or her agent upon or during contract negotiations.

The advantages of these larger firms are that athletes are able to receive all the services they need in managing their careers, and this allows the agency to collect additional fees, other than the contract negotiation services. Depending on the professional league, an agent can only collect one to five percent off of a contract negotiation, but ten to twenty percent on marketing services.

A recruitment tool employed by full-service firms, which has been subject to controversy, is marketing guarantees. These big-time firms are able to afford these immense inducements to offer players who are interested in signing, where smaller firms do not have the same cash flow, and are unable to compete with that.

However, larger representation firms often have unlimited resources not only because of generally larger budgets and capital, but also because of more people within the firm which means that they know more people outside of the firm.

The larger representation firms often have unique cross-selling opportunities and a brand identity within the industry that may or may not carry significant weight during a negotiation. The larger representation firms may add on additional players to one deal or negotiation and have more players to add into certain deals than a boutique firm does, just by nature of sheer numbers.

In terms of a general rule, there is no hard or fast rule in determining whether an athlete will be better suited for a boutique agency versus a large representation firm. Personal preference plays a large role in deciding which type of firm is best suited for the player. If the player is looking for a more hands on client-agent relationship, then a boutique agency is the way to go. If the player is looking for more resources, a larger firm would probably be best suited.

The agent should take into account the direct attention he or she wants to give the clients and the long-term vision of the clients’ careers. All of these factors play a significant role in the decision-making process.

Who Are the Major Players in the Field Today?

Some of the major players in the industry include:

CAA
Octagon
Rosenhaus Sports
Excel Sports Management
Athletes First
Scott Boras
Beverly Hill Sports Council

What all these agencies have in common are the full-service resources that go into the athlete representation industry. Those resources include, but are not limited to, marketing, accounting, legal, real estate, travel, wealth management, and public relations.


Part III. The Negotiation: An In-Depth Look at Why and How Sports Agents Negotiate Player and Marketing Contracts

Key Topic: The Negotiation and the Key to Strategizing Against Your Opponent

The Negotiation of a Player Contract/Endorsement Deal

Oftentimes, during a negotiation of a player contract, marketing, or endorsement deal, both sides have a “YOU (Player) against ME (Team/Company) mentality”—the negotiation often turns contentious depending on the player’s value, context of the negotiation in terms of what is at stake, industry standard, leverage, reputation, or image within the marketplace. A contentious negotiation overcomes the impasse or stalemate when each party gives in or provides the other party with an accommodation.

For instance, if a player is seeking one million dollars on a shoe contract, the agent must be able to effectively communicate to the shoe company that the player will help drive revenue to the company through various means. These means can be social media, advertising, promotions, and appearances.

Money Value: Stakes Are High for Sports Agents

Because the value of certain players are so high, many agents will cut fees, take no fee, and/or bank on the fact that they can make more money on endorsements, appearances, trading card deals, and/or miscellaneous fees associated with the player. It is up to the agent as to how he or she wants to structure the relationship with the client. The relationship with the client can vary based on the client and what the agent thinks the client will be able to command in the marketplace.

Growing Trend

It is important to keep in mind that, not only are the stakes high for the player’s income, but also the agent has a lot to gain (or lose) from negotiations and contracts. For example, the negotiation and value associated with a shoe contract or endorsement contract can be high and the fees associated with the deals for a sports agent can be as high as 10 to 20 percent of the endorsement. Therefore, agents can make more money off of the endorsement contract than the player’s contract depending on the percentage and the demand of the player.

Comparable Players/Statistics

Sports agents have come a long way in terms of negotiating deals for their clients. Due to enhanced technology and the high stakes value of the player contract and/or endorsement deals, many sports agents use statistics, comparable players, historical data, and mathematical algorithms to assist in the negotiation of a player contract, endorsement deal, or arbitration proceeding. As a sports agent, research and due diligence is very beneficial because this can be used as leverage when negotiating deals and contracts. Citing examples of other players in the industry who have commanded certain rates or other specifications is helpful when the agent is negotiating.

This can be done on a case-by-case basis, or the agent can have a handful of these examples to present at all times to anyone he or she may come across, whether it be to a potential deal maker or a potential client.

It Is All About Value

In any player negotiation, there are many factors to consider in determining a player’s value to his or her team when factoring into the team’s salary cap. First, the agent should look at comparable players in terms of market value. This is where research on current players and their salaries comes into play. An agent needs to find the most similar players in the industry and use them as a basis for assessing his or her player’s value.

Next, determine what you are working with in terms of dollar value of the team or market. Conducting market research on what the market is, how much of the market is available, and finding a place for your client within that market is very important when determining and setting a price for your client.

Salary confines are determined based upon the market and how the player has played thus far. A veteran’s value is different than a rookie’s value, mainly because there is a proven body of work. Restrictions and obstacles can be salary caps or an owner’s willingness to spend money. An agent must work through all of these, and the agent essentially has to consistently communicate and work with team management. This is especially important when the agent is attempting to close the player’s contract.

Supply and demand will often come into the equation in terms of economic trends when dictating player value in the marketplace. Oftentimes, a player’s performance sets the demand in which the player’s agent must effectively seek out the best contract available. However, the market is dictated based upon player’s performance.

It is always important for the player’s agent to have relationships within the marketplace in order to be able to effectively negotiate deals.

A player’s celebrity status can help influence market value. Will the player be able to bring more fans into the sport, generate more revenue in ticket sales for the team, or even improve the image of a town? Take into account the fan appreciation and the image that the team will have by aligning itself with the player. As an agent, it is your responsibility to paint your player in the most positive and impactful way possible in order to command the best deals and the best partnerships for your client.

Lastly, a key argument as to why an athlete needs a sports agent to negotiate his or her contracts is simple: these professional teams are armed with a team of lawyers, negotiators, consultants, and business people that stand in front of an athlete and his or her contract. Sports agents play the key role in putting themselves in the middle of this, and making sure due diligence is being carried out for the athlete.


Part IV. How to Break Into the Business

Key Topic: How Anyone Can Break Into the Athlete Representation Business

How to Break Into the Sports Agent Business

Developing and having a career within the sports agent business is difficult and very competitive, but exceptional agents get their start somewhere. It is clearly not impossible, but it does take a lot of determination, heartfelt passion, and devotion to the bettering of players and sports as a whole. An exceptional agent does get rewarded for his or her hard work, and it is very gratifying. The competitiveness can even motivate an agent to work harder and smarter, which is something that individuals from most other industries are not able to boast about.

The easiest way to break into the industry is to know someone—an agent, current or former player, through an internship, and hit the ground running. If you don’t know someone already, all hope is not lost. There are other ways to break into the industry. One way, when recruiting a player, is to reach out to the player’s family, respective college or university compliance department, or coach. Make sure that your intent is sincere and your passion is evident when talking to these individuals.

Another way to break into the industry is to establish yourself in a respective field and partner with like-minded individuals. An agent can gain some experience with players and learn the industry by becoming a coach or recruiter and learn what it takes to sign a player.

Breaking into the business is not easy. There is no typical path or roadmap; it is all about getting yout foot in the door. It is also about whom you know, and being able to market yourself. The best way to become a sports agent is through experience. Being able to get in contact with as many agents and agencies in order to secure an internship is another way to break into the industry. Most of these internship opportunities are unpaid, and require lots of time. While education from a university or college is important, there is no direct educational path to becoming an agent. There are many opinions on majors to take, law being the most recommended. While studying law, and going to law school to become a lawyer can be very beneficial, there are other disciplines that can help you become successful. Taking on a major that allows you to study the sports industry can be just as beneficial, and the same being for other functions as an agent, such as finance and marketing.