The Sports Agent


There is a certain person in the realm that is the National Football League that is especially busy in the offseason. I'm not talking about Coaches or players. The person I speak of, is the Sport's Agent.

The great increase in salaries, sponsorships, and benefits in professional sports have significantly expanded the need for the services that modern athletes require from their agent. Contract negotiations performed by today’s agents are a small part of his job function. Today’s agent works with the pro athletes financial advisers, marketing executives, insurance agents, and real-estate brokers They can provide services for bill paying, endorsements, promotions and public relations. Some can help with legal matters, if they are an Attorney. From travel arrangements to helping with contract negotiations, an agent is on call for just about anything, including running to the mall to get jewelry fixed for clients.

Being an agent is a 24/7 job, and it all starts at the College level.

Agent's are not allowed to contact a student-athlete until he is listed as officially eligible for the NFL draft. They can't sign players until their college seasons end, which is in December or January, depending on whether they play in a bowl game. For example, a University which is not participating in a post-season bowl game has a student-athlete in his junior year that declares for the draft on December 1. An agent would not be permitted to communicate with this student-athlete or any person who is in a position to influence him until the NFL has officially notified him that he is eligible for the draft (typically 72 hours after the draft application date).

The NFL's draft eligibility requirement is defined in the Collective Bargaining Agreement. It states that a player may apply for eligibility in the NFL Draft no earlier than three years after either his graduation from high school or graduation of the class with which he entered high school, whichever is earlier.

After the student-athlete is declared eligible, he can find someone to represent him in his endeavor to seek employment in the NFL.  He wants an agent who will give him personal attention and be available whenever needed. One that works for him. At this point, he has a choice to make. Should he go with a lone agent or a
Conglomerated Agency? When searching for a representative, player's will find that there's a wide selection to choose from.


The Maverick Or The Agency

Twenty years ago, agents were primarily one-man operations with little regulation. That
changed as the salary cap escalated, more than doubling since 1996 to the 2009 level of $112.1 million per team.

In many instances, the top agents are operating as a tag-team or moving under corporate umbrellas such as Octagon, SFX Football, International Management Group and CAA, a talent agency with clients like Tom Cruise and Steven Spielberg, but is now venturing into representing athletes.

There are some, like familiar Maverick Drew Rosenhaus, who maintain the solo route, and there are others that have built their businesses to a moderate size. But Drew doesn't have anything on Tom Condon.

Long regarded as the most powerful agent in the NFL for his blue-chip quarterback clients and record-breaking contracts, Condon, by merging his practice with up-and-comer Ben Dogra, has created one of the largest and most star-studded athlete representation practices in modern sports history. CAA Football represents 130 NFL players, and Condon has personally represented six No. 1 overall draft picks since 1998. He was a starting guard in the NFL for 12 seasons and is a licensed attorney at law. Condon was NFLPA president as a player, and has deep contacts throughout the NFL.

CAA Sports, in it's 6th year of existence, has become the dominant sports agency in the United States for representing athletes in the four major team sports, according to SportsBusiness Journal’s analysis of player salaries and their representation.

CAA represents many of the most successful players in the NFL. Condon negotiated the richest contract in NFL history for Indianapolis Colts quarterback Peyton Manning - a $98 million deal, including a record $34 million signing bonus, and has negotiated 7 contracts with at least $20 Million in guaranteed money. He represents 75 current NFL players including Brian Dawkins, and several top NFL draft prospects. CAA's clients include 11 of the 32 NFL starting quarterbacks, seven of the last eight NFL MVPs, 21 players selected to the 2010 Pro Bowl, three of the last four Super Bowl MVPs, and five of the last six #1 overall picks in the NFL Draft. In 2009, CAA Sports had its second consecutive record-setting NFL Draft, representing nine of the first 19 selections including the #1 overall pick, for whom it negotiated the largest rookie contract in NFL history (Matt Stafford). In the past nine years, CAA Sports agents have represented 57 first-round NFL Draft picks, more than three times any other agency.

Ben Dogra might be the best-kept secret as far as the media and fans are concerned, but he’s well known among NFL players. Since 2004, Dogra has represented more NFL first round picks than anyone else. There have been plenty of hits from those draft classes, including No. 1 overall pick Mario Williams, Adrian Peterson and Jonathan Stewart.

Dogra doesn’t dance in the press like Drew Rosenhaus, and he’s rarely mentioned save for a footnote when one of his stars signs, but he’s among the best agents in the NFL.

With so many choices, players must decide what's the best fit - an agent in a corporate empire or one who is primarily a solo act - when it comes to finding representation.

Some players, like Mike Peterson, switch agents because they need change as their career moves into their prime or twilight years. Peterson's first two agents were more "buddy-buddy" types. He is now represented by Condon and CAA.

"My other agents before [Condon] were more hands-on guys that called me every day," said Peterson. "I don't need that anymore. Peyton [Manning] talked to me about Tom [Condon] and always spoke highly of him. Personally, that didn't matter so much. I just want a guy on the business side that knew what he was doing." For agents, the game is becoming more complicated as their industry grows exponentially. With big money available in marketing players, as well as negotiating their contracts, agents are choosing between two avenues: maintain a small practice either by themselves or with a long-time partner, vs. the high-risk, high-reward option of joining a corporate empire.

Jimmy Sexton, an agent who has made as big a name for himself representing coaches (Steve Spurrier, Bill Parcells and Nick Saban are among his clients), is content to remain with his small company, Athletic Resource Management. He is now representing Broncos rookie Tim Tebow.

"We've gone through different phases in this industry," Sexton said. "Now you have large corporate bases, a boutique approach where players pick which doll fits them best. It works better for other [agents] to be in large conglomerates, but I enjoy the autonomy of being self-employed." Either way, as the NFL money pot gets bigger and the competition to represent players keeps ratcheting up, prospective agents are facing a job market where only a select few make it big. "I don't want to squash anybodies dream, but it's a very tough business," said Healy. "The competition is vicious. You got people trying to steal your clients once you've signed them. It makes the ambulance-chasing lawyers look like Boy Scouts."

National Football Post's Jack Bechta:

There are 50 agencies that represent 75 percent or more of all NFL players and most likely represent the top players. I think the size of an agency is important for players and their parents to consider. On average, I’ve represented about 18 to 20 players a year for the past 12 years and currently represent 15 players. It’s a number that works well for me and my infrastructure. I am, by choice, an independent boutique-to-mid-size agency. I tend to attract a lot of smart, hard-working offensive and defensive linemen, along with blue-collar defensive backs. For reasons I can’t explain, I do really well with kids from the Chicago area and east coast. On the other hand, I struggle signing SEC players.

Other agencies match up well with QBs and specialty positions. The bottom line is that there is someone out there for everyone. However, players and parents must take their time to explore their best options.

Needless to say, my industry is one of the most competitive on the planet.

Jerry McGuire may have made the Sport's Agent look glamorous, but there is no correlation between the amount of time an agent puts in and the results. Still, the reward can be worth the diligence.

"There's so many agents out there because the dollars have multiplied over and over with the salary cap," said NFLPA general counsel Richard Berthelsen. "All you have to do is meet a good player toward the end of his college career and get certified. If that player turns out to be a first-rounder, that agent is going to make over $300,000 [on a 3 percent cut]. That's a pretty appealing prospect."

Certified Agent

To be able to represent an NFL player, an agent must be certified. All NFL teams are prohibited from dealing with any agent who is not certified by the NFL Players Association. Teams that do deal with agents who are not certified are subject to fines.

Certification involves approval of an application and a background check by the NFLPA. Unfavorable criminal, financial or employment history will be examined and could prevent your application from being approved. All applicants are then required to attend a seminar and pass an exam. All agents must attend annual seminars on salary cap trends to maintain their certification. Agents must also gree to be bound by NFLPA regulations.

There are currently upwards of 850 "certified contract advisors" or Player Agents certified with the NFL Players Association. There are about 2,000 players on NFL rosters (active, inactive, injured reserved and practice squad). Certification is required by the NFL collective bargaining agreement, and NFL teams are prohibited from negotiating contracts with any player representative who is not NFLPA certified.

Further complicating the process is that NFLPA rules allow agents to charge a maximum of 3% of the negotiated contract value in fees, further reducing the number of potential "big money" clients an agent can represent to those taken in the first round. They will also typically earn 10-20% on endorsement deals for their player.

Becoming an NFL agent isn't as easy as you think. The NFL Players Association, which oversees the industry and decides which agents are certified, has a list of pre-requisites.
Here are some of them:

A graduate degree is required, and a strong background in marketing, finance, law and communication is beneficial to becoming a successful agent.

Each applicant must pass a 60-question, multiple-choice exam. About 300 prospective agents apply each year, and around 200 pass the test, according to the NFLPA.

Agents must pay an annual certification fee of $1,200 to the NFLPA if they have less than 10 clients and $1,700 if they have 10 or more.

In 2005, a new requirement adopted was that agents must carry liability insurance, which costs from $2,500-$10,000 annually, depending on the agent's income the previous year.

To maintain certification with the NFLPA, every agent must negotiate an NFL contract within a three-year period or lose their agent certification.

At least 35 states, including Florida and Georgia, require an agent to be registered and to pay a fee under the Uniform Athlete Agents Act.

If a player terminates his agent halfway through the deal, there is a contingency for that. The NFLPA has a formula where the player isn't paying two different agents. The next agent is only paid on new money that he negotiated. Agents are paid only after the players are paid, and those arrangements usually are worked out between the agent and player.

The NFLPA has authority to regulate the conduct of agents who represent players; determine the number of agents to be certified; and determine the grounds for withdrawing or denying certification of an agent.

"The Regulations create a competitive and level playing field for agents who represent or aspire to represent NFL players," said CARD and Executive Committee member Mark Bruener.

 

And finally, I have a word from the NFLPA's DeMaurice Smith, updating Player Agent's on the status of the CBA and the Uncapped year in the League

MEMORANDUM
To: NFL Players and Contract Advisors
From: DeMaurice Smith
Date: February 23, 2010
Subject: CBA Negotiations/Restricted Free Agency

As we quickly approach the beginning of the uncapped year, I wanted to take this opportunity to update you on the NFLPA’s efforts to reach agreement on an extension of the CBA before the beginning of the uncapped year on March 5, 2010. It is our view that obtaining an extension to the CBA prior to the uncapped year is in the best interest of both the players and the owners. However, the terms of any CBA extension must allow for players to get their fair share of NFL revenues while at the same time address the owner’s issues in such a way as to allow them to continue to grow the game of football. All of the NFLPA’s proposals have been crafted with that in mind. The Player Representatives have also been advised of the NFL’s request that players take a pay cut that would move players back to the 1980’s in terms of their share of NFL revenues.

CBA Bargaining

There have been 12 general bargaining sessions with the NFL discussing issues relating to the proposed terms of a new CBA. Comprehensive written proposals and counter proposals have been presented to meaningfully address issues such as the overall player cost/free agency system, revenue sharing, rookie salaries, forfeiture clauses in player contracts, and off-season/pre-season work rules. In addition to NFLPA staff and outside counsel, NFLPA player leadership has been present at all of the sessions. Players attending at least one session include NFLPA President Kevin Mawae, Mark Bruener, Kevin Carter, Tony Richardson, Domonique Foxworth, Chester Pitts, Sean O’Hara, Jay Feely, Pete Kendall and Donovin Darius. These players have contributed valuable insight and perspective in support of NFLPA positions at the bargaining table.

On the NFL side, owner representatives in attendance have included John Mara (New York Giants), Mark Murphy (Green Bay Packers), Robert Kraft (New England Patriots), and Ozzie Newsome (Baltimore Ravens). The most recent session was held on February 6, 2010, just prior the Super Bowl, and was attended by the NFL Management Council’s Executive Committee, which is comprised of 10 owners, and chaired by Carolina Panthers owner Jerry Richardson.

In addition to the general bargaining sessions, six sub-committees were created to address very specific areas of the CBA. Those sub-committees are as follows: Benefits, Drug Policies, Grievance Procedures,
Working Conditions, Injury Data and Licensing/Intellectual Property Rights. The NFLPA has prepared detailed written proposals for each of the areas addressed by these sub-committees and each committee has held no less than three meetings to discuss their respective proposals.

In total, we have held more than 30 overall bargaining sessions with the NFL in the past six months. And while we have made progress in some areas, we continue to have significant disagreement with the NFL over their desire to have players take an 18% reduction in their share of revenues given the NFL’s failure to provide meaningful financial data to support the assertion that their costs have increased significantly
since the capped system was put into place in 1993. Their demand that the players take such an historic pay cut is even more disturbing given the NFL’s continuing economic growth despite the worst recession in recent history.

The NFL has made it clear that the league and its clubs remain profitable. There has not been any statement, affirmative or suggested, by the NFL that any team is losing money. Moreover, the league has rejected any offer to discuss their profit margins, team profitability or any of their teams’ individual financial statements.

Players have always been willing to create incentives for NFL owners to develop new revenue streams for their clubs. The G-3 program contained in the existing CBA which provides salary cap credits for new
stadiums provides a good example of our commitment to this philosophy. Our current proposal would allow NFL clubs to obtain substantially increased deductions for costs incurred to generate new revenue streams. Another general bargaining session is scheduled for Thursday, February 25, 2010, at the NFL Combine in
Indianapolis.

Uncapped Year


While we are doing all that we can to reach a fair agreement with the NFL before the start of the 2010 league year, it appears likely that no new CBA will be reached and the 2010 season will be uncapped. For
some players this means that they will be Restricted Free Agents instead of Unrestricted Free Agents since unrestricted free agency in the uncapped year increases from four (4) to six (6) Accrued Seasons. We are sensitive to the impact that this change in the free agency rules will have on these players. Because of this, our most recent proposal to the NFL contains an offer to continue the current capped system for an additional year which would allow the parties ample time to complete work on a long-term CBA.

The NFLPA just recently won a Special Master decision against the NFL and its clubs which will force the high revenue clubs to share millions of additional dollars with the low revenue, small market clubs during
the 2010 season. The decision to pursue this action was based upon our belief that we had to make more money available to sign players in the uncapped year.

Remember also that the uncapped year provides just that -- no cap or limit on the amount of money a club may spend on player salaries. The last time there was an uncapped season in the NFL was in 1993, and in that season clubs spent collectively over 70% of league revenue on player costs. While we cannot predict what will happen in 2010, we suspect that it will be dependent on the individual player and team. Given the projected increases in NFL revenues for 2010, more money should be available for player salaries than ever before. In addition, keep in mind that each NFL club will be saving approximately $10 million in benefit costs as a result of their not having to fund certain benefits in the uncapped year. That money can and should be used for player salaries.

For those players negotiating new contracts in 2010, please keep the NFLPA updated on the status of your negotiations as it will allow us to be informed of the trends in the market for player services. With that
information, we can then help all players maximize their ability to get the best contracts possible. In the meantime, the NFLPA will continue its efforts to reach agreement with the league on a new CBA.

 

Let us hope these issues get resolved, and a Lockout is avoided for the 2011 football season.

Oh yeah... Go Broncos!

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