When the infamous words “Show me the money!” in Tom Cruise’s blockbuster movie Jerry Maguire came out in 1996, Hollywood brought attention to the world of sports and entertainment agency. Since Cruise’s classic, Hollywood has highlighted the glitz and glam associated with that world – the big egos, flashy athletes and everything in between. America has seen Ari Gold in the HBO tv series, Entourage and most recently, Dwayne “the Rock” Johnson in HBO’s comedy-drama series, Ballers.
It sounds fun, doesn’t it? Scouting and identifying talent, working with professional athletes, and getting paid millions of dollars in commissions on big 7-figure contracts … who wouldn’t want to do it? Oh and you don’t necessarily have to have a JD, MBA or PHD from a top 10 school to be qualified to do it … if you have the rolodex of contacts, the savviness to build those relationships, and fortitude to build a reputation of trust, and maybe a little luck, you’re right there.
So let’s cross from Hollywood into what the sports agency landscape looks like in reality today.
To a large extent, Hollywood is not far from the truth. The spots agency business is booming. Media right deals, salary caps and the size of professional athletes’ contacts are bigger than ever. In Forbes’ 2017 ranking of the “World’s Most Valuable Sports Agencies,” the firms featured have negotiated a collective $43 billion in current professional athlete contracts, netting over $2.1 billion in commissions, nearly a 10% increase from 2016.
There is one agency that is head and shoulders above the rest. Creative Artists Agency (CAA). Their total in contracts managed is larger than the next three top agencies combined at $8.5 billion (equating to $318 million in commissions). CAA leads the way in football and hockey, and is only second behind to Excel Sports Management in basketball. CAA has 5 of the top 20 compensated sports agents:
- #9, Pat Brisson – Hockey – $44.05m in commissions
- #11 Tom Condon – Football – $42.17m in commissions
- #16 Nez Balelo – Baseball – $28.92m in commissions
- #17J.P. Barry – Hockey – $28.75m in commissions
- #18 Todd France – Football – $27.95m in commissions
*Scott Boras (with Boras Corp) ranks #1, earning $108.33M in commissions via baseball.
CAA’s biggest contracts include Matthew Stafford’s 5 year $135 million deal with the Detroit Lions, Robinson Cano’s $240 million deal with the Seattle Mariners, and Patrick Kane’s 8 year, $84 million deal with the Chicago Blackhawks.
Right behind CAA is Jeff Schwartz’s Excel Sports Management who may be the quickest growing sports agency company, acquiring an increase of over $300 million in contracts last year. Managing a roster of over 60 NBA players, including Blake Griffin, Kevin Love, and Andre Drummond, Excel has dominated the basketball space.
Behind Excel, is LA based, Wasserman, with about $2.7 billion in contracts. Wasserman recently acquired European soccer agency Mondial Partners, which makes them the No. 1 ranked agency in soccer combined with its domestic soccer division.
Rounding out the top 5 is Independent Sports & Entertainment at No. 4 and Octagon at No. 5.
The sports agency business has traditionally had several barriers to entry. In fact, the top 5 conglomerated sports agencies in the world represent over one third of all professional athletes. While the top 40 agencies representing 3,6000 clients, this equates to about 60% of pro athletes in the top 4 US sports leagues (NFL, MLB, NHL, and NBA).
Today, a 24 and a 25 year-old out of New York City are dispelling that stigma. Two years ago, Andrew Hoenig and Daniel Hazan became the youngest agents with a player on a NBA roster with the New York City Knicks Jameel Artis. Today they have 20 clients and have negotiated 11 contracts. Neither of them were certified agents when they started, nor did they have many contacts, so they networked organically by adding athletes on Facebook while taking them to D-League open tryouts, paying for their travel and they learned the business instantaneously on their own. And while they still consistently loose guys they recruited (many of times starting at the beginning of an athletes’ 4 year high school career) to the big agencies like CAA, Excel and Wasserman who come in at the last minute and scoop up the highly talented.
Hazan and Hoenig are trying to develop their own niche specifically within the NBA. They are starting to get guys after they leave Wasserman, or CAA, who want more personal attention. For Artis, it was exactly that, “With me, it’s not about the age of the agent, not about how many people you are representing … They were all focused on me. They were all about Jame Artis getting in the right position.”
While the vast majority of agents’ income is made through commissions on their clients’ contracts, the other component to it is marketing and endorsement. Hazan owns his own marketing company called New Generation Management which promotes events and products for Jonathan Simmons, JR Smith and Charles Oakley. Agents typically earn 20-25% from marketing and endorsement contracts. Typically, however, these endorsement earnings just make up 1-2% of their overall player contract.
Needless to say, the sports agency landscape is an interesting one … filled with big egos and lots of money. Whether you’re a young entrepreneur, a seasoned sports marketer, or even an ex-professional athlete, there is opportunity.