Are You Sure You Want To Be A Sports Agent?

Tom Cruise talks on a phone in a scene from the film ‘Jerry Maguire’, 1996. (Photo by TriStar/Getty Images)

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There are approximately 2,700 individuals in the United States who can claim to be a sports agent, having received the required certification from one of the players unions for America’s big four professional sports leagues. Many more – particularly college and law students – would like to join them. Such enthusiasm though generally only seems to track misunderstanding of the realities of being a sports agent, including the shockingly few who have actually negotiated a player contract.

A Sisyphean Adventure

Imagine this scenario. You recently graduated law school and you are determined to make it as a sports agent. You took and passed the NFL Players Association’s (NFLPA) exam on the collective bargaining agreement and salary cap, cleared the background check, and are now certified as contract advisor (or agent). You are able to land an entry level position with a small sports agency with a handful of clients. Part of your employment pitch was that you attended a large Division I university and were friendly with some of the football players.

You spend all of the late summer and fall driving and flying all over the country trying to meet players so you can sell them on your ambition and vision as their representative. Most of them do not even acknowledge your text messages. The few marginal players who agree to meet with you, hire other agents.

But you then use the connections at your alma mater to secure one of the team’s linebackers as your first client, a marginal recruit who may go undrafted because of some trouble off the field. Your agency then pays for him to go to Florida to train for the NFL Combine and workouts with NFL clubs. His two months of training and other Draft preparation expenses cost about $50,000.

The investment seems to pay off. The player has a good Combine and is drafted in the fifth round of the NFL Draft. Pop the champagne. Shortly after the excitement wears off, the team sends you a contract for the player to sign. Because of the provisions controlling rookie compensation in the collective bargaining agreement, there is almost nothing to negotiate. The player quickly signs the four-year contract worth a total of $4.7 million, including a $450,000 signing bonus.

As soon as the player receives his signing bonus, you send him an invoice for $13,500, your 3% commission, the maximum amount permitted by the NFLPA’s regulations. Unfortunately, the player has not retained a competent financial advisor and it takes six months for you to get paid.

Never mind that. The player has a great training camp and makes the team. He starts on special teams but by midseason gets the chance to play linebacker. By the end of the season, he’s starting.

Over the four years of his contract, the player ends up substantially outperforming his fifth round selection, even making a Pro Bowl in his fourth year.

All the while, you have continued to support him however you can. You represent his interests to the club, fly to many of his games (even missing a friend’s wedding to do so), help arrange his housing, try to find him marketing deals for which he has unrealistic expectations, and deal with a variety of minutiae such as parking tickets, unpaid cell phone bills, girlfriends, and more.

For all of these services, the player has belatedly but entirely paid you the commissions owed – a total of $141,000 over the four years. You bore all the costs of such services.

You do it all because you think it is going to pay off. The player is about to be a free agent and will sign a contract for over $100 million, most of which will be guaranteed. It will be a life changing event for the player and perhaps even you. You had been negotiating with his former club about an extension and while a deal could have been had, you thought the player could earn even more in free agency.

Then it comes. An email from the player with no subject line and an attachment. That’s strange. The attachment is a letter that simply says “Thank you for everything you have done for me but I have decided to terminate you as my contract advisor effective immediately.” It’s obvious the player didn’t write it.

You frantically try to call and text the player, his parents, his former coach, anyone with a connection to the player. No one responds, no one picks up.

A week later, you learn that he hired a big name agent. The same agent who represented the star cornerback on his team and likes to take all the players to dinner and the nightclub.

A month after that, he signs that $100 million contract. He does so in front of cameras, with his new agent at his side. That agent will make $2-3 million in commissions from the contract. You get nothing.

Competition Bites –

This situation, or some variation thereof, is common in the sports agent business. Most agents spend the majority of their time on recruitment and client retention, tasks that get increasingly difficult as agents grow older and have families. The duties that many might consider more interesting, such as contract negotiations and statistical analysis, take up limited amounts of an agent’s time and typically only during certain parts of the year. (For a comprehensive analysis of the careers of NFL player agents, see chapter 12 of this report.)

Then there is the competition. According to the NFLPA, of its 1,032 certified agents, 393 of them (38.1%) have never negotiated an NFL player contract. Moreover, 188 of them (18.2%) have negotiated only one contract. That means well over half of NFLPA-certified agents have no substantive experience representing NFL players and certainly do not have flourishing careers as agents. These data have held true over time. In 2015, there were 869 agents, but only 420 (48.3%) actually had a client.

Matters are even worse in the NBA. Of 828 agents certified by the National Basketball Players Association (NBPA), only 133 (16.1%) have negotiated multiple player contracts. 49 more (5.9%) have negotiated just one player contract. That means 78.0% have never negotiated an NBA player contract. Many of those agents likely represent professional basketball players playing in any number of lesser leagues across the globe. But neither they – nor their agent – have broken into the NBA yet.

Next, the MLB Players Association (MLBPA) has certified more than 700 agents, including General Certified agents, minor league agents, recruiters, and client maintenance providers. It does not, however, track how many contracts they have negotiated. The NHL Players Association has 190 certified agents but did not respond to a request for further details. Moreover, given their robust minor league systems, it is common for both baseball and hockey agents to provide financial support to their clients until they make the majors, a far from certain bet.

– Enforcement Doesn’t

What exacerbates the frustration with the competition is many agents’ belief that many other agents are engaged in wrongdoing, including attempting to steal their clients in violate of player association regulations. And yet it is often difficult to prove such wrongdoing or obtain redress. While the NFLPA is expected to soon suspend prominent agent Todd France for having lied about his role in having wide receiver Kenny Golladay fire agent Jason Bernstein and hire France instead, there had never previously been an arbitration decision finding that an agent violated the regulations by stealing someone else’s client (in part because most cases settle).

The MLBPA recently had to go through a tortuous process of arbitration and litigation to defend its ability to regulate player agents and to discipline wanna-be agents associated with rapper Bad Bunny, after they engaged in a comprehensive scheme to induce players to fire their agents and hire them instead.

And yet, the NBPA takes a lackadaisical and limited approach to regulating agents, as evidenced by its failure to intervene in a lawsuit brought by agent Daniel Hazan against player Malik Beasley. Hazan is on the verge of obtaining a $1 million default judgment against Beasley, when the matter should have been litigated through the NBPA arbitration process.

Finally, there is government enforcement, or lack thereof. The federal Sports Agent Responsibility and Trust Act (SPARTA) is a 2004 lawyer that prohibits various forms of bad behavior by sports agents. However, the Federal Trade Commission, the agency responsible for its enforcement, has never taken any action under the law.

Most states have a version of the Uniform Athlete Agent Act (UAAA), which sets out an agent certification and regulation process. Nevertheless, there too enforcement is rare.

The bottom line is that, like working for a sports team, a career as a sports agent seems far sexier than it actually is. Much of an agent’s time is spent engaging in some form of salesmanship or customer service to a fickle and unsure client base. It will undoubtedly remain a popular career pursuit – but the pursuers should do so with eyes wide open.