Big Score: Vinícius Júnior of Real Madrid is one of the young stars Roc Nation Sports acquired in its acquisition of TFM.
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Real Madrid’s Vinicius Junior and Arsenal’s Gabriel Martinelli join a roster that includes Kevin De Bruyne and Romelu Lukaku.
A decade ago when billionaire hip hop mogul Jay-Z launched Roc Nation Sports, signing soccer superstar Neymar was one of his top priorities. It still hasn’t happened. But now his agency is tapping into the jogo bonito pipeline that produced the Brazilian phenom.
On Thursday, Roc Nation Sports International announced its expansion into South America through the acquisition of São Paulo-based agency TFM. Financial terms of the deal were not disclosed. The transaction adds a slew of rising Brazilian players—including Real Madrid’s Vinicius Junior and Arsenal’s Gabriel Martinelli—to Roc Nation’s already impressive roster that includes Manchester City’s Kevin De Bruyne and Inter Milan’s Romelu Lukaku.
“You think about [soccer] and you think about talent, Brazil is probably the first market that you would put on the top of your list as it relates to a wish list for acquisition,” says Michael Yormark, president of Roc Nation Sports International. “If you know anything about TFM, they’ve got some of the best talent in the world.”
The acquisition is a milestone for Roc Nation Sports, which launched its international business in 2019 and a year later merged with U.K. soccer agent Alan Redmond’s boutique R10 Agency. The firm previously represented 40 soccer players and, with the TFM acquisition, will see that number triple to roughly 120.
“Our desire was to open up our own office, start from scratch, and build,” Yormark says. But after three and a half years, Roc Nation has “now decided that if we can find the right acquisition target that aligns with our goals and objectives and our overall strategy, then it’s the right opportunity to explore.” As with all agencies, consolidation has always been a big part of the industry—for entry and growth. And, as Yormack notes, “There’s no better way to eliminate competition, than to buy the competition.”
Other divisions of Roc Nation have made similar moves, investing in and outright buying other agencies to build scale in sports like American football and basketball. And they’re not alone. In the past year, Los Angeles-based Wasserman agency acquired Jet Sports Management for baseball, Esportify, (for rugby), Mullhaupt Management (for golf), Caric Sports Management (for the NFL) and talent marketing agency BSE Media Group. Meanwhile, Creative Artists Agency added soccer powerhouse ICM partners in a reported $750 million deal in 2022, just three years after acquiring Base Soccer.
These acquisitions have also helped Roc Nation Sports expand faster. In November, the agency debuted on Forbes’ list of North America’s most valuable sports agencies, ranked seventh. With an estimated $2.6 billion in active contracts under management, the agency stands to collect up to $203 million in commissions across the life of those contracts.
The TFM deal brings an immediate boost to Roc Nation Sports’ revenue. Soccer agents collect roughly 10% from selling clubs in transfers and 6% of playing wages under FIFA’s new regulations, according to one industry insider.
Vinicius Junior, who led Brazil in assists at the 2022 FIFA World Cup and delivered Real Madrid its 20th Copa del Rey in May, is the third-most valuable player in soccer by estimated transfer value at roughly $160 million, according to Transfermarkt, a database that estimates the value of soccer players. His current contract expires at the end of the 2023-24 season. Martinelli’s transfer value is estimated at $87 million, though he is under contract through 2027. Representative agreements have to be renewed every two years.
Going forward, TFM founder Frederico Pena will preside over Roc Nation Sports International’s newly established Brazilian office. Previously characterized as an “export agency,” focused on selling young Brazilian talent abroad, the business will adopt Roc Nation’s full-service approach, which includes marketing as well.
“We want them to continue to run the business the way they’ve been running it, because they’ve run a very successful business,” Yormark says. ”We complement their strengths, and they really complement our strengths. And so together, it’s kind of like one plus one equals three.”
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Source: https://www.forbes.com/sites/justinbirnbaum/2023/07/07/jay-z-roc-nation-sports-acquires-brazilian-soccer-agency-tfm-vinicius-junior-gabriel-martinelli/