News

So You Want to Represent Athletes?

As Gary Oldman informed us in his hilarious rant featured on Jimmy Kimmel Live, athletes, particularly basketball players, do not make the best actors. While The Fish That Saved Pittsburgh may hold a special place in some hearts, it doesn't really make up for Kazaam. This has not dulled the desire on the part of pro sports stars to cross over, however, nor has it necessarily dulled our taste for watching them perform; in fact, it seems that now more than ever, between the red carpet at The Espys and the evolution of Nike commercials into full-fledged set-pieces, our athletes and our movie stars are harder than ever to tell apart.

There's no question that traditional Hollywood agencies have become more involved in pro sports over the past decade, and there are two distinct philosophies that determine how they go about handling athletes. At the most basic level, the key distinction is between on and off field (or court, or diamond, etc.) representation. Rival agencies CAA and WME provide a great case study.

When it comes to American sports agencies, CAA is... well, CAA. Through a series of acquisitions and hires made within the past decade, CAA has become the home of the contract agents for Peyton Manning, Eli Manning, LeBron James, Chris Paul, Nick Saban, Matt Cain, Dwayne Wade, Drew Brees, Sidney Crosby, Patrick Willis, Tony Parker, Rex Ryan, Evgeni Malkin, Robert Griffin III, and hundreds more professional athletes and coaches, ranging from all-stars in their respective leagues to journeyman and assistants. If you think of the NFL Draft like the Oscars, the first round is like the last five or six awards given, in that CAA seemingly always has the most clients walking up to the stage. In addition to LeBron and D Wade, CAA reps Chris Bosh, completing the Miami Heat world championship trifecta. While CAA has thinned out on baseball, up until just last year they had baseball agent Casey Close, whose clients include Derek Jeter, Ryan Howard and Jason Heyward. 

While no other Hollywood company can rival CAA's sports division (Gersh gave it a shot to no avail), fellow super-agency WME does represent its share of athletes. Athletes on the WME roster include Dwight Howard, Tim Tebow, Ray Lewis, Kevin Garnett, Serena Williams and the recently retired Shaquille O'Neal. But not one of these clients is represented by WME for team or competitive event contracts, nor was Shaq while he played. Looking at this list, WME's strategy is clear to see: these are all athletes who have extremely broad appeal beyond their respective sports, and will continue to do so in retirement. When these clients are ready to act, record, produce, or even run for office, there is no doubt WME will be ready to lend a hand.

The two strategies are clear, but it sure does seem as if CAA threw down the gauntlet in athlete contract represenation, so why would WME not accept the challenge?

The answer may rest with IMG, the agency that has traditionally played the role of monolithic power in the sports world. One could argue that Mark McCormack, founder of IMG, actually invented the modern talent agency. Emerging after the heyday of William Morris and MCA, IMG set the tone for the corporate agency at the same time they were setting the tone for athlete marketing. IMG has been about packaging right from the outset, and Hollywood has followed suit.

There is some debate (like federal court style) as to whether IMG passed the baton to CAA, or whether CAA stole it, but the bottom line is that IMG has lost numerous clients and agents to CAA since 2006, including mega-agents Tom Condon, Casey Close and Pat Brisson. Since then, CAA has continued to acquire high-end sports agents, from practices of all shapes and sizes; these include Ben Dogra (Adrian Peterson), Leon Rose (LeBron James), Henry Thomas (Dwayne Wade), and Jimmy Sexton (who handles Tebow's team contracts). While IMG did seek legal action against at least one departing agent, it has done nothing to replenish its team sports business.

What WME may have ultimately recognized in IMG's break from team sports is that the money to be made from athlete contracts is less than what can be made from marketing endorsements (and even less still than what can be made from programming and televising athletic events). Perhaps related, CAA made some very aggressive moves last year to expand its golf business, an area where competition and marketing are virtually one and the same.

Contract agents bring in money, and there are annuities to be had in player deals. Nonetheless, the "sports division" model comes with its own baggage. For example, sports agents are beholden to the rules of the various leagues, and they're a lot tougher than the Hollywood guilds. The NFL and NBA are now both very stringent regarding rookie contracts, using tiered scales for both salary and bonus over the first four years of the contract, based on draft position - and in the NFL's case, on a total team allotment allowed for rookie compensation. As opposed to the 10% a talent agent takes from an actor's fee, an NBA agent typically receives 4% on a player contract, and an NFL agent only 3% (a fact that has led many a sports agent to consider the marketing game). Additionally, many of the best sports agents operate from smaller offices throughout North America, and may not always see things from the Hollywood perspective.

All that said, the prestige that comes with representing a list of athletes like what CAA has amassed can be worth its weight in gold. It's hard to say that one route is better than the other, or whether or not the next phase of, say, Ray Lewis's career won't ultimately prove to be the more lucrative. We would not be surprised at all to learn that Ari Emanuel has already packaged The Fish That Saved Baltimore.

Sources: Deadline, Sports Agent Blog, Sports Business Journal