agent report

AGENT!

Report!

Volume 1 Issue 1!

By: Mike Miller!

07-01-2011!

Thank you for checking out the first issue of Agent Report. It is a look around the Sports Agent Industry and examines agents, agencies, sponsorships, and trends. Normally it will cover a 10-12 week period of the most interesting industry news.

My focus is mostly on Golf and the NFL. I will spend time on other sports as I see fit, especially if the information is applicable or beneficial to the industry as a whole.

The goal of Agent Report is to educate and share some of the current happenings in the industry. My hope is to stimulate conversation around the issues that face the industry.

The ideas expressed in Agent Report are those of my own and the sources I use. I look forward to hearing your thoughts and opinions. Any questions or comments please feel free to email or tweet me.

Twitter: @mjmiller84 email: [email protected]

Agent Report!Volume 1 Issue 1!


Table of Contents!

Content Page!

Golf:!Tiger Vs. The New Breed…………………………….………………………..1

The Player And The Brand………………………………………………..….2

Rory McIlroy brings big value to Oakley……………………………..3

NFL:!U of O Sports and Entertainment Law Symposium………..4

The End Of The NFL CBA …………………………………………….……….5

Texas Tightening up Agent Laws…………………………………………6

Final Notes…………………………………..7 !


Tiger vs. the New Breed!

With Woods’ uncertain future, the PGA has done a great job of marketing its new up-and-coming stars—and the viewers seem to like it. According to Michael Smith of Sports Business Journal, the PGA Tour’s 2011 season would push the theme of

the “New Breed vs. The Establishment”. There has been a conscious effort to coordinate this theme throughout the tour, including a variety of 30 second commercials that ran earlier this season and strategic Thursday and Friday pairings. The PGA Tour has created a lot of buzz around its young stars like Bubba Watson, Dustin Johnson, Nick Watney, and Rickie Fowler.

The PGA is on the hunt for its next big star, as its biggest superstar has been sidelined by injuries. When Tiger gets back, he will have to fight his way back to the top, and the “New Breeds” will not make it easy for him. Tiger’s agent, Mark Steinberg of IMG, will have a lot of work ahead of him helping him get back to the top. According to Liz Mullen of Sports Business Journal, since 2009, Woods has lost millions of dollars in endorsements, which cost IMG $4.6 million in fees. Steinberg’s contract with IMG expires next month and he will have to decide whether or not to resign with IMG or try to take Tiger with him to another agency. With Tiger’s current struggles and an uncertain future, I wouldn’t be surprised to see Steinberg heading to CAA to leverage their “Hollywood” status and bring new life to the Tiger Woods brand. If he does make the change over to CAA, keep a lookout for Tiger on an episode of Entourage. Tiger may be down, but he is not out. However, his road back to the top will not be as easy as it would have been a few years ago; fans are starting to move on and gravitate toward new stars.

Sources: http://bit.ly/lpPy70 http://bit.ly/jqXYN6

Page 1!

Published: May 24th, 2011


Page 2 !

The Player And The Brand!

Rickie Fowler has become one of the PGA Tours young American stars. Although he has struggled a bit this year on the course he has continued to strengthen his brand. Rickie has managed to effectively use his style and personality together with his sponsors to create a strong fan following. His agent Sam MacNaughton has done a great job piecing together Rickie’s sponsors to create a cohesive and strong brand image. Not enough agents take the time to put together a well thought out brand strategy for their clients. The ones that do, like Sam, are able to manufacture and leverage value for current and prospective sponsors. The young superstars like Bubba Watson, Ricky Barnes, Dustin Johnson, and Hunter Mahan understand the idea that they themselves are a powerful brand.

Rory McIlroy is still trying to develop and define his brand. Despite the fact that he has to balance European Tour play with PGA Tour play, his sponsorships don’t work together and more importantly most fail to play off his youthful image. With 2 resort company sponsors, a yacht company, and a high end watch company, you would never guess he is a 22 year-old phenom. On the other hand his partnership with Oakley, EA sports, and Trion: Z speak to the real Rory. This dichotomy is hazardous to the development of his brand.

Even if Rickie Fowler isn’t winning the U.S. Open by 8 shots, his strong brand image makes him a valuable asset to sponsors. The big question here is whether it is better to build a cohesive brand strategy or go with the highest bidder. Taking the time up front to carefully create a brand will pay off in the future when the athlete decides to put the clubs away. A well established brand will outlive a career every time.

Sources: http://bit.ly/liakQl Rickie-Fowler.com Rorymcilroy.com Published: June 25th, 2011


Page 3 !

Rory Brings Value to Oakley!

Rory MacIlroy’s performance at the U.S. Open was nothing short of brilliant and nobody knows that more than Oakley. According to Front Row Marketing, Oakley received the equivalent of $14.7 million in equivalent T.V. advertising time. Rory sported sunglasses, which he only wore on the back of his hat, and logos on his shirt, collar, pants, and belt. The logos spent close to 37 minutes on the television. Oakley CEO Colin Baden wasn’t concerned about the fact that Rory

never wore his Oakley sunglasses on his face, because everyone knows they make sunglasses and they want to be known for more.

Oakley has brought on a number of the young golfing elite in the past few years including Ian Poulter, Ricky Barnes, and Yani Tseng. They have had great successes with their stable of athletes and have received a lot of brand value with these sponsorships. These athletes fit their demographic and have defined their brand within the golf industry.

Rory fits the Oakley brand to a “T”. His golfing ability, young and hip persona, and style make him extremely valuable to the Oakley golf brand. This brings me back to my point about

Rory’s lack of cohesive sponsorships. Jumeirah probably had more T.V. time than Oakley, but did it receive as much value? Yes it did receive value in terms of advertising revenue, but are the fans and wannabe Rorys booking their next vacation at a Jumeirah Resort? No, those that idolize Rory want to play his character on Tiger Woods, buy blue Oakley golf gear, and try to reproduce his swing with Titleist clubs. This still may be a good deal for Jumeirah because they did get over $14.7 million dollars in advertising. The point here is that Rory’s brand is extremely valuable and those companies that fit with his brand are going to get more from the sponsorship than one that doesn’t and thus pay more for it.

Sources: Oakley.com http://www.cnbc.com/id/43470108

Published: June 30th, 2011


Page 4 !

U of O Sports Law Symposium!On January 28th, The Sports and Entertainment Law Conference, put on by the University of Oregon Law School, addressed the issue of sports agents and NCAA compliance. The panel consisted of two Associate Athletic Directors in charge of NCAA compliance, former NFL and Oregon wide receiver Keenan Howry, and former NFL agent Josh Luchs. The panel didn’t agree on everything, but there was one strong point on which they all shared a similar opinion; that something needs to be done to protect top-tier college athletes and teach them the necessary skills to navigate their path to a successful and financially responsible professional career. College athletes who have an opportunity to enter the professional ranks are very vulnerable and often woefully unprepared to deal with multi-million dollar career decisions that face them at an early age.

Most, if not all, of these kids don’t have the proper knowledge to make such a huge business decision. The statistics are pretty astounding. According to Rand Getlin, President of Synrgy Sports and Consulting, the average career span in the NFL is 3.6 years, and three out of four athletes go bankrupt just two years removed from the league. Student athletes will continue to take money from agents and agents will continue to provide them with money until the rules that exist are enforced and athletes are taught how to deal with these crucial decisions.

Josh Luchs expressed that some progress is being made to enforce agent compliance by the NCAA’s Director of Agent, Gambling and Amateurism Activities, Rachel Newman-Baker. She has been responsible for the recent outburst of NCAA investigations and expressed confidence in a recent interview, saying “We believe we have the resources necessary to dive into some of these issues now in a more comprehensive manner, and – more importantly – the message is being sent that we are going to.”

The NCAA’s crack down on illegal agent activity is a step in the right direction, but there is still a long way to go. None of the sides can seem to agree on who is responsible for educating and providing these necessary life skills to the athletes. While compliance officials don’t seem to feel that they can effectively provide this service, many believe it is the universities’ obligation to prepare these athletes for the future. Others believe the NFLPA has a duty to its players and the agents that register with the union. Until either entity steps up to the plate to help these student-athletes, they will continue to be susceptible to making poor career decisions with disastrous financial results.

Sources: http://bit.ly/j65u1R

Published: February 12th, 2011


Page 5 !

The End of the NFL CBA!

As it stands, there are still some contentious issues left on the table. The proposed NFL rookie wage scale is one of the main arguments, not just for players, but for agents as well. Under this proposed scale, players’ rookie wages would be tiered based on draft position, and according to the NFLPA, there would be no individual negotiation of contracts. First round choices would be under five-year contracts and all others under four-year contracts. Many agents see this as an attack by the NFL. According to Rand Getlin, President of Synrgy Sports Consulting, the rookie wage

scale would have a significant impact on agents. There would be less incentive for agents to go out and sign new rookie clients because no commission money would be available for at least four to five years—or when the rookie contract comes up for renegotiation. With the average NFL career lasting only three and a half years, investing $40K-$50K in rookies becomes a huge risk for agents looking for a chance to negotiate the rookie’s second contract. Getlin also expressed concern that there would be a dramatic shift in the agents’ recruiting model if this wage

scale is accepted, from a rookie-centric model towards a veteran model.

The NFL and NFLPA have both set up their respective strategies if a deal is not reached. The NFLPA’s strategy is union decertification, which would allow players to file an anti-trust lawsuit against the owners if they choose to lock the players out. The NFL learned from the 1987 lockout and has anticipated this from the NFLPA, and it is ready to do what it takes to keep players off the field if an agreement is not reached. The league has already filed charges with the National Labor Relations Board, stating that NFLPA decertification is a way to avoid bargaining. If an agreement is not reached in the next several hours we can expect both sides to dig in their heels. The question is, who will be the first to crack? Getlin also pointed out the distinct collaborative advantage that the NFL owners hold—they number 32 individuals, and the NFLPA represents 1,800 players. It would be much easier for the 32 NFL owners to band together than for 1,800 players to unify. He also suggested that many players depend on a consistent paycheck and may not be prepared to hold out for an entire year.

Source: Rand Getlin, Preesident of Synergy Sports Consulting

Published: March 3rd, 2011


Page 6 !

Texas Tightens up Agent Laws!

Back in May, Texas lawmakers wrote up legislation threatening to put sports agents and their runners into jail for 10 years for causing college athletes to lose their eligibility. This is a considerable change from the current law which results in fines and revocation of a license. With the recent NCAA agent violations, several states have been looking to pass new sports agent legislation. USC and UNC, both hit with scandal due to agents providing athletes with benefits, started a crackdown by the NCAA and now states have started to take a stand as well.

These laws are merely scare tactics, but they are so severe that they might just work. On the other hand, agent laws have been in place in most states for quite some time, but they haven’t been enforced. These new legislations are merely a jerk reaction to the recent media coverage of the NCAA scandals. If the laws currently in place were enforced there would be no need for more legislation. Sates can keep creating new legislations until they are blue in the face, but until they step up and enforce it agents will continue to act as if there are no laws.

Sources: http://sports.espn.go.com/ncaa/news/story?id=6558943

Published: June 20th, 2011


Page 7 !

Final Notes!

Hope you found this issue interesting and insightful. This is the first of many Agent Reports. Many of the articles are dated, but future reports will be more current. Please contact me with your questions or comments and any recommendations for future articles. In the next issue I will take another look at the NFL Lockout as well as the NBA lockout. Thanks for for reading this report and please follow me on Twitter @mjmiller84.

Twitter: @mjmiller84 Email: [email protected]

Website: www.linkedin.com/in/miller1018

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