DO PRO ATHLETES NEED AGENTS?
In today's world of social media and information sharing dominating virtually every space, people feel empowered to do anything and everything on their own. You can youtube instructions on anything your mind can conjure up. Similarly some pro athletes have chosen to represent themselves in contract negotiations. Are sports agents necessary for pro athletes? Many pro athletes have recently questioned the importance of sports agent representation in contract negotiations.
This year, NFL first-round pick of the Baltimore Ravens, Lamar Jackson, decided to represent himself claiming, "I got a lawyer... and my mom is my manager." Two off-seasons ago, Russell Okung, current Los Angeles Chargers Offensive Lineman and former Seattle Seahawk, published an article announcing he would represent himself in free agency. Okung claimed athletes are able to negotiate all of their contracts without an agent and believed that he knew his own worth better than any agent could. This is simply not true.
Today's athletes have more opportunity than in the past but face more complex types of risks. Before an athlete youtubes how to represent himself, that athlete should consider the fact that representation requires so much more than just knowledge of market value and athlete worth. Let's examine the actual disadvantages and advantages to not hiring an agent.
Agent Fee - The only actual benefit a pro athlete has is saving the fee he would otherwise pay to an agent. As an agent, I met very specific requirements in order to become certified by the NFL Players Association. Only those who are certified by the NFL Players Association are permitted to negotiate with NFL teams on behalf of players, and in exchange an agent is paid a commission that is capped at 3%. That's right, a maximum of 3%. In all my experience, monetarily, the agent’s commission often equates to the value which he or she brings. It's advantageous to both parties that the structure of the relationship is incentive based.
Experienced Advocate - Jackson does not have an experienced advocate, other than himself, to face the media. When we see "sources" pumping information to ESPN's Mel Kiper or Adam Schefter, those sources are generally agents who have created strong relationships with journalists over time. Jackson has been without one of those advocates who can help deflect negative opinions of those who often sway the general public. So far, this has adversely affected him throughout the process. One NFL general manager told me that "Jackson's interview was the worst QB interview I've had in 26 years." Another executive told me that it was difficult to get a hold of Jackson to set up potential meetings. Jackson needed an advocate to prepare him properly and to bridge any gaps with team executives.
Leverage Relationships - While agents may not be able to negotiate a rookie player's salary in the contract, they certainly do leverage their relationships with team general managers and executives. Jackson had a difficult time proving his marketability as a NFL quarterback. Had he signed an agent who is reputable at representing successful NFL quarterbacks, it would have helped deflect notions that Jackson cannot play quarterback at the next level. Optics matter, as do relationships with key executives.
Protect the Client - Good agents are happy to shoulder blame and criticism, shielding their clients during the process. Do Leigh Steinberg or Aaron Gordon care about what people think of them? All good agents care about is doing whatever's necessary to deflect bullets fired at their clients and make them look their best even in the ugliest situations. Agents should be good at doing this. Jackson could have absolutely used this to his advantage.
Works on Behalf of Client - As an agent, I know firsthand, as well as only a few others, see how tirelessly I work on behalf of my clients. Many agents grind for their clients, exceeding far beyond simply negotiating a contract every few years. Yes, a pro athlete may see some upfront savings by not hiring an agent, and an agent may not be right for every athlete throughout his entire career, but many athletes, including Jackson, would be wise to understand the value in spending a little now for a lot later, and would gain himself access to a stronger guarantee of long-term success.
Contract Negotiation - Agents are fluent in the language of the NFL collective bargaining agreement ("CBA"), and endorsement and marketing contracts, just like a pro athlete is with his playbook. Many are under the impression that team contracts, endorsement deals, and other business agreements are believed to be entirely boilerplate, meaning that the terms are pre-written except only the athlete's salary and contract length. However, this incorrect. One thing I have learned early on at law school as well as in my experience as a real-life Jerry McGuire, is that legally executed contracts do not have to reflect any of the terms discussed at the negotiating table and that everything is negotiable.
Agreements demand industry-intensive knowledge acquired over time of both sports specific and contract negotiation experience. Also, the agent, who understands the athlete's expenses, spending habits, and potential expenses (family, unexpected children, baby mamas, finishing school, etc.) can dictate a contract based on client’s needs.
Negotiations like these can be complex. Most of a pro athlete’s lifetime income can come from their earnings on the field, which would render contract negotiations a game of high-stakes. Teams negotiate based on formulaic algorithms because, hey "it's a business," like we so often hear. Teams consider the athlete's age, physical measurables, mental capacity, injury history, personal history, character, stat trends, and position-specific wear-and-tear. Agents negotiate by analogizing clients to similarly-situated athletes with high salaries. The contracts of athletes who play different positions are extremely diverse. Each position’s salary demands a high degree of industry-specific knowledge, research, and arguments to combat assertions submitted by the team’s negotiators. Agents are experienced in these types of negotiations, where everyday business attorneys are not.
In my experience, monetarily, the agent’s earnings often match the value of the results which that agent brings. Okung may have thought he was getting a good deal at the outset when it was initially reported as a five-year deal worth over $10 million annually, but it turned out to actually be a one-year deal worth $5 million with team options in each of the remaining years. Ultimately, it ended up being only that, a one-year deal worth $5 million because the team declined to pick up the option.
Jackson slid to the end of the first round where he was selected with the 31st pick overall, landing him a contract with a total value worth $9,589,930 including a signing bonus of $5,044,895. I firmly believe had Jackson had an agent, he would have landed in the top fifteen, and with a worst-case scenario at number 15, he would have landed a total contract value worth $13,651,129 including a signing bonus of $5,044,895. I'm no math wizard, but according to my calculations Jackson lost at least $4,061,199 in total contract value. Personally, I would rather earn $4 million and pay an agent $120,000, but maybe that's just me.
Proportionally, the agent’s fee mathematically cannot outweigh the benefit of any money added onto the contract value. Pro athletes like Lamar Jackson and Russell Okung should understand that not all agents are the right agent to fit their needs. Hiring an agent for representation is a crucial failsafe for any pro athlete, especially NFL players. If an agent approaches you and says "help me help you," your reply should immediately be, "show me the money."