Hopefully it is clear to you by now that the public gets its image of the sports agent industry from a few events per year which involve the “big name” agents in the business. In the past, people viewed agents as Tom Cruise’s character in Jerry Maguire. Then they were left with the image of a guy with slicked back hair standing in front of Terrell Owens saying, “Next Question“. Now, the American public thinks that we are all a bunch of Scott Boras’s, looking for as much money we can squeeze out of owners’ pockets no matter how ruthless we must be in the process. In fact, people are beginning to think that a commission based agent is no longer necessary based on the recent cloudy event leading up to A-Rod’s re-signing with the New York Yankees.
Brian Berger of Sports Business Radio recently decided to make a case for doing away with full-time agents. The first question he asks, is:
Do pro athletes really need full-time agents?
I think I answered that question pretty clearly in my response to Curt Schilling’s recent post. If you do not want to read the reasoning why and just want to know my answer, it is: YES. But would you honestly think otherwise?
Brian Berger goes on to ask that even if the answer is yes, should agents be working off of a contingency fee relationship (making a percentage based on the deals they secure for their clients)? Instead, he suggests maybe hiring an agent by the hour (an hourly fee) for all services or hiring a contractual agent by the hour to negotiate team deals and hire a separate marketing agent to pay on a contingent basis.
Berger does not present a novel idea. In fact, I discussed the idea of switching over to an hourly fee on this blog almost a year ago. Here is a little bit of reasoning on why I was hesitant about the hourly fee idea a year ago:
Athletes pay a commission to agents for the services that they offer, which is more than just negotiating a contract every time a player becomes a free-agent. At all times, athletes should be focusing on their game and their families. They should leave the rest to the agents.
[An hourly fee] system is probably only smart for a select few individuals who feel that they can handle doing everything outside of the field/court/diamond/etc. Remember that means booking flights, booking hotel rooms, sitting in actual negotiations with the teams who pay you, hearing the teams say things about you that could change your performance on the field, etc. etc. etc.
If you are A-Rod, LeBron, or D-Wade, maybe you decide to go the hourly fee route and only pay commissions to a marketing agent. But let’s remember that players afforded this opportunity where it may work out to their benefit instead of their detriment are few and far between. I hope that the majority of players looking to go pro do not take Berger’s advice as a general statement to all athletes. These types of pieces are meant for a select few individuals who have reached a ceiling (although there are no caps in baseball) and do not need an experienced negotiator brokering deals with organizations.
And last, if you think that our commissions are so enormous, you are out of your mind. Take a look at what a standard contingent fee is in the legal world (depends on the case, but often around 33.3%). In basketball, agents are capped at taking a whopping 4%. The NFL limits it at 3%. This small fee should not be breaking an athlete’s bank.