Agencies Not Only Representing Athletes
One common misperception of many of the largest sports agencies is that they only focus on, or even spend a majority of their time and earn most of their revenues through, the representation athletes in their contractual negotiations. For instance, IMG, which was founded in 1960 as a company that focused on representing athletes, has evolved into a company that actually earns a small portion of its revenues from that original focus. Now, IMG makes big money on its product licensing division, event creation/management division, and even its athlete training division, which has a large presence in Bradenton, Florida.
IMG is not alone in this area. In fact, Blue Entertainment Sports Television (the company that was recently sold to Lagardere) also does a lot of business outside of the representation of professional athletes. Blue Entertainment Sports Television, also known as BEST, was owned by a private investment firm, Blue Equity. The chairman and managing partner of that company is Jonathan Blue. And one thing Blue wants the world to know is that he is not a sports agent.
In a presentation given to the Association for Corporate Growth in Kentucky, Blue opened with the following statement:
“I’m not a sports agent. I never was.”
It is not just Blue that is trying to shed that limiting phrase from what is associated with his name. When I talk to executives at some of the largest “agencies”, a majority of them want to emphasize to me that when I report on their companies, I should talk about not only what they do in the athlete representation world, but their other areas of business as well. And then there are those who also can’t stand the “sports agent” phrase to begin with. As you may already know, I am one of those people.
But did you know that before BEST was sold, only one-third of its revenues came from the representation of athletes? The majority of its revenues come from a combination of selling rights to events, managing events, and marketing opportunities. And that makes sense. Think about the small percentages that agents take on the contracts negotiated for their clients. Some leagues limit the commission (NFL, NBA), but others like the MLB and NHL will force you out of being competitive if you charge any more than 5%. If you don’t have a very successful client, the small percentage on their contracts won’t allow you to stay alive. So many agencies generate revenues in other fashions.