Many agents take little to no commission on a client’s signing bonus when he signs a professional contract after being drafted in the MLB First-Year Player Draft. Thereafter, at a minimum, the client will ask his agent to pay for his equipment. Over multiple years, this cost adds up. All the while, the agent continues to earn no commissions, as it is unheard of for an agent to request a portion of the paltry salary collected by a Minor League Baseball player. Once the client breaks onto his club’s 40-man roster, the player will earn minimum salary, or a little bit above minimum salary. If the client is earning minimum salary, the agent cannot take any commission per MLBPA regulations.
You get the point. It is a long process before an agent ever earns anything substantial from his baseball client. The first instance where the agent expects a nice payday is when his client becomes eligible for arbitration, which is after the player’s third year of Major League service, or after his second year if he happens to have qualified as a Super Two. So it hurts a lot when that client leaves his agent right before he finally becomes arbitration eligible. For my football guys, equate it to representing an athlete through training for the draft, signing his first contract, and then losing him right before he signs his second NFL contract, which finally would net you decent money through your 3% commission.
The reason for this long winded explanation is that Jeff Niemann of the Tampa Bay Rays has switched from Creative Artists Agency (CAA) to Hendricks Sports. Niemann is a 6’9 260lbs pitcher who played at Rice University prior to being drafted as the fourth overall pick in the 2004 MLB Draft. He is not off to a great start this season, but the season is young, and if he manages to turn things around, the Hendricks brothers will hope to generate some nice new revenue from Niemann in the offseason.
Update (12:20 a.m. 4/18/11): I received note that Niemann actually switched agents quite a while ago, even though MLBTradeRumors.com reported that it was a recent change. Thus, the arbitration eligibility discussion regarding Niemann does not apply; however, these types of switches right before players become arbitration eligible do exist.
One reply on “On To The Next One: Jeff Niemann”
He signed for $3.2 million, so assuming a 4% take, the agency earned $128,000. Doubtful his expenses came close to anywhere near that figure as he probably had glove, shoe, apparel contracts. Even though they lose out on the arb years and free agent contracts, we should not act like the agency went broke on him.