A Preview Of Athlete Representation In 2014

2013 was a massive year in athlete representation. Jay Z got his first deal done with Robinson Cano signing with the Seattle Mariners. Powerhouse agency IMG officially hit the market, with WME just days ago being announced as the winning bidder, at a price estimated to be around $2.3 billion.

What will 2014 bring? Who are the athletes set to make it big? What are the agencies doing? I take a look at what to be expect from the industry next year.

THE LAWSUITS

Richie Incognito vs. Miami Dolphins

In November this year, Miami Dolphins offensive lineman Richie Incognito was suspended from the team for allegedly harassing his teammate Jonathan Martin. He has since filed a grievance against the Miami Dolphins for the suspension. The 30 year-old initially was suspended without pay, but is now receiving compensation. The sensitivity of the matter has meant that investigators have taken time to settle an outcome for the matter. Whatever the result is will have massive implications for not only the NFL, but for the sporting world in general. The issue of bullying has been rarely seen in professional sports. There has been talk of hazing, but nothing to the extent that Incognito allegedly inflicted on Martin.

O’Bannon vs. NCAA

Ed O’Bannon is a former basketball player for the UCLA Bruins. He has filed an antitrust class action lawsuit against the NCAA in relation to the organization using former students’ images for their commercial gain. His suit is arguing that after graduation an athlete should be entitled to compensation for their image. The case recently took a blow with U.S District Judge Claudia Wilken ruling that the suit cannot be filed as a class action. With this in mind, it appears now that O’Bannon has the task of reaching out to players to file their own individual complaints. The issue of college athletes getting paid is constantly up for debate, with University of Georgia and Georgia Tech football players wearing ‘APU’ (meaning All Players United) slogans on their gear during a game this year. In a promising sign for athletes, Electronic Arts recently settled a lawsuit with college football players to the tune of $40 million, and stopped production of their popular NCAA Football game. The magnitude of the O’Bannon case suggests that this will not be resolved anytime soon.

Rory McIlroy vs Horizon Sports Management

Despite settling his first right of refusal lawsuit with former sponsor Oakley, Rory still has another legal hurdle to overcome. He has launched action against his former agent Connor Ridge and company Horizon Sports Management. In late 2012 he signed an endorsement deal with Nike believed to be in the region of $250 million. At the time, Horizon had a deal in place with Rory that would see them collect 20% of all endorsement income generated by the firm. He has launched a suit citing ‘unconscionable contract’, and that the figure he should have been paying be closer to 7%. He has claimed that he was young, naive and that he did not have the benefit of a legal counsel to help him negotiate his representation agreement. He left the firm last year to start his own agency. Horizon are confident that they will be victorious in the suit, though in a case like this it is highly likely both sides will reach a settlement.

THE AGENCIES

International Management Group (IMG)

Just days ago IMG was bought by William Morris Endeavor (WME) for a fee believed to be in the region of $2.3 billion. With WME not having a hand in sports previously, it is likely that most of the business will remain (barring a name change). There will however be areas in which the company will likely contract, such as office support roles. The company had been angling to enter the sports business for some time. Now with the merger, it has created one of the most powerful sports and entertainment companies in the world, rivaling under bidder CAA.

Lagardere

Simply put, Lagardere are looking to expand. They acquired Crown Sports Management in October, adding 24 PGA Tour players to their already talent filled stable. The firm are looking to further enhance their golf division in particular, putting them on level pegging with Wasserman Media Group and the previously mentioned IMG. They already boast stars including Stewart Cink and Brandt Snedeker on their roster.

Wasserman Media Group and Athletes first

It was reported earlier this month that Wasserman Media Group (WMG) are looking at acquiring David Dunn‘s agency Athletes First. Athletes First are a major player in NFL representation, boasting a roster of over 100 players including Aaron Rodgers and Jamaal Charles. WMG are already major players as well, having Andrew Luck among a host of NFL players on their books. If the deal is done, it is expected both the agents and the players would move over to WMG.

THE AGENTS

Jay Z

Having already made a splash with his negotiation of Robinson Cano to Seattle, Jay Z is looking for a big 2014. This year his company Roc nation signed up NBA player Kevin Durant and NFL player Geno Smith for representation. He currently holds agent accreditations with the NBA and MLB. His firm will no doubt look to expand beyond the five players on their roster. watch this space.

Leigh Steinberg

One of the most famous agents is back, after having a stint on the sidelines to handle some personal issues. He has been re-certified by the NFLPA to represent athletes again. Prior to his break, he was one of the most celebrated NFL agents in the game, having a client list including Ben Roethlisberger and Ricky Williams. The real like Jerry Maguire hasn’t lost his passion for the business, and with as strong a reputation as he has, look for him to have a big 2014.

THE ATHLETES

Andrew Wiggins

What can be said about Andrew Wiggins that hasn’t already been said. He has been dubbed the most talented basketball player to come through the ranks since LeBron james. Currently playing for Kansas, the 18 year-old is predicted to go top 2 in the draft, and based on his already large profile, will receive several offers from agents looking to sign him up.

Eugenie Bouchard

Eugenie had an amazing 2013, capped off by winning the 2013 WTA Newcomer of the Year Award. This 19 year-old Canadian saw a leap to number 32 in the rankings, and has incredible marketability potential. She currently has endorsement deals with Nike, Babolat, Rogers and Tourna Grip. This leaves many untapped sectors for the tennis player to move into. Bouchard is currently represented by Lagardere Unlimited.

THE EVENTS

2014 Winter Olympics: Sochi

Agencies have been busy scrambling for endorsements in the lead up to next year’s Winter Games. Olympic rules prevent athletes from endorsing products in a window before, during and after the competition, so now is the time for the athletes to make money. Some Olympic athletes have constant marketability, but most are only fresh in minds when the Olympics roll by. This means now is the time you will see athletes endorsing products before the blackout period. After the games is just as, if not, more crucial. While the athletes are fresh in people’s minds is the time agents will be working around the clock to cash in on their fame.

2014 Football World Cup

Every World Cup there are players who are whisked from the unknown and into the spotlight. The World Cup is the best platform for players to showcase their skills to clubs all around the world. Inevitably, an unknown player will be chased by countless number of clubs after the event.

International Premier Tennis League

December 2014 will see the birth of the International Premier Tennis League, in which 8 franchises from around Asia will play in a round robin format over a four week period. The series has been likened to the Indian Premier League in cricket. Teams will each have between $6-10 million as a budget for their roster, and they will bid for players through an auction. Tennis had already seen a host of invitational events spring up, enabling players to earn a base fee. In fact, many WTA and ATP Tour events pay high profile players an appearance fee for their attendance. Presumably the league will consist of players inside the top 20, so it will be a nice little Christmas bonus on any income they already earn.

THE COMPANIES

Fantex

Fantex is a trading platform in which you can buy and sell stock in athletes. They first rose to prominence this year when they signed Arian Foster. The Houston running back agreed to receive $10 million in return for 20% of his football related income, thus valuing him at $50 million. However, Foster got injured and the IPO got cancelled. The company has also signed Vernon Davis on a deal of $4 million for 10%, valuing him at $40 million. While no athletes have officially begun trading, the company has still received plenty of press due to its unique offering. It is definitely a company to look out for in 2014.

Thuzio

Thuzio is the brainchild of former NFL player Tiki Barber, and it is set to revolutionize the athlete appearance game. The firm has an online system where an individual or company can book an athlete for anything from a lunch to a round of golf, even for a video message. It’s easy to use and many athletes are signing up for the service.

THE TRENDS

Equity Deals

Equity deals and celebrities have been around for some time. One of the biggest deals was 50 Cent, who acquired stock in Vitamin Water in an endorsement deal. When the company got sold, he earned far more than what he would have had he taken a flat fee. Many athletes are now considering these deals as they could garner long term success. Although a risk, there are agents who are skilled at finding the right deals, such as Bill Sanders, who recently moved from BDA Sports to PMK BNC.

Athletes Setting Up Their Own Agencies

In 2013 Rory McIlroy, Roger Federer, Andy Murray and Rafael Nadal all set up their own agencies. They left many high profile companies, with some taking their agent with them. I suspect this trend may continue. While most will focus on their own business, some like Roger Federer and agent Tony Godsick‘s Team8 may pose a serious threat to the larger agencies. Team8 has already signed up Juan Martin Del Potro and Grigor Dimitrov.

This is only a drop in the ocean of what this industry will bring in 2014. It’s uniqueness is what draws us all in, as you never know what the next day will bring.