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Sports agents score big
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September 5, 2000: 12:46 p.m. ET
Sports agents make big bucks for their clients -- and themselves
By Tatiana D. Helenius
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NEW YORK (CNNfn) - Kobe Bryant, Venus Williams, Roger Clemens. Some of the hottest names in sports are backed by sports agents, both on and off the playing field. But who are the folks taking care of business for new superstars? And what's in it for them?
'Show me the money'
Whether an agent is an independent entrepreneur such as 2X Inc.'s Jeanne McNulty, or part of a huge sports talent house such as IMG or SFX, they generally take a commission on deals they negotiate for their clients. A commission of 15 percent is fairly standard. Just to get a handle on the figures involved, recent deals in the news include NL MVP Chipper Jones, who inked a six-year contract with the Atlanta Braves for the princely sum of $90 million. A 15 percent commission on the contract would mean a $13.5 million paycheck for the agent.
 Other biggies include New York Mets' Mike Piazza, signing a seven-year contract for $91 million, and Los Angeles pitcher Kevin Brown's seven-year $105 million contract.
Outside of team sports, the stakes for solo players such as golfers or tennis players are also less than paltry. Tiger Woods, for example, tops the 2000 PGA Tour money leaders, having earned out some $7.7 million in prize money by late August.
And networks and corporate sponsors looking for viewer eyeballs -- and wallets -- are pouring even more money into a number of sports. For PGA events alone, for example, the total purse money has risen from about $46 million in 1990 to a recent $157 million.
Dollars and scents
Sports agents take care of the fine points of contract negotiation, but endorsement and merchandising deals are also a big part of any sports franchise.
"Some players make a fair amount playing their sport," points out McNulty, "but make a significant amount more through endorsements."
In 1997, for example, Detroit Pistons' Grant Hill, who recently signed with the Orlando Magics, inked a seven-year $80 million endorsement deal with athletic apparel manufacturer Fila. At the time, Chicago Bulls' Michael Jordan had already inked a $20 million a year endorsement deal with sports gear giant Nike (NKE: Research, Estimates).
And Tiger Woods has taken over as Nike's endorsement MVP -- the company signed the PGA champ in 1996, the year the vibrant young golfer turned pro. He is currently under contract with Nike, serving as the face that gets consumers to buy up a range of apparel, footwear, hats and -- of course -- golf balls.
Nike is also looking to negotiate a long-term deal with golf's golden boy, said Mike Kelly, director of marketing, Nike Golf. "Tiger Woods is the most visible golfer in the world, and his personality and image reach outside the golf world -- he's been very good for the brand."
 So really, an athlete's income from playing the sport is often just the starting point. However, off-the-court income ranges widely. "Tools of the trade opportunities are among the most common," said Ivan Blumberg, president, SFX Sports Group Talent Management. "That boils down mainly to sports gear -- sneakers, sports clothing, golf clubs, tennis rackets, basketballs, footballs, baseballs, hockey sticks."
Of course, Blumberg points out, "Then there is everything else -- soft drinks, cosmetics, computer equipment, telephones, automobiles, even food. It all boils down to an athlete's marketability, the ability to persuade a consumer to purchase a particular product because that particular athlete endorses it."
Tiger Woods, Michael Jordan, Peyton Manning, Ken Griffey Jr. and Jeff Gordon top an ad exec's dream list, according to Bob Williams, president, Burns Sports. Burns' own endorsement MVP list is based on an annual survey the sports marketing firm does with the some 1,500 execs behind major ad campaigns.
Williams often faces off with sports agents, negotiating deals between the athlete and the corporation that wants a "name" face to plug their product.
Burns' latest deal brought Tour de France cyclist Lance Armstrong and soccer champ Mia Hamm one-year contracts with AIM, a mutual funds group.
Playing with the big guys
International Management Group (IMG) is perhaps the best-known sports talent management franchise. In the 1960's, legendary golfer Arnold Palmer relied on a trusted friend, Mark McCormack, to keep a legal eye on contracts under consideration.
McCormack's reputation for giving sound advice eventually built the company into an agency powerhouse with offices in 21 countries. Monica Seles, Bjorn Borg, Joe Montana and Wayne Gretzky are among past and present clients of the agency giant.
SFX Sports Group Talent Management, a division of mammoth SFX Entertainment (SFX: Research, Estimates) numbers Michael Jordan, Kobe Bryant, Patrick Rafter, and Roger Clemens among their clients, and represents athletes in seven major professional sports. Their Sports Group franchise also includes the television production, marketing, and group events units that put together mega-events for Major League Baseball, the NFL, and the ATP.
Smaller boutiques, such as SMS, typically handle a single sport -- tennis, for example, or track and field.
Getting there
The background and career paths of sports agents are varied, there's no one good way to jump into the business, said SFX's Blumberg.
"There are formal sports management programs, but that's not the only way to go. Some client managers are attorneys, but that's not always necessary. Some have MBAs, or marketing expertise, others come out of a background with various players associations, others have worked for sports equipment manufacturers -- and others were athletes themselves," said Blumberg.
 2X Inc. CEO McNulty is a former collegiate basketball player.
McNulty, who now represents women athletes exclusively, got an early lesson in the difference between a good agent and a bad one.
"I had a great experience in one country and a horrific experience in another. The difference was a great agent in the first and a terrible agent in the second. I understand what the players need from an agent as I was once a player," said McNulty. "As an agent you can farm out the legal aspects of the job, but not the experience and the understanding."
Claudio Hermenjat, co-owner of Switzerland's SMS, became a sports agent after spending years arranging corporate sponsorships. He also just happened to be childhood friends with pro tennis players George Bastl and Mark Rosset, both now clients of the independent sports talent management company. Hermenjat plunged into the business just a year ago, but the small company already has ten clients on their roster.
Providing time to focus on the game
Beyond contract negotiation services or financial planning advice, agencies support their clients in a number of other vital ways.
"Our definition of full service might include helping a client find a new apartment, a good training base, a solid coach -- helping them with last-minute airline reservations, arranging hotel bookings, making hassle-free pickups at airports at various tournaments, or replacing a racket lost on an airplane," said Gavin Forbes, VP, Racket Sports, IMG.
Whether large or small, agencies often attract clients based on trust and reputation, said Hermenjat.
"A sports agent is a client's legal and economic representative. They depend on you to negotiate contracts for them, to make sure they are protected, that their income is managed sensibly, so that their only concern is what it should be -- playing the best game they can play." 
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