Normally, the period from after the draft until camps start is the ‘low time’ for NFL news. Off the field, however, this is normally a time when major developments take place on the business side, from hiring and firing scouts to movements among NFL agencies. This has been the busiest summer in years for the latter of the two. Meanwhile, we’re seeing major investments with agents who have limited experience levels. Why is this? What are the factors accounting for such transition?
- The agent business is poorly understood: Few people in other businesses understand the intricacies of the sports representation model. The upfront costs (travel for recruiting, licensing and NFLPA registration, combine training, marketing guarantees and/or signing bonuses) are formidable and it takes a long time to get a return on investment. That’s complicated by the fact that until a contract is signed, the player has virtually all the power. The agent takes on all the risk. This makes for a treacherous career path.
- It’s expected that success in this business requires major backing: Businessmen that I’ve encountered seem to accept that they’ll have to pour lots of money into its NFL ventures while not seeing any immediate returns. Once, when I was approaching agencies on behalf of a private equity firm, an agent I spoke to discussed the ‘multiple’ that comes with investing in his company. His message: this business has cache, and its barrier to entry is very high, and the failure rate is even higher, so the pure dollars and cents of the business aren’t the determinant for the investment level he’d need to give up a piece of ownership.
- It’s a young man’s game: I’m of the opinion that there’s a greater chasm between older and younger generations today than there ever has been, for a number of reasons. This really manifests itself in the agent world. In this industry, you find that agents in their 40s and 50s have less success connecting with today’s athlete. While contract expertise is valuable, it has no value if you don’t have an ace recruiter. Younger agents who were once happy to bide their time with big firms, bringing them top players and accepting what was left over as compensation, aren’t happy with that anymore.
- This business is really hard, so you want control of your own destiny: The biggest disconnect I’ve seen between the football fan and the football business member is a misunderstanding of the player mindset. There’s a perception that agents and their active NFL clients are always ‘palling’ around, hanging out, and otherwise enjoying a relationship built on mutual respect and fondness. It’s the Jerry Maguire model, and it’s usually not accurate. Typically, the higher the player gets drafted, the less he feels the agent was central to the process, and the more he expects his agent to be out there finding him marketing dollars and otherwise justifying his existence. There’s a sense of entitlement that can be confounding. When you have to deal with that on a day-to-day basis, you want to make sure you’re being compensated at the highest rate possible.