At this point, we’ve covered the ramifications of the recently confirmed SRA that the NFLPA has published for the 2017 draft class. As you know, the default agent fee will be 1.5 percent v. the previous rate of 3 percent, which was already lower than all major sports.
We still don’t know how this will impact the agent business, though we know it won’t be good. With a week until the NFLPA’s deadline for paying 2016-17 dues, there’s a great chance several good contract advisors will opt to get out of the business.
However, problems for some could be opportunities for others. In the last week, I’ve had a handful of financial advisors ask me how I saw the new agent fee affecting their part of the business. Would it be a negative or a positive? Maybe, just maybe, this could be an opportunity for financial advisors. Here’s why.
- Good agents will leave the business due to this move. There’s no two ways about it. What’s more, eventually, the news of this move will trickle down to the young, motivated people who annually register to take the agent exam. This means it’s possible draft prospects could find a lack of good advisors that know the ropes.
- Financial advisors, many of whom (though new to the game) have an intense desire to help young players make smart decisions about their money, could fill the gap.
- The lion’s share of the financial advisors who can capitalize on this are younger and more patient though probably less accomplished. Elite financial advisors rarely want do the day-to-day hand-holding that the business requires; after all, they’re superstars in their own right.
As I mentioned, financial advisors are already starting to think along these lines. This year, we’ve matched up four former NFL scouts with agencies to work with them in the run-up to the draft. I had a financial advisor ask me last week if I thought this might work in his business. I told him I’d get back to him, and I haven’t yet, but I think maybe this is an idea with traction.
The rule of thumb in this business is that about every three years there is a major new development that hits the football business like a tidal wave, requiring agents, financial advisors, trainers and the like to adapt. Obviously, the less agile can’t, don’t or won’t adapt, but those who can identify these trends early can often turn them into opportunities. One previous such wave was the rise of combine training. Another big one was the shift from low-interest loans and letters of credit to marketing advances or outright signing bonuses to entice draft prospects.
We’re about to see how many people across the football world can benefit from this, and how many will get pulled under. Just maybe there are those in the money world who can make this an advantage.