I wanted to wrap a week of discussions on the NFLPA’s move to make 1.5 percent agent fees the default option with a couple thoughts based on discussions I’ve had with agents and trainers, this week and in the past.

• One of the biggest ways new and/or young agents can do to improve their chances of success is by partnering with bigger agents (I call it having a ‘big brother’). The way it usually works is that the smaller agent develops an excellent relationship with a top prospect, but knowing he can’t ‘close’ the player, pairs up with a major agent/agency late in the process (we regularly help pair up these parties, by the way). In the past, this was easy. Once the training fees and costs of recruiting were covered, the big and small agents split the 3 percent. Now they’re splitting 1.5 percent unless they can talk the player ‘up’ to 3 percent. There’s so little money to be made now that this partnership probably doesn’t work anymore.
• As trainers have come into the game and become a bigger part of the draft process, they’re often derided as making hundreds of thousands of dollars with no risk. Though ultimately they get paid whether the player is drafted or not, I can assure you they carry plenty of risk. Trainers almost always provide training up front, then often get paid once it’s complete. The temptation now, for less scrupulous agents, could be to stiff trainers completely.
• As a person who’s pretty comfortable with the ideas of capitalism, I think that, generally, the best producers are compensated the best, and to get the best people, you must be willing to provide a good wage. When you cut a fee that was already lowest among the three major sports in half, you’re going to hurt the service to your constituents. That goes not only for the lesser players, but ultimately for the players that really matter in the league. I feel the NFLPA is discouraging talented, smart young people from succeeding in the business as well as considering entering it. The number of people wiling to get certified by the NFLPA has always been almost insatiable, but that could end if steps like this continue to be taken.

For what it’s worth, this move has not been made officially. Not yet, anyway. But it definitely seems to be coming. We’ll see if the outrage generated by contract advisors so far is heeded by the NFLPA. Let’s hope the players association is listening.

As you may have read yesterday, the NFLPA-certified contract advisors we spoke to are not excited that standard representation agreements (SRAs) will now default to 1.5 percent, requiring agents to persuade their clients to pay 3 percent.

ITL’s Mark Skol got plenty more opinions from a wide range of agents, big and small, so we thought we’d pass along a few more.

• “Obviously, we now have to have more conversation with players. The bigger issue is that the culture, from both veteran players and the union, is against agents. So, beyond the initial fees, young players are coming into the league and getting poisoned by just a few people about the agent industry overall. It will drive out small agents as well as seasoned agents who are going to quickly tire of the attitude against them. Most people in life appreciate when someone works hard for them. Unfortunately, more and more players are displaying a total lack of appreciation, not only for the hard work, but for the expertise of seasoned agents. It takes many years to build up the relationships needed to affect a player’s career, and more than ever, this has been totally devalued. Additionally, baseball agents have their fees capped at 5 percent and basketball agents have their fees capped at 4 percent. There is no way a good football agent is worth less than a third of a baseball agent and less than half of a basketball agent. We are working through (how we’ll deal with the new SRA) at our firm and not 100 percent sure how we will handle it at this time. Most likely, we will have to sign more players, thus providing less time for the current ones. We would rather not do that, but are being forced to by ignorance and ungrateful people. As a side note, sadly, the vast majority of players are thankful and see the value, but are being drowned out by a few loud ones.”

• “The real issue isn’t the new SRA. We all know the lowering of agencies is coming with the NFLPA trying to get rid of all agents in general. That’s the main issue. The SRA, and I hate to be frank, but most football players and parents are (greedy). It’s the most money to pay the least money. The NFLPA says we have to convince the player why we need 3 percent, which really shouldn’t be that difficult for agents who do more than just negotiate contracts. The effect it will have is it will allow the larger agencies who only charge 1 and 2 percent anyway to convince players to not even consider small agents who need the three percent to function. Another issue would be it will take other agents out because they can’t afford to pay for training if a player is on the 1.5 percent. That makes it so certain agents can only sign certain players. That’s the way the NFLPA wants it, anyway. The NFLPA has been trying to run agents out of the business for the last couple of years and I think that is there goal. They want to do it but the players aren’t smart enough to realize it will hurt them. I will continue to do what I do anyway. I don’t buy players, so I will continue to lay out everything that I do for players, and that is worth 3 percent. Most other agents make you sign with them, sign with a business manager, sign with a travel guy, sign with a marketer, and you’ll end up paying 6-8 percent total because they want to charge more than 2 percent, but they’ll make their money back on the back end anyway. My approach is simple: you sign with me or you don’t.”

• “It’s a hard question because at this point you don’t know what the SRA looks like. . . . If you read the quote from (NFLPA President) Eric Winston yesterday he said the SRA is being reviewed by labor lawyers, so to say whether or not its been approved and when it’s coming out, I don’t think it would be fair for me to answer the question because I haven’t read anything on the SRA. (News reports have) said the default is 1.5 percent, and if I’m correct on the old SRA, it was 1, 1.5, 2, 2.5 and 3 percent. I think it’s the same thing, only thing is you have to state your case as to why you are charging 3 percent. They are not saying you have to charge a specific rate; you just have to state your case. You aren’t seeing too many people talk about this because it’s not set in stone that you have to charge 1.5 percent. It’s just explaining your position as to why you are charging three percent. I (will) have an addendum listing of everything that I do as an agent. I talked to my partner who is a lawyer and we both feel the same way. If you list the things you do as an agent, no player should have a question on what you do for them.”

About 99.9 percent of the football fans gearing up for the ’16 season couldn’t have cared less about the news that broke Monday about the NFLPA effectively dropping agent fees from a max of 3 percent — lower than any of the major sports — to 1.5 percent. OK, they’re not technically cutting it — players can now voluntarily pay 3 percent if they’re incredibly generous — but the players association has set the standard representation agreement to default to 1.5 percent unless otherwise noted.

Of course, if you read this blog, you are not the 99.9 percent. You’re the .1 percent that is focused on the business of football and interested in what shapes the game. I can tell you, based on the phone calls and texts I’ve gotten over the last 24 hours, that the NFLPA’s decision will shape the way agents work and how players are represented.

We spoke to several contract advisors this morning to get their respective takes on this. I won’t give attribution because I don’t want them to be targeted by the NFLPA for retribution, but I will run their responses to our questions in total.

Our questions: How will the new SRA, which allows agents to charge 3 percent but defaults to 1.5 percent, affect the business? Do you see it driving agents out of business? How will you deal with the new SRA/rate?

• “It’s going to drive a lot of small agencies out of the business. The margins in this industry are already small and the risk is already high. This increases both. Volume agencies will be able to cut their fees a la CAA last year, and sign more players that feel they’re getting a better deal. What the players will realize down the road is they also received inferior service in exchange for that reduced fee. If the union is there to help the players, they’re not doing their job in this instance.  I may be one of the very few, but all of my clients pay 3 percent, and I’ll stick with that. You get what you pay for and I think the good agents in this industry are worth more than 3 percent. There’s no reason we should settle for any less.”
• “I think it will eventually influence smaller sized firms to stay away from risky Day 3, late-round or UDFA prospects because the risk vs. return on investment may not be business smart. All players want training included, so if you are unable to convince that prospect why your services are worth the 3 percent, then I think an agent may not take that risk on him. The big firms can absorb those losses more than a small firm, but at the end of the day they are all about their bottom line as well, so late-round guys, guys who need agents the most, might suffer from this change. It’s possible (this will drive some agencies out of the business). Small- and mid-sized firms who are not getting Top-100 guys may run out of money before it comes back, based on a 1.5 (percent) agreement. Some agents may sign less prospects by sticking to 3 percent and decide it’s not worth it anymore. I will explain to the prospect that the NFLPA felt it was necessary to make the default 1.5 percent and that the fee has always been negotiable, but the actual maximum is 3 percent, and just have that discussion with the player.”
• “I think that it affects the business by creating a perception among both players and parents that the ‘standard’ fee is 1.5 percent. Obviously, that shouldn’t be the case, as it never has been before; however, when you label it as the default percentage, how can you blame a player or his parents when they tell you that you won’t even enter the equation for their son’s signature unless you charge 1.5 percent? It’s a tough way to do business. I think it could have an affect on agents trying to make their way into the business. Obviously, I’m curious to see how this first year or so goes with the new SRA because it’ll be a good litmus test going forward. However, you have to think that it could be a strong deterrent for a young guy trying to make it as an agent who now comes into the business knowing that the fee has been sliced in half. (As far as how I’ll deal with it), that’s a great question. I’m assuming it’ll be a case-by-case basis. I want to get a feel for the player, and if he has his parents involved or an aunt or uncle or somebody, I want to get a true gauge for them before I decide how I want to approach the rate.”

This time of year, I’m starting to hear from agents who were certified in 2013 and, despite having been in the business for three years, have never gotten a client on an active NFL roster. The NFLPA gives you three years to get a player on a team, even during the offseason when rosters are at 90-man limits, and if you don’t do it, it’s sayonara. You have to recertify — take the test again, pay your initiation fees again, the whole works. It’s a bad scene. It occurred to me that I’ve never addressed this on our blog, so I thought today would be a good time to do that, since we’re about two months away from the deadline.

August of your third year in the business is a bad time to satisfy the roster requirement. First of all, teams are looking to cut players right now, not add them. Though all teams maintain short lists, if your client hasn’t already made that list, he probably won’t be added late.
You have to be on a player’s standard representation agreement (SRA) prior to his addition to the roster. This means you have to play a guessing game, first identifying players that you think will be late adds, then approaching their agents and trying to sweet-talk them into letting you on the SRA (naturally, this requires begging, agreeing that you won’t steal the client, that you won’t accept any fees, etc.). Not an easy proposition.
Very often, an agent is scrambling in Year 3 because he blew off Year 1. This is easy to do. After all, being an agent is essentially commission sales, and that’s not an easy job. What’s more, you don’t get the go-ahead to start recruiting until after you’ve been certified, and you don’t even find out your test results until well into September. That’s after schools have had their agent days, and often players won’t talk to agents during the season. That means you’re left scrambling for leftovers in December/January, and at this point, it’s a pretty shallow talent pool.
For all these reasons, if you’re considering certification, or you’re waiting to get your test results back, make sure you don’t pass up Year 1. You just don’t want to be stuck making rookie mistakes in Year 2, and the later you start, the quicker the deadline arrives. We can help when you’re in dire straits — we do it all the time — but it’s not where we, or you, want to be.

It’s been almost a week since the ’16 NFLPA exam, and I’ve had several conversations with the 400-plus people who were there. Here are a few observations.

• My initial observation was that the NFLPA made the test a lot easier after last year’s exam cut the passing rate by about 30 points, from about 70 percent to just under 40 percent. After talking to more people, it seems they might have made it a little easier, but not appreciably.
• Where I think they changed things is that they made the pre-test seminar a lot better and more thorough. Last year, especially on the second day, the seminar was a bit of a blow-off; they even ended the seminar early and almost started the exam early. They must have taken fire last year from some of the candidates that failed.
• My impression is that Mark Levin, who’s one of the better officials at the NFLPA and certainly one of the more knowledgeable of the CBA, played a bigger role this year. If that’s the case, that’s a good move on the NFLPA’s part.
• If you’ll permit me to brag a bit, the people that seemed most confident about the test used our practice exam. We expanded it this year, and I think the 40-plus questions gave people an excellent look at what to expect. At least that’s what everyone told me.
• On the other hand, I spoke to one test-taker who freely admits he wasn’t prepared and didn’t perform well (and probably failed). This is incredibly refreshing. There are so many big egos in this business, especially when they’re first getting into he business, but this young man (who has an NFL background and who was fresh out of law school) essentially laughed at how not-ready he was for this test, and how lightly he took it. I mean, it was classic what-not-to-do-when-taking-the-exam stuff. We’re at least six weeks away from even getting the results for the ’16 exam and we’re already working with him, getting him ready for ’17.
• I think the era of the easy NFLPA exam is over, for several reasons. One, the NFLPA doesn’t really like agents, especially lower-tier agents. Two, the PA really struggles to vet all the applicants (every year, there are several applicants that don’t even find out they’re approved for the exam until a week or more beforehand). Three, the PA is always hearing from the big firms that there are too many agents. Four, the PA sees agent applications as an insatiable, renewable resource (and that may be right). No matter how many agents fail the exam, and no matter how many leave the business each year, they’re still going to have about 300 people taking the exam.
• I think you’re going to see an uptick in the size of the agent class this year, but it won’t be a landslide. Many of the 200 or so that were back this year for a second whack at it will pass (at least a hundred, I’d say), plus the 200-plus new test-takers were, generally, better-prepared, I’d say (we worked with an awful lot of them), so I’d guess at least a hundred of them pass. So my guess is that we get an agent class that’s more in line with the usual 150-200 that pass.

That pretty much wraps up our coverage of the ’16 agent exam. On to next year.

This morning, I got an email from a gentleman who’s registered to take the NFLPA exam later this month in Washington, D.C. He told me that at this point, he hadn’t “cracked the book” in preparation for the exam. His question — should he defer to 2017?

It’s a good question. Lack of proper preparation time is one reason plenty of people fail the test. I guess that’s true of any test, really, but especially the NFLPA exam. It’s even more true this year, after the test was made exceptionally harder than in previous years. With the pass rate for last year’s exam below 40 percent, it’s driven plenty of people to our practice exam, the only one on the Web. The 42 questions there are the only ones you’ll find that resemble what would-be contract advisors will see in our nation’s capital in two weeks.

When you register for the NFLPA exam, the players association sends out a copy of the CBA and source documents that make things a little easier. However, studying the entire CBA to pass the exam is a little like studying Encyclopedia Brittanica to pass your American history exam. I mean, the answers are in there, but so is a lot of stuff you don’t need. That’s why you need plenty of time to prepare. It’s also why many people take advantage of the study guide we offer. It’s not free, but reasonably priced, and gives many test-takers the tools they need to succeed. Especially if they don’t find out until a couple weeks before the test date that they’ve been approved. Which happens all the time. Literally.

Here are a couple other reasons people fail the exam.

• Lack of humility: If there’s ever been a job that attracts people with big egos, it’s the agent world. I guess the legal profession already has plenty of people with  outsized opinions of themselves, but when you stack on the (potential) status that comes from being part of the NFL, the arrogance zooms into the stratosphere. Of course, a lot of that goes away the second the seminar starts and the pure volume of information starts flowing. It can be very humbling. I’ve heard stories of people begging the more prepared guy next to them to help when they realized what they faced.

• Poor time management: The PA made last year’s test harder not necessarily by making the material harder, but by making the questions longer and more nuanced. The people who took it last year told me there were very few fill-in-the-blank or true/false questions. Instead, there were word problems that required nuance and comprehension. Many people go into the test figuring, ‘it’s open book, so how hard can it be?’ That’s a terrible approach. Last year, dozens of people wound up spending too much time on one answer, then found themselves scrambling to finish when the proctor called time’s up.

Today, I had a discussion with an ITL client who’s been an agent under five years. Though he’s still relatively new to the business, he’s incredibly knowledgeable and insightful, partially because he’s already had remarkable success in other football business fronts. Whenever he calls, I always check my watch, because I know we’re going to be on the phone for an hour and I have to make sure I’m not scheduled for anything for a while.

Anyway, today we were discussing recruiting, and the difficulty of converting a player from prospect to client, especially for people like him who’ve had tremendous success in business already (especially sports business). He said something that really resonated with me: “You have to realize that they’re the star.”

That was a Eureka moment for me. I’m always trying to convey to people new to the business, or who are considering the business, the challenges they’ll face. This is a great way to do it, especially to those who approach in the financial realm.

Many of these people manage money for doctors, attorneys, business owners and other high-net wealth individuals. This means they have millions, and sometimes billions, under management. It also means they have a certain amount of cache among people who themselves have cache. Then they come to the football world, and none of that translates. The truly elite player — i.e., the ones that will go in the top 30-40 picks, and the ones that will truly generate revenue — are super-specialized, and have been told that all their young lives. Financial advisors, even the good ones, are a dime a dozen, relatively speaking. To cross the bridge from just another guy to The One, that financial advisor has to do more than provide extra services, connect on a personal level and have the keys to the network that player travels in. He also has to swallow his pride, to some degree. That’s not so easily done, especially when you have to jump through so many other hurdles.

Brief story. I spoke at a seminar last fall, and while there, I met an accomplished financial advisor who was registered by the NFLPA, but who had not cracked the code for repping players. As he drove me to the airport, we talked, and he assured me he’d become an ITL client and take advantage of the tools we offer. However, as the weeks wore on, it occurred to him (apparently) that the nice car he drove, and the nice house(s) he owned, and the impressive clientele he worked with probably weren’t going to get him very far among flashy players in their early 20s. We lost touch, and I doubt I’ll hear from him again. Hey, I understand.

Of course, one day, these young men will be ex-players, and they’ll mature and start to realize the stature of the men who once begged them for their time. But it doesn’t matter then, does it?