Sports Agent Negotiations

For me, contract negotiations are the most exciting part of being an agent. Agents often have to sit down with the same 30 or so general managers so it is important to maintain relationships while also representing their clients better than other agents. This seems like an uphill battle but three agents (Leigh Steinberg, Scott Boras, Ron Shapiro) have really stood out to me for both their performance and reputations. I managed to find videos of all three talking about negotiations.

In the Steinberg video, Leigh stressed the first step before going into a negotiation is to take an internal inventory and make sure your goals are clear. By having a hierarchy of values to fall back on during a negotiation, he is able to quickly make sensible decisions. One of his most interesting points was to leave your ego at the door. He goes on to tell a story about NFL quarterbacks Ben Roethlisberger and Philip Rivers. He admitted that because he was able to leave his ego at the door, he was able to accept a less desirable deal for Roethlisberger, which eventually turned out well. On the other hand, River’s ego wouldn’t allow him to take a less than desirable deal. During this time, the situation became even less desirable and the ensuing deal was far less lucrative.

In the Boras video, Scott talks about how a negotiation is not about a search for an amount but a search about a truth. He talks about using analytics as objective criteria so both sides can determine a sensible amount to pay an athlete. His focus in a negotiation is using substance over opinions. He also talks about how he restrains from using league standards during negotiations because his clients are typically not needed by most of the league. His clients are typically only needed by a handful of teams so they should be evaluated on more individualistic values.

In the Shapiro video, Ron began by playing the “ten dollar bills” game between two people who had to negotiate how to split ten one-dollar bills. This game was to demonstrate how a win-lose situation could immediately turn in to a lose-lose situation. His point was that both parties needed to have an alternative plan to avoid both parties losing in a negotiation. The most interesting point he made was that this process was called “negotiation” not “EGOtiation”. He stressed taking the egos out of the process so it is no longer a win-lose situation but a win-win outcome. This often times results in the desired mutually beneficial outcome.

All of these agents had similar advice such as leaving your ego at the door, seeking objective criteria over opinions and having some sort of goal or alternative in mind before entering in a negotiation. While I have always looked at agents having huge egos, it seems like the best agents choose to not bring them into a negotiation. This is probably the biggest reason for their successes relative to others in the sports industry.

Steinberg

http://www.youtube.com/watch?v=M8zo0bngWCc

Boras

http://www.youtube.com/watch?v=KEG7gID_h_E

Shapiro

http://www.youtube.com/watch?v=qtU3zrc-kIU

Can Agents Help Prevent Use of Prohibited Substances?

With over a dozen MLB players being suspended and the recent 6-game suspension of the Denver Bronco’s Von Miller for substance abuse, I still find it difficult to not see agents being proactive in discouraging their players from using banned substances. Not only do players lose out financially, agents also fail to earn commissions on lost income due to a player’s suspension. Shouldn’t the financial gain be enough of an incentive for agents to at least attempt to discourage their clients from using these substances?

The NFLPA recently released an alert on a supplement that has likely been taken by several NFL players. The alert insists that a banned substance was found in the supplement and that all players should immediately discontinue use and dispose of any remaining product. This once again reveals how easily a player can unknowingly and unintentionally take a banned substance. Under the NFL/NFLPA drug policy, the lack of knowledge of a banned substance in a product does not excuse a player from using the prohibited substance. A player will still face suspension whether or not they have knowledge of consuming a prohibited substance.

Players need to take every precaution to avoid these substances. Often times, players choose supplements they have been taking since high school or college, what their teammates use, randomly choose a supplement at a local GNC store, or blindly endorse a product without checking the ingredients of the product or the NFL’s prohibited substances list.

Agents deal with many players, have read the collective bargaining agreement and know what substances are banned.  Agents should consider helping players pick out supplements and research any prescription drugs they may be prescribed by doctors to prevent their clients from being suspended by the league. Agents often have the time and knowledge to prevent their clients from getting into trouble, so why are they not taking a proactive approach? Can agents be effective in preventing their clients from taking these substances?

Going Broke

Over the last several years, former (and sometimes current) NFL players’ sob stories hit the newswire about bankruptcies and extreme financial difficulties. According to Sports Illustrated, 78% of NFL players are broke within two years of retiring from the NFL. This alarming rate of players going broke should catch the attention of agents. While agents often don’t have financial backgrounds (or incentives to care about their clients future success after retirement), they do know how money works and how to manage their finances. Often times, agents introduce their clients to knowledgeable financial advisers. However, these young athletes find it difficult to relate to or understand the appointed financial advisers.

Agents need to take note of this dangerous trend and be more proactive in helping their clients learn enough about personal finance to avoid disaster. Since most college athletes are not allowed to work while under scholarship, they are not used to having money to manage. After graduating college, some of these athletes sign multi-million dollar contracts with large signing bonuses. With no real financial management knowledge, these athletes can go from millionaires to being broke within a few months or years.

There are numerous reasons players go broke from overspending, not saving/investing, poor investments, premature retirement (injuries), divorces or not planning for their lives after football. Some athletes do plan for their futures but because contracts are not guaranteed, they find themselves unemployed and not cashing in on their contracts. These athletes need agents to step up and provide them with a financial education as well as post-career planning to ease them into new jobs after retiring from football. Some players become analysts, coaches, or work in the front office of a football team. Others find themselves clueless on what they will be doing upon retirement. If agents had a financial incentive to manage their clients’ lives after they retire from football, we might not have this dangerous trend in bankruptcies. The NFLPA has taken action by proving a financial management education but agents have the ability and responsibility to at least encourage their clients to think about their futures. Will the NFLPA be effective enough or will agents have to get more involved? 

Players' Association Impacting Agents' Discipline

While sports have been around for over a century, the concept of sports agents is relatively new. Decades ago, sports agents became an occupation but not a very glamorous or financially rewarding career. The industry has evolved to be more lucrative for agents and has attracted some very greedy individuals. The industry has recently been overcome with scandals, infractions and agents taking advantage of their athlete clients. Professional sports leagues and the National Collegiate Athletic Association (NCAA) have been passing new rules at an increasing rate to rein in the unwanted behavior of agents.  The federal government has become involved as well as each individual state. It has now become expensive for agents to become registered in numerous states since agents have to register in every state they wish to do business in. It has become even more difficult for agents to learn and abide by the rules and laws of every state. Most states have recently adopted the Uniform Athlete Agents Act (UAAA) making it easier and cheaper for agents. Professional sports leagues and government will continue to pass more uniform laws to help prevent more intentional and unintentional missteps by sports agents but also to make it easier for agents to understand and abide by these laws.

In the last couple of years, it has also become necessary for players’ unions to step in and try to control the epidemic. The NationalFootball League Players’ Association (NFLPA) has even been busy this season discipliningagents for trivial offenses because they are unwilling to truthfully fill out their applications for certification as contract advisers. Agents Ethan Lock, Eric Metz and Vance Malinovic all agreed to pay $5,000 fines before an their appeal hearings due to their alleged offenses. Contract advisor John Rickert was also fined $5,000 and suspended for three months after failing to provide documentation he promised the NFLPA regarding a settlement with another contract advisor in a dispute about fees. As far back as November of 2010, the NFLPA pursued action against contract advisor Ian Greengross for numerous reasons including the actions of his recruiter Kenny Rogers. The NFLPA has been becoming stringent on their actions against agents who do not abide by their rules. This seems to be the new tone of leagues, state and federal legislatures, players’ unions and the NCAA. Dishonest and inappropriate behavior will no longer be accepted from agents and will be attacked from multiple sources and in a variety of ways such as fines, suspensions, and even jail time. 

The Difference Between Winning and Succeeding

As a young agent entering the business, I am still deciding who and what I am going to become. I am constantly looking for athletes, coaches and other agents to inspire me which led me to the website TED.com. The TED.com speaker that really inspired me was former UCLA basketball coach John Wooden who is affectionately known as Coach. Although I am 26 and living my adult life, I still seek ways to become inspired and to become a better me. Coach has always been an inspiration and his TED.com video titled "The Difference Between Winning and Succeeding" shares an even deeper understanding of how and when he developed his coaching and teaching philosophy. He shared with the audience about how his father raised him and the significant stories/events that caused him to grow/change his philosophies, which also garnered trust with the audience. He shared childhood stories and stories of when he first began teaching in grade school to show why his philosophy was so important.

His speech definitely helped me develop a deeper understanding of how I should measure my own success. One of his quotes that really stuck with me was, "Success is a peace of mind which is a direct result of self-satisfaction in knowing you made the effort to become the best that you are capable of becoming." To me, this means that life is not about winning or outscoring anyone. It’s not about acquiring more material things or getting more rewards for my accomplishments than someone else. Life is simply about becoming the best man I can with what I have been given. Life is about recognizing my best effort as a degree of success as opposed to my desired outcome.

Coach is well known for a model he created called the “The Pyramid of Success”. This pyramid can be found at his website and shows different traits of success as measurements of faith and patience. The pyramid consists of 15 building blocks and each block has a trait along with what he thinks what a person is to do to accomplish the given trait. By following this pyramid, it was his intention and my belief that a person will become successful. After a journey to grow each block and build my own pyramid of success, I believe I will become the best man and agent I am able of becoming.