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http://www.lawyers.com.au/legal-articles/2011/3/19/money-men/

MONEY MEN

Sydney Morning Herald

Saturday March 19, 2011

Sebastian Hassett

They might no longer lurk in the shadows, but player agents continue to hold a vice-like grip on professional sport. Sebastian Hassett delves into a money-driven world of wheeling and dealing. To: Edgerrin James.From: Leigh Steinberg.Date: December 7, 1999.Re: Contract update.With four games to play in your rookie season, you have already achieved all but one of the performance incentives available in your contract. About a month ago, you surpassed 701 rushing yards, which triggered the addition of more than $5,000,000 into the remainder of your contract (including an $875,000 bonus). Two weeks ago, when you passed 1000 rushing yards, you triggered an additional incentive of $1,500,000. This past weekend, you added another $1,375,000 by surpassing 1200 rushing yards. The last incentive, $1,000,000 for 1400 rushing yards, is only 190 yards away.Thus, you entered the season having earned your $9,500,000 signing bonus and your $350,000 roster bonus for 1999, and were salaried at the minimum ($175,000). Because you have rushed for at least 701 yards, you will receive an $875,000 bonus on January 31, 2000. You have qualified for $2,875,000 in performance incentives.You have already earned $13,775,000 in salary and bonuses for the 1999 season, which is already the most money a player has earned in his first season in NFL history. Congratulations.THIS is the world of the player agent - in this case it was American Leigh Steinberg and the deal he had negotiated for his client, Indianapolis Colts running back Edgerrin James. Agents speak the language of dollars before sense, and their mission statement is to end up swimming in it. The rule is simple: the better the deal, the happier the clients and the bigger the commission.It's a ruthless caper where the players are the honey and the agents are the bees. The good agents will carefully nurture their prospects through the harsh realities of a sporting life, while the bad ones churn through clients in the desperate hope of finding a star.Once an agent has a boom talent, he can go about building a stable. And if he can show a potential client he's capable of landing them a deal like the one Steinberg cut for James, half the battle has been won. Some make promises they'll never keep; others do deals that mean the player won't have to work again.But so long as the professional sports pie keeps growing, they won't ask for a slice, they'll take one - and then start haggling for a bigger one.Agents barely existed in Australia 30 years ago; now some are bigger than the athletes they represent.How did it came to this? When money surged into professional sport in 1980s, the suits soon followed. In the new millennium, it seemed every player had one, each one hungrier than the last to land new clients and bulging contracts.Now they're not just part of sport, but the news. In Melbourne, Ricky Nixon's alleged tryst with the girl at the centre of the nude photos scandal has dominated summer headlines. In Sydney, Sam Ayoub's recent arrest for allegedly attempting to obtain financial advantage by deception has put rugby league on the front pages again.It's thrown more light on the messy world player agents live in and how some choose to abuse their positions of power, which seems to be growing by the day. The question is being asked: Does sport need them?There's certainly enough of them. The NRL has 89 accredited agents, the ARU 65, the AFL 61. The FFA has 39, although all up there are 5842 accredited FIFA agents worldwide. In America, there are almost 700 NFL-accredited agents dreaming of their own Jerry Maguire moment.NRL chief executive David Gallop has had more than a few sleepless nights wondering about what stunt the men lurking in the shadows will pull next."There's a broad spectrum of competency across player agents. Some of them are very good at looking after their clients interests, and some, I can tell you, are very poor," he says. "It's been a largely unregulated part of the industry for a long time. It's only relatively new that we've had an accreditation system and a body that regulates the conduct of agents. Needless to say, that was well overdue."These days, agents have their fingerprints on everything. The stage-managed return of Tiger Woods was painstakingly hand-crafted by his manager Mark Steinberg. Khoder Nasser doesn't sign contracts, but everyone knows he pulls the levers on two of the Australian sport's most divisive figures, Anthony Mundine and Sonny Bill Williams. Until recently, Nixon was seen as the tsar of player agents. The Age even rated him as the fourth most influential person in the AFL during the past 10 years.However, some are doing just fine on their own. Russian Alex Ovechkin negotiated the biggest deal in National Hockey League history when he signed a 13-year, $US124 million contract with the Washington Capitals in 2008. This week, formula one driver Sebastian Vettel managed to seal a four year, $64 million deal - double that of teammate Mark Webber. Former NBA All-Star Stephon Marbury minds his own business, likewise Brumbies' flanker Stephen Hoiles.Former St Kilda coach Grant Thomas has no doubt professional sportsmen could benefit from following such a lead, agreeing players should ditch agents and hire a lawyer at renegotiation stage."I completely struggle in the concept of a third party getting paid money from a sportsperson's God-given talents and to negotiate a number that, in most cases, the player will get anyway," he says. "I know that's simplistic but most Australian leagues have a salary cap and a set amount of players. The market decides the value - managers just complicate the issue in an attempt to prove value to their client."Thomas, who handled all contracts in his time as St Kilda coach, says agents have little shame in making exorbitant demands, and even less understanding of a player's true value."I found them to be totally out of their depth and generally inexperienced in the art of negotiation," he says. "They didn't apply a great deal of logic to their stance. It was largely emotional, primarily history-based and unreasonably targeted towards the future. In essence, they wanted their client to be paid on hope rather than performance."Two decades in the industry has allowed Steve Gillis to see it all. He made the transition from a journalist to agent, and is now president of the NRL Players' Agent Association."The agent attends to pretty much everything you can imagine regarding a player. You name it, I've come across it. Even had a player ask me to fix his car once. I had to call him a cab," he says.And the risks you take on getting involved with the wrong agent?"It's a bit like getting married. A player needs someone who is trustworthy, reliable, fiercely loyal and competent at what he or she does. Furthermore, you need someone you can relate to. Pick the wrong one, and it may end it tears," he says. "Breaking a management agreement is a difficult process as they are legally binding documents. If a player isn't sure, he shouldn't commit."Rick Olarenshaw admits he became an agent because he "didn't make a mark on the AFL as I would have liked". He's making more of an impact as a manager with the Essentially Group, who hold registrations with AFL, league and union and have a reputation for signing much of the best young talent."A strong relationship with recruiters is important to identify young talent worth signing, then it's ethically important to follow protocols so that the approach isn't seen to be aggressive," he says. "Include the families, their local club, and show respect to other demands such as school exams. In last year's AFL draft, the Essentially Group signed four of the top 12 picks so it highlights that our process and service is professional and ethical."Olarenshaw knows about the peaks and troughs of professional sport. He played in a premiership with Essendon in his first year, and was considered one of the league's brightest youngsters before injuries struck him down."The most frustrating part to our industry is that there is no real barrier to entry; you can't wake up tomorrow and be a physio or a lawyer, but you can become a player agent without any real credentials or sports industry experience, just a briefcase of gifts and promises to secure clients," he says.But while league and AFL have strong policing measures against unscrupulous agents, football lags farthest behind, undoubtedly because of its global scope and huge transfer fees.Chris Tanner will have been in the agency business for 25 years this July but says it has scarcely improved. He's actively waged a war against corrupt agents in recent times in an effort to weed out the "bandits", and is now part of a global panel putting a proposal to FIFA on tidying up the industry."One suggestion is that every deal over a set value must be overseen in some point by a licensed agent or a solicitor," he says. "This, plus severe penalties against clubs and players who breach regulations, is the only way to fix corruption. What A-League club would like to lose 10 points and be fined $100,000 for breaching agent regulations? What player would like to be suspended for 12 months? That's what needs to be done."One thing is certain - agents aren't going anywhere soon."My advice to players is do some research before signing," Gallop says."And whatever you ever you do, find somebody who's interested in you 365 days of the year, not just the day when your deal is up for re-negotiation."Behind every great athletePAUL STRETFORD & WAYNE ROONEYWayne Rooney's transfer request earlier this season caused a massive outcry in Manchester, and many wondered why he filed it when everything, on the surface, seemed fine. The unspoken consensus is that Stretford was behind it. Manchester United panicked, and 48 hours later the club tabled an offer to make Rooney one of the world's highest-paid players, earning 250,000 - that's nearly $410,000 - per week. Stretford is said to take 20 per cent of Rooney's earnings, a much higher cut than most sports agents.LIAM PICKERING & GARY ABLETTGary Ablett is the son of Geelong's greatest player - perhaps the greatest player ever - and had become the best player of the game at Geelong, where he was already a two-time premiership hero. How was he prised away? Pickering plucked out a figure - $9.5 million over five years - and told Gold Coast to pay it or forget it. They coughed up, and Ablett jnr is now the highest-paid footballer of any code in Australia, earning almost $1million more per year than the next highest-paid players, including Nick Riewoldt, Chris Judd, Matthew Pavlich and Adam Goodes.KIA JOORABCHIAN & CARLOS TEVEZUntil "super-agent" Joorabchian came along, it was thought only clubs could own players. He changed all that - temporarily, anyway. It was his Media Sports Investments that "owned" Carlos Tevez, officially registering him with Brazilian club Corinthians (which MSI also owned). It was messy and protracted, eventually deemed illegal. When Tevez joined Manchester City last year, not only did Joorabchian get him a deal that made him the world's highest-paid player - at a reported 286,000 a week - but is said to have made City pay MSI 47m for his complete "rights". Joorabchian denies the figure was that high.DAVID FALK &MICHAEL JORDANMichael Jordan in Adidas? That's what he wanted when he entered the NBA, but Falk had other ideas. With Jordan fresh out of a starring role at the 1984 Los Angeles Games, Falk talked him into signing with Nike, which offered him $US500,000 and a small slice of revenue to wear its shoes. It was a snip for the swoosh - it sold $US130 million worth of "Air Jordan shoes" - but it would lay the foundations of the most lucrative ongoing endorsement deal in sport. In 1997, Jordan would sign a deal with Nike for $US30 million, dwarfing his playing contract, and 14 years later he is still contracted to Nike and continues to release Air Jordan editions, among dozens of ongoing endorsements. That's despite retiring in 2003.KHODER NASSER & SONNY BILL WILLIAMSNasser has become one of the most powerful wheeler-dealers in rugby league. He would stage a huge coup in 2008 by moving Sonny Bill Williams out of the NRL and into French rugby. SBW was under contract with the Bulldogs - for a further four seasons, no less - and it seemed impossible for him to get out. But Toulon wanted their man so much that they paid the Bulldogs a $300,000 transfer fee. Overnight, Nasser tripled Williams's salary to $1.5 million, a previously impossible figure given the NRL salary cap was pegged at $4.1million per club. French rugby is now one of the most active poachers of league talent.SCOTT BORAS &ALEX RODRIGUEZTen for 252 sounds like a cricket score - but that's the size (in US millions) of the decade-long deal Boras negotiated for Alex Rodriguez in 2001 with the Texas Rangers, then the largest sports contract in history. Baseball is known for its massive salaries but this blockbuster was a first. To show it was no fluke, when Rodriguez was traded to the New York Yankees in 2007, Boras broke his own record to win him another 10-year deal, this time worth $US275 million. Despite the success, the pair parted company last year.

© 2011 Sydney Morning Herald

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