Held the night before the official NFLPA’s annual required training, Inside the League sponsored its annual gathering of agents at the NFL Combine. The meeting was led by long time agent Peter Schaffer who set a strong leadership tone for the conversation. The agent community has long been splintered into factions, and the divides typically look like this:
- Large agencies;
- Successful smaller agencies;
- The solo guys;
- The dabblers;
- New agents.
The challenge has been to bring these groups together, because while they compete against each other, the only way to protect the value of the agent and to fight against the NFLPA’s attempts to reduce compensation and restrict activities, is for the agents to work together. The larger agencies usually do not want to be involved with the efforts to reform the system, since they are the ones that usually have the resources to spend the money on recruiting and servicing clients that the other groups cannot afford. So efforts to restrict any of those tactics run counter to their professional objectives.
Schaffer sought a unifying environment as he led the conversation into the following areas:
- Payments to players over 52 weeks
- Strike preparation
- Agent Association
- New leagues
INDUCEMENTS—One of the biggest issues for anyone trying to break into the agent business is how to compete with the large inducements given to players coming out of college. One of my ongoing criticisms of the NFLPA has been its fictional attempts to enforce its regulations. Though it purports to ban “inducements” the NFLPA has repeatedly refused to consider marketing advances, training payments, living expenses and many other items paid by the agent as inducements. The NFLPA says that anything paid after the player signs is not an inducement, essentially meaning that an agent can show you what he paid for other players last year, and that does not constitute an inducement. In any other body of law, that would clearly be held as an inducement. Schaffer quoted research which showed him that the average agent netted less than $5500 per client, a number that is far lower than most new prospective agents expect when they enter the business. Under this business model, he said that “nobody is making money.” This number is likely skewed up based on the successful agencies, meaning that for most new agents, this is not a viable business, a viewpoint reiterated by many solo agents and those trying to break into the business. The $15,000 training bills along with six figure marketing guarantees are significant barrier to entry for most agents.
TRANSPARENCY—One frustration for agents (and many others) has been the lack of transparency in this process. The addendum’s that agents ask players to sign have never been released and so there is no way to tell if the agent (or player) is being truthful in their characterization of the relationship. Without transparency, many players (and their families) are not comparing apples to apples in the selection of their agent. Schaffer would like to see the addendum’s standardized and allow the agents access to a database that shows what the players are being offered and promised.
PAYMENTS TO PLAYERS OVER 52 WEEKS—An ongoing challenge for NFL players (and athletes in many other sports) is their ability to manage their finances. The NFL pays the players on a 17 week schedule. This means that they have seemingly huge amounts of money in every paycheck. This distorts the reality that the money they are paid needs to last an entire year. While the amount that they are paid is enormous in any normal context, the players are typically inexperienced in managing money and fail to take into account some critical elements: 1) They need to pay taxes; 2) They need to make the money last an entire year; and 3) They are likely to have VERY short careers. Some agents believe that spreading the payments of 52 weeks will help with those issues. This is one of the few areas where I disagree with the push of agent group. My advice to my clients is ALWAYS get the money as early as possible. I would much rather have the money in my hands than in the hands of another party. Good planning and financial management can help alleviate the other issues for the players.
STRIKE PREPARATION— Everyone in the football world is anticipating a strike when the current Collective Bargaining Agreement expires in 2020. It is hard to imagine how any extension will be reached in advance of that time. So what this means, is that the players may face a lockout and may need to be prepared for a work stoppage. The agents are recommending that the players start putting away 10% of the money from each game check, 20% of the playoff money and 50% of performance bonuses so that they have the funds to endure a lockout. Negotiating from a position of strength is always preferable and by making sure the players are not desperate to take any deal, it will be give the Union some backing in the negotiations.
AGENT ASSOCIATION—A long overdue initiative, an agent association will ultimately help the players as well. This association will give the agents some leverage with the NFLPA and possibly even with the NFL. There are a multitude of issues that the agents face regularly that are dismissed completely by the NFLPA as either unimportant at all or not relevant for the power agents that the NFLPA has long catered to. The room was surprisingly unified in the desire to create an agents association and many agents expressed their willingness to pay a fee that would be required. One important note in this area was raised by longtime agent Jack Bechta, as he strongly cautioned the agents against litigating with the NFLPA. Bechta’s fear was that it would ultimately cost their own client’s money and that given the expense it would be unlikely to produce any meaningful changes.
NEW LEAGUES—The event was Co-Sponsored by the XFL, and former Buffalo Bills GM Doug Whaley spoke to the agent group. It was interesting to hear some of the input the XFL has taken from the agents, most notably, that the XFL will have the agents paid directly by the league. This is a significant change since one continual battle for many agents is to have their players pay their fees and expenses. The NFLPA’s refusal to allow this payment structure is the cause of many fee disputes, because it is easier for the player to just “not pay” without any good reason.
It was refreshing to see so many agents addressing the issues that have plagued the agent community since I was first in the business in 2000. Sadly, the issues really have not changed and the agents have never pulled themselves together. Prior attempts to create an association have failed, frequently because the individual leading the charge did not have enough respect in the agent community.
Schaffer seems to have that respect and seems to be marshalling the resources that are needed to make an agent association a reality. It will be interesting to see how the NFLPA reacts at Friday’s meeting and over the next several months.
The one noticeable absence at this meeting was the large agencies. There did not seem to be any representation from CAA, Athletes First, or Rosenhaus Sports, three of the biggest agencies.
An agents association would ultimately serve the players better as well, a fact which seems to escape the notice of the NFLPA.