Source: Herald Sun

A lot of uncertainty came with the introduction of the new Australian Football League (AFL) franchise Greater Western Sydney (GWS). As seen in the previous season with the Gold Coast Suns, players were able to be ‘poached’ from other clubs with the clubs who lost players receiving one or two compensation picks.

The news of Tom Scully defecting from Melbourne, the club who drafted him No.1 overall two years ago, should not be a surprise. There was no way Melbourne was willing to match the $6 million over 6 year deal put forth by GWS, with $2 million being paid in the first year. Many Melbourne faithful were outraged by a player only drafted two years before leaving so easily. But Melbourne fans shouldn’t be hasty at thinking they were the ones left punished.

Melbourne has received two picks in lieu of Scully leaving; a first round pick selection and a mid first round selection. The first round selection will fall after their initial first pick. So if Melbourne receives pick 9 in the draft, it could use this compensatory pick at pick 10. The mid first round pick will be slotted in after the pick of the team who just missed the finals, which is likely to be around 11-15, depending on how teams use their picks. The bonus of these picks is they can be used anywhere between the 2012-2015 drafts.

With this in mind, the 2012 draft is shaping to be a ‘Super Draft’ – a draft stacked with immense talent that will help a club like Melbourne, who is rebuilding for the future. Having a total of three picks in the first round will certainly give the team an advantage over other teams in the same position. Alternatively, having three bargaining chips in trade week will certainly help bringing high quality players from other teams to the club.

Now let’s take a quick look at what Melbourne lost – Tom Scully. Having played 31 games for the club, the midfielder missed several games because of a knee injury; one that Dr Peter Larkins believes may hinder him from playing a full season. Scully had surgery on his left knee before he was drafted, and that injury plagued him this season, allowing him to only play 10 games.

So while many Melbourne fans may be up in arms about the prospect of losing their prized player, it appears things are not as bad as they seem.

Why Melbourne Won Out In The Tom Scully Deal from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

With the NBA still no closer to a resolution over the lockout, many players are upping their interest in playing overseas.  First off, it was the fringe players who sought out deals, realizing that their playing career in the NBA would be most hurt  by the stoppage.

Noting this, recently re-signed Portland Trailblazers guard Patty Mills rejected overtures from Europe to come back to his hometown of Melbourne, Australia to sign with the Melbourne Tigers. Patty Mills could have accepted more money elsewhere, but the idea of playing in his hometown won him over.

Australia’s NBL isn’t a particularly strong league, with crowds ranging between 2,000-5,000, and sometimes more for blockbusters. With the addition of Patty Mills, a growth in crowd numbers of around 20% per game would not be out of the question, which would result in a win for the league.

The ‘Crown Jewel’ of Australian Basketball is by far Andrew Bogut. The former No. 1 overall pick has flourished in Milwaukee, and his success has led to increased coverage in his home country. Whilst Andrew would love to play in the NBL during the lockout, there is one major hurdle – his insurance.

With Andrew due to make around $40 million over the next three seasons, he wants to make sure his insured in the case that he goes down due to injury. The insurance figure alone is $500,000.  This has scared off many teams, leaving primarily the Sydney Kings doing the most wooing.

I don’t think think the salary paid to Bogut during his NBL stint is the major factor, but more-so the clubs facilities and ambitions. With the Sydney Kings operating in the biggest market in Australia, this could be the deciding point.

The interest in playing in Asutralia’s national league doesn’t just stop at the two Australians. Patty Mills’ Portland teammate Wesley Matthews recently had a twitter exchange with Patty about whether there’s room down there for him. However, with only two teams holding spots for imports on their rosters, the move seems unlikely.

Now, a new player has emerged – Bogut’s Milwaukee teammate Brandon Jennings. Jennings recently tweeted the following:

“Seriously thinking about going to Australia to play with @AndrewMBogut………..”

“I’ll come to Australia if @AndrewMBogut let me borrow couple cars while i’m out there….”

While you can’t read too much into the tweets, it certainly opens up the possibility, especially with Andrew Bogut driving the move. However, a club would have to move its current import for him if it were interested.

The NBA lockout certainly has afforded opportunities to many overseas leagues and fans to see the best talent in basketball, and it appears Australia is one of many who will be in luck.

With Patty Mills Signed, Will Andrew Bogut Follow To The NBL? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

After what seemed an eternity, Australian’s superstar Harry Kewell has finally signed for Melbourne Victory. In what is a massive coup for the A-League, the Socceroo has decided, at 32, that the time is right to come back to his home.

But his deal is a lot more complicated than your standard contract, and sets quite the precedent. Whilst no exact terms have been released by either side, several media outlets have reported the following terms:

First and foremost, the Football Federation of Australia (FFA) is paying Kewell $500,000 per year. It is not uncommon for leagues to pay a portion of a player’s salary (See the AFL). However, Kewell had his image rights clause amended. Instead of the A-League holding all rights over the use of his image, it can only use his image in situations where it doesn’t conflict with his sponsors. No doubt the FFA won’t be happy with this, but it still leaves some wiggle room.

In terms of his Melbourne Victory deal, it is understood he will be receiving a base salary with heavy incentive clauses tied into the club’s revenue. Harry will receive 70% of any monies generated from him being at the club. The way this will be distinguished is by using last year’s figures. This includes areas such as memberships, gate receipts and merchandise.

So looking at these figures, one can make some assumptions. The membership figure pre Harry Kewell was hovering just under 10,000. Now that Kewell is at the club, the phone has been ringing off the hook for new memberships, with the entry level for an Adult being $190. It is not out of the question that Harry will bring in between 7000-10000 members, putting his cut at around the 1.1-1.3 million dollar mark.

In terms of attendance, Melbourne Victory averaged a little over 15,000 a game last year. Taking into account that a) 7-10k members won’t need gate tickets and b) most of the games are played at a 32,500 seat stadium, it is possible that the attendance may rise to 25-27k a game, with the bigger games attracting 40k. The bigger games are played at the roughly 53,000 seat Etihad Stadium. There are 14 home games this season. If he plays every one of them, and the gate increases by an average of about 12,000 a game, he could be looking at a figure over $1.5 million.  With more memberships comes more jersey and general merchandise sales, which Harry will receive a percentage of as well.

Adding all these factors up, it is quite possible that Kewell may make over $3 million in the first year, with a slight decline in the following two years. This would still equate to a higher pay packet than what he would receive overseas. However, there is the possibility that this groundbreaking deal could backfire and he ultimately could receive less than what he is worth.

The A-League itself is a pretty big winner too. With the caliber of players such as Harry Kewell and Brett Emerton returning home, it gives them quite a bit of leverage when re-negotiating its TV rights deal, which is due to expire in 3 years.

However, it’s the precedent that has been set which is a concern to some. While there is no one near as marketable as Harry Kewell in the realm of football in Australia, what’s stopping an international star from commanding the same deal? When players can command this sort of revenue sharing deal, it can leave clubs in financial turmoil, struggling to pay for other expenses after the star has taken his cut.

Breaking Down The Harry Kewell Deal from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Riddell, a current Rugby League player and Spriggs, a former AFL footballer took on the Australian Tax Office (ATO) arguing that the money that athletes pay to agents for their services should be tax deductible.

Riddell employed the services of SFX Management Group for his 2005-2007 contract, paying a 7% fee on his performance contract and 20% on his media and other contracts. Spriggs hired Connors Sports Management paying 3% of his performance contract and 20% of his other contracts.

In basic terms, under current taxation law, cost incurred by the payee in generating assessable income can be claimed as deductions on his/her tax paid. Riddell and Spriggs argued that their cases should apply due to employing a sports agent to handle their contract negotiation in regards to playing, media and sponsorship.

The conclusion was made that these costs were related to the players gaining assessable income and therefore should be able to be claimed as a deduction on their tax.

I am unsure of other countries’ tax laws, but this makes perfect sense. In other professions, if you undertake expenses directly related to the income you earn then you can claim these back. If a company hires a consultant to advise them on certain business decision,s that expense is tax deductible, so why should this be different?

So what are the implications for Athletes and Agents? Well, athletes will now have a few extra dollars in their pockets, resulting in a better lifestyle for them. As for Agents, it could be a selling point as their cut being justifiable. Not to mention, it may convince some players without an agent to start looking for one.

Show me more money! from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Whilst Michael Phelps was undoubtedly the King of the pool, the choice of the Queen is just as easy to clarify. Stephanie Rice won every event she competed in the games, adding 3 Golds to Australia’s tally.

Stephanie won the 200m and 400m Individual Medley and helped the Aussies win the 4 x 200m freestyle relay.

This 20 year old is bound for more glory out of the pool. Stephanie was with powerhouse IMG till not long ago, but has since jumped ship to International Quarterback, who also has fellow swimmer Grant Hackett in their stable. [Rice to become hot commercial property on return]

Already having posed for Men’s magazine FHM, Stephanie can add a multitude of sponsors to her portfolio.

Speaking on Stephanie’s marketability, International Quarterback’s Managing Director Chris White had this to say:
“Stephanie will skyrocket as a personality in Australia. She’ll be substantially rewarded and deservedly so. The phone has been ringing … there is no doubt about that.”

So just what sponsors will Stephanie bring? Having already inked a deal with Bonds (posing with former boyfriend Eamon Sullivan), the field is wide open for others. Companies in areas such as Financial Services, Jewelery, Food and Beverages, Cars and Cosmetics could profit by adding some Rice to their diet.

The brilliant thing about Stephanie’s marketability is that she appeals to all demographics. She’s beautiful, down to earth and fun – men want her and women want to be her.

At only 20, it is safe to say Stephanie has a bright future, which could include another 2 Olympics. It’s just a matter of capitalizing on the rush of excitement that has proceeded her current success.

Rice Queen from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The proposal was to make Australian athletes pay back their scholarships from the Australian Institute of Sport (AIS) under a HECS style system. [Sports stars could pay HECS]

HECS stands for Higher Education Contribution Scheme, and is similar to student loans. It is a way of providing financial assistance to students undertaking University studies. When your income reaches a certain level (currently in the high 30K’s), you are forced to pay a portion of your earnings over this amount off your debt.

The argument is that many athletes such as Lleyton Hewitt have used the AIS to further enhance their career and should be forced to pay back what was provided to them. A year’s scholarship at the AIS is worth about $50,000.

An argument for the athletes is that for the money that has been invested in them, they have returned intangible rewards to the public. Also, many athletes have donated their time to helping out their local clubs, communities etc. at no charge.

The proposal put forward is not entirely without merit. If you received HECS funded assistance to become a lawyer or an accountant, then when you have reached the threshold, you would have to pay.  So why shouldn’t sports stars?

There are a lot athletes who have held an AIS Scholarship and are barely scraping by. Less financially rewarding sports such as hockey and squash do not bring their athletes a large, if even sustainable income, so should they be exempt?

Also, an argument could be put forward that these athletes incur a large amount of expenses in plying their trade. Travel, meals and managers are all not cheap.

What would be a fair system? As I previously said, the current income level threshold is in the high 30K’s. Do we make it higher for athletes? One figure proposed was $200,000. Do you take into account their return to the community in the form of entertainment? How do you quantify that?

This topic is full of many arguments on both sides. On one hand being an athlete is a job, and their education should be treated like any other profession. The other side is that although being an athlete is a job, they are not the only ones gaining rewards from their play.

I Want My Money Back! from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules