Many people speculated that Rodney Fernandez, who was working for Hendricks Sports Management at the time, had a big role in causing Chapman to make the move.  Also, as I mentioned in a post on February 15, when Chapman made the switch, many inferred that Hendricks client, Kendry Morales, played a big role in the change of agents.  But last month, Morales also moved agencies, ditching Hendricks Sports for Scott Boras Corp. Think players only change agents in football?  Think again.

What is interesting is that the man who recruited Kendry Morales to Hendricks Sports and is claimed to be the person to woo Chapman to the same agency, is now being investigated by the MLBPA and the Coral Springs, Florida Police Department based on $300,000 magically disappearing from Morales’ bank account.  The article linked above also notes that Fernandez is a former employee of Hendricks Sports and that Fernandez was fired a couple of days after Aroldis Chapman signed that lucrative contract with the Cincinnati Reds.  The termination letter consisted of no more than three lines of ink.

Is the first word that comes to your mind after reading thus far, “shady”?

“From June 2008 until December 2009 [approximately 18 months], Rodney had been requesting PMR [Pro Management Resources] to wire money via Western Union to certain people without Kendry’s knowledge,” the report said.

Reisinger told investigators that Morales discovered the unauthorized transactions in mid-December.

So if Kendry Morales knew about this back in December, was the recent firing of Hendricks Sports unrelated?  If it was based on the unauthorized transactions, what took him so long to make the move?

In an interview Monday with ESPN The Magazine, Fernandez said that money taken out of Morales’ bank account was used for expenses related to Hendricks Sports Management, all of which was done with the approval of firm co-founders Randy and Alan Hendricks. Fernandez also said that the Hendrickses were supposed to reimburse Morales for the money but never did.

“If I’m supposedly the person who took all that money, then how come now I don’t have anything?” he said. “I don’t deserve what is happening.”

Fernandez said he was told by members of the Hendricks agency to keep quiet about rumors of financial indiscretions in December and January so it would not adversely affect Chapman’s free-agent contract negotiations with the Reds.

It looks like Fernandez is going to try to take down Hendricks Sports with him, and whether Hendricks Sports is guilty of anything or not, this is not something that the agency needs while it deals with a pending lawsuit brought by Edwin Mejia and Athletes Premier International.

Is Hendricks Sports concerned that Chapman may be the next client to leave?  Whether Chapman stays a client or not, Hendricks Sports will make nice commissions on Chapman’s first contract, since they are the agency of record when Chapman agreed to the deal’s terms.

Yesterday, SportsBusiness Journal released its annual 50 most influential people in sports business list.  Baseball tied Football with locking up the most slots (8 for each), Jacques Rogge (President of the International Olympic Committee) was ranked #1, and six agent types/groups were listed.

#26 – George Pyne (President of IMG Sports & Entertainment)

#32 – Casey Wasserman (Chairman and CEO of Wasserman Media Group)

#37 – Michael Levine / Howard Nuchow (Co-Heads of CAA Sports)

#38 – Scott Boras (The Scott Boras Corp.)

#44 - Tom Condon / Ben Dogra (Co-Heads of CAA Football)

#47 – Rick Dudley / Phil de Picciotto (Presidents at Octagon)

Interesting fact: Casey Wasserman (@CaseyWasserman) is the only person listed above who has a Twitter account and somewhat regularly tweets.

Want to realize his true power?  At last week’s Winter Meetings (yes, they seem to be quite the topic of conversation around these parts this week), Boras was able to piss off San Francisco Giants GM, Brian Sabean, when Boras said that Sabean’s club needs hitting help.  Many agents would be extremely cautious about rupturing their ties with their limited connections in the business of baseball.  Not Mr. Boras.  He takes the heat for many of us, and his clients often benefit from it (as do ours).

This is what Sabean said in response to Boras’ comment,

“Well, you know, I never knew that we needed any more offense. I’m shocked to hear I’m the last to know. Scott’s a very smart man. He’s got enough money to buy a club. Maybe that’s the route he should go.”

And I thought that I was the king of sarcasm.

Drew Rosenhaus has had his fair share of clients that he represented prior to and during the NFL Draft, but he is mainly known for the sheer number of players who switch to him when it is time for them to re-negotiate their contract or sign their big second contract.  Rosenhaus’ competition hates it, and so they should.  As an NFLPA certified advisor, you most likely have to pay for your clients’ training, food, and housing prior to the draft (and anything else that comes up).  Then, if you are lucky enough to have your clients drafted, you will take a meager 3% at tops (many agents charge less just so they can compete with guys like Rosenhaus) of their professional contracts.  For non-first rounders, that figure does not come out to much.  Last, you can’t sleep at all because you are always worried that your clients will make a switch to a different agent before you are actually able to negotiate the big contract and make some sort of money to live off of.  Only to possibly lose your client to a guy like Rosenhaus.  Rough life, but you chose to live it.

In baseball, we rarely discuss a guy like Rosenhaus, who players flock to once they are ready to negotiate a big contract.  Scott Boras grabs all the bonus babies before they are drafted and rakes in his nice 5% advising fee early in their careers.  Sure, some players leave their agents for Boras, especially right before becoming arbitration eligible, but we don’t hear about it ALL that much.  In fact, Boras recently lost a big fish to a rival agency; one that might start making a name for itself as one that picks up players after they make it to the pros.

Hendricks Sports Management is run by Randy and Alan Hendricks.  The brothers started the firm in the 1970s, sold it to SFX, and then re-formed the agency in 2003.  They have been in the business for a very long time, are connected to basically every important person in the business of baseball, and have seen their fare share of arbitration cases.  There’s a certain comfort factor for players who are looking to make a switch in representation.  And they are quiet about the clients they actually represent (their website does not list any).  Once a team that represented 16% of all Major League players, after they re-formed the agency in 2003, they say that they are more selective about who they represent.

So why the possible relation to the Rosenhaus brothers?  Well, last year, the Hendricks brothers grabbed Rick Porcello from none other than Scott Boras Corp.  Recently, they signed former Cuba defector, Kendry Morales, who used to be represented by David Valdes.  Is this the start of a new business model for the Hendricks brothers or did they just offer to represent two players who were upset with their previous representation?  Definitely something to keep an eye on.

For the current Internship Program, Justin Herzig (our HR Director) received over 250 intern applications.  Some were thrown away after reading a couple of lines of the cover letter, but most applicants actually seemed extremely qualified for the limited number of spots available.  Do you need to have a law degree, MBA, or internship to break into this industry?  Read Jack Bechta’s story…the answer is no.  But it surely does help to at least have an internship.  Bechta is a part of a very small minority of people who can succeed in this very difficult profession by printing a few business cards and starting up a company with absolutely no experience.

Bechta mentions that there are several agents with a huge client list that never attended law school.  My response is that an agent is not graded by his client list.  There are also many players who end up suing their agent or leaving the agent because of poor execution of his job.  When I first started law school, I wondered myself why so many people said that it was so important for a person to attend law school in order to be an agent.  Criminal law, Torts, Property, Civil Procedure…yeah they may all come in handy, but probably not.  Then came Contracts, Corporations, Business Organizations, Intellectual Property…now it all makes sense.  The knowledge I have after going to law school coupled with the experience I continue to gain with my own clients makes me a better agent every day.

There is also going the route of Bechta and keeping an attorney on retainer for your firm.  I still think that if given the opportunity, go to law school.  Players like having a one-stop shop for all their needs (that’s why CAA, WMG, etc. continue to dominate).  I think that they also want an agent who can wear more than one hat.  To bring a personal knowledge of the law to every negotiation and not have to rely on another person seems to bring some extra value to the table.

As far as grad school for some sort of Sports Management MBA is concerned, I am not completely sold.  If you go that route, I think you should definitely heed Bechta’s advice.  Look at who the professors are and the subjects being taught before you spend all that money.

I can’t disagree with Bechta when he says that overall the 2 most important qualities for success in this industry are:

1. a competitive nature
2. determination

Along with that, I will add a third quality: 3) innovation.  There are so many agents out there going after the same clients, giving the same pitch, and providing the same services.  Do something to make yourself stand out.  Sorry, I already created SportsAgentBlog.com, so making a blog about the sports agent world will not really separate you.  Spend some time thinking about what you can do to make yourself a thing of value.  I promise that the time taken will be well worth it.

As of yesterday, baseball executives and MLBPA agents had crawled up into the Ritz and glitz of Las Vegas, but this trip is not to enjoy the blackjack tables, luxurious pool decks, and clubs that stay open all hours of the night.  The agents and executives are in Vegas for one of the most important baseball events of the year, the Winter Meetings.  Everyone will be “vacationing” in Vegas until Thursday, with many deals going down before that point-in-time.  Before the meetings officially kicked off, there was word of signing talks.  Of the twenty-four players offered arbitration prior to the deadline, only two accepted (David Weathers and Darren Oliver).  You better believe that the other twenty-two players and their agents are on hand in Las Vegas, talking to a variety of GMs and front-office execs.

One guy getting everything comped is the head of Boras Corp., Mr. Scott Boras.  Equipped with an army of aids and a plethora of statistical sheets by his side, he is looking to find over fifteen free-agent clients jobs this offseason.  Derek Lowe believes in Mr. Boras.  But the week is not all about Boras and his legion of clients.  If you are an MLBPA certified agent (meaning you have at least one player on a 40-man roster), it is likely that you have headed to Sin City to partake in the festivities.  The man with the most talked about free-agent player, C.C. Sabathia, is Greg Genske of Legacy Sports Group.  Brad Penny and Pat Burrell are among the other free-agents that Genske is shopping over at the Bellagio.  There has also been a lot of talk about two free-agents managed by the same agent.  Raphael Furcal and Fransisco Rodriguez (K-Rod) are represented by Paul Kinzer.  And as I said, this group makes up a very small portion of the players and agents in attendance.

But the Winter Meetings actually have a purpose besides allowing agents and GMs to meet up to discuss potential deals.  In fact, the original purpose was for it to serve as a yearly meeting for baseball execs to discuss the state of the sport amongst themselves.  One topic for concern this year is the slumping state of the economy.  Minor League teams are especially worried about taking a hit in sponsorship dollars.  I hope that we do not see the economy torment Minor League baseball like it has done to some “minor leagues” in other sports.

Anyway, soon enough, Dynasty will have the chance to show face at the Winter Meetings.  I am told by many agent friends that I should be thankful that I do not have to be a participant yet.  Apparently all agents dread this time of the year.  Drink some coffee and get some rest my boys!

“We’re going to do $300 [million]-$400 million [this year] in contracts like we did three or four years ago.”

Do the math.  Boras Corp stands to make $15-$20 million based on contracts negotiated this year alone.  One would have to assume that the number does not drop off tremendously from year-to-year.  I bet those figures pay the bills.

I also happened to like Scott Boras’ quote concerning outside investment in his company (of which, there is none),

“You can’t have bills because your interest has to solely be on the athlete. In the corporate world, a lot of agents have demands on them from the board. They have to make revenue. My attitude is that whatever you do in this business, whatever you own, whatever you have has to be paid for. That way when you’re negotiating, you’re negotiating strictly for the client, not for the need for money.”

I cannot argue with Boras on a single point of that text.  I have gone back-and-forth in my mind about whether I would accept outside investment in Dynasty, and often have denied it based on the same reasoning that Boras put forth.  As the sole owner of my company, I know that the only people I have to answer to are my clients, which is really how it should be.  The less potential conflicts of interest, the better you can be at representing your clients.

But it also meant, Boras said, that he lost money in his first 10 years in the business. Even Scott Boras, someone all of us have at least at one point looked up to, struggled in the beginning.  So keep up hope.  Even though it is a struggle, when there is a will, there is a way.  To all those trying to make it happen, whether it be starting up an agency or making things happen in another agency, keep on trucking.  You may be the next Scott Boras or even better.

16. Theodore Forstmann Chairman, CEO, IMG (2007 – #26)

37. Scott Boras President, Boras Corp. (2007 – #12)

43. George Pyne President, IMG Sports and Entertainment (2007 – #59)

46. Casey Wasserman Chairman, CEO, Wasserman Media Group (2007 – #79)

70. Tom Condon NFL Agent, CAA (2007 – #90)

98. Arn Tellem President, WMG Management (2007 – #83)

Not ranked. Gene Upshaw Chairman, NFLPA (2007 – #33)

Not ranked. Mark Steinberg SVP and global managing director of golf, IMG (2007 – #72)

Observations

• Similar to last year, I must say that IMG is getting mucho love from the voters.  Forstmann and Pyne received a boost; however, what the hell happened to Steinberg?  He gets his client, Tiger Woods, #1 for two consecutive years and has his name drop off the list?  Where is the justice in that?
• Gene Upshaw, may he rest in piece, must have been left off the list due to his recent death.  Had he still been living, I would bet my money that he makes the list in 2008.
• Wasserman jumps more than thirty slots but Tellem goes down fifteen?  Tellem absolutely tore it up this year with BJ Armstrong is his more than able wingman.  At least no basketball agent was positioned ahead of Tellem on the list.
• Boras has had his fair share of bad moments in the media this year.  While he is still making a lot of money for his clients, I understand why voters have positioned him lower on the rankings.

Last, here is an interesting opinion from Darren Rovell of CNBC regarding agents in this listing:

The most glaring omission from a sector standpoint is the agents. Most notably, Drew Rosenhaus, who I had as No. 20 on my list, is even not in BW’s top 100. Agents Scott Boras (37), Tom Condon (70) and Arn Tellem (98) appear on the list, but I might have had Aaron and Eric Goodwin on the list this year, particularly because of the shoe deals they structured for Kevin Durant, Dwight Howard and Candace Parker.

I agree.  Rosenhaus above the Goodwins, but all of them deserve to be mentioned.  Next question…

Yesterday, the situation took a turn when reports noted that Pedro Alvarez and camp Boras agreed to a 4-year, major league contract with a $6.355 million bonus (ESPN prefers to round up to $6.4 million).  Surprised that this bonus is for more than Posey’s?  Does it all boil down to an ego issue?  Maybe, but at least Alvarez and Hosmer may be able to take the field again soon.  A source cited in the Pittsburgh Post-Gazette believes that this new deal will put an end to the pending MLBPA grievance against the MLB.

I think John Manuel of BaseballAmerica.com says in the first line of his piece what we are all thinking right now: So the Aug. 15 signing deadline really isn’t a deadline after all.

The way that CAA and WMG have acheived their successes in the sports domain has been through the acquisition of prominent agents.  Before CAA and WMG; however, the first company name that comes to my head when I hear acquisitions in the sports realm is Blue Equity (BEST).  In fact, BEST may soon see its name up there in the discussion with CAA and WMG as the top companies representing professional athletes.

SBJ’s list of the top five agencies ranked based on the salaries of their athlete clients is as follows:

1. CAA – $670 million
2. WMG – $451 million
3. Octagon – $333 million
4. Boras Corp – $326 million
5. Priority Sports – $279 million