Finding a professional athlete work during a lockout might amount to getting him on teams in other countries or minor leagues in North America. This strategy was widely used during the last NHL lockout in the 2003-2004 season. Players like Chris Chelios played with fringe minor league teams close to home and family while others like Joe Thornton, who went to the Swiss Nationalliga, gave a boost to European leagues across the pond.

Agents and advisors learned from the 2004 lockout and came up with strategies to maintain cashflow to their client in the event of a future lockout. With the current NHL-NHLPA Collective Bargaining Agreement expiring after the 2011-2012 season (unless the players use their option to extend it), agents are negotiating a very practical provision into newly signed contracts. The Lockout Provision calls for a player to receive his signing bonus in the year in which a lockout could occur.

Milan Lucic is the beneficiary of this new provision. Lucic recently signed a three-year, $12.25 million contract extension. Most of the buzz about this extension centered around the fact that Lucic will be paid over $4 million in each year of his contract, yet he only tallied 69 points in his two NHL seasons. Obviously, Lucic got a great deal and should be very happy with his agent’s work here. But Lucic can also play the next couple seasons without the insecurity of possibly not getting paid after the 2011-2012 season; that’s because the Boston Bruins agreed to pay Lucic a $1 million signing bonus in 2012.

Not only does the Lockout Provision provide players with financial security in a time of job insecurity, it may also enhance the NHLPA’s bargaining position during CBA negotiations. If the Lockout Provision becomes more common in contracts, the NHLPA can use the fact that some players will be paid regardless of whether they play as leverage.

My reading of Matthew’s piece is at a very apropos time.  I just placed my first basketball client overseas, and earlier today, discussed a possible NCAA rule change that would allow high school graduates to play professionally overseas and retain their student-athlete eligibility.  I believe that the rule change would open the NBA up to even more competition against the international market; athletes will be more comfortable with traveling across the ocean to play in a foreign country if they have previous experience playing there before college.

Matthew’s premise is that basketball competition overseas is now credible, which serves as a big threat to the NBA under its current collective bargaining agreement (CBA).  The The Union of European Leagues of Basketball (ULEB) and its exclusive Euroleague have been able to acquire strong talent from the United States in the past few years.  While the NBA does not allow any athletes under the age of 19 to play its game, FIBA (the entity in charge of creating rules and regulations in Europe), allows 18-year-olds to play in the ULEB.  FIBA does not regulate player contracts or salary caps, but teams may be bound by their country’s or European Union’s labor laws.  No salary cap means that players will be valued properly…remember rumors of Kobe Bryant considering going overseas…purely because the NBA’s salary cap restricts his ceiling.

Other benefits of playing overseas include the creativity that owners are able to use to secure players.  They often offer cars, residences, rent, and flights in their contracts.  Sometimes, players are even given the right to become partial owners of their team and can sell advertising space on their uniforms.  And then compare the Euro to the U.S. Dollar.

Meanwhile, the NBA implements a salary cap, allows owners the possibility to have restricted free agents, and tells 18-year-olds ready to play after high school, that they have to wait a year.

Epps says that a free agent transfer agreement with Euroleague is not plausible.  It would be challenged in U.S. and EU courts.  Instead, Commissioner Stern might want to consider expanding into Europe now, and create a few NBA teams across the Atlantic Ocean to compete in an NBA Europe.  I believe that an NBA Europe is an interesting idea, but it would have to be totally distinct from the NBA in the U.S.  Although there could be a “World Championship” between the winner of the NBA Finals and NBA Europe Finals.  That would make for some good T.V.

Another solution: Get rid of this one-and-done rule!

Walsh stated in another tweet, “NHL benefits w [sic] Olympic participation and players bear all risk!” It certainly seems that way. With varying degrees of success, the NHL is able to use the Olympic tournament as a showcase for the game. Although Gary Bettman and the owners say they dislike shutting the league down for two weeks in February every four years, the Olympics are quite a spectacle for the league. I don’t have any facts to back this up, but I have to assume that somehow the league benefits financially from the players participating in the Olympics. All 82 regular season games are still played, so there is no lost revenue from games not being played. The Olympic tournament is the ultimate display of skill, as the very best players in the world play against each other in a short, do-or-die format. From a fan’s perspective, it is probably the best hockey there is. How could the NHL not benefit from this?

A team’s fear that an injury may occur, though, is quite reasonable. In 2006, Dominik Hasek’s groin injury suffered during the Olympics quite probably cost the Ottawa Senators a shot at the Stanley Cup that year. However, is it really necessary for the NHL to suspend a player injured at one of these camps? Players train harder in the offseason now than ever before. They have to come to training camp in September in tip top shape. Would the same player be suspended if he was injured during an off ice training session or during a pickup game of ball hockey with friends? Some contracts may stipulate this, but I don’t know if the majority of them do.

Hockey Canada has secured extra insurance for players taking part in its Olympic Camp. The National Hockey League Players’ Association has also told participating players that they may want to purchase extra insurance on their own in case of an injury. While the likelihood of an injury is low (they aren’t going to be going full tilt at these camps), making sure that your client is protected (and his contract) is sound thinking for an agent.

In June, I wrote an article describing the future implications of the “decade deal” as I called it, on the National Hockey League. A player typically signs a deal longer than ten years for tens of millions of dollars. There are elements of risk and reward for each side. The team gets the player signed at a lower salary cap number than the player might have got on the open market, but a contract that long can sometimes weigh a team down (eg. the New York Islanders and Rick DiPietro). The player takes a little less money per year, but has the security of knowing that his contract is guaranteed for the long term, and if it is bought out, he still receives a significant portion of his salary.

Late last week, word surfaced that the NHL was probing the long-term deals that were signed by Chris Pronger and Marian Hossa shortly after the free agency period began on July 1st. Hossa signed a 12 year, $62.8 million contract with the Chicago Blackhawks, while Pronger signed a new 7 year, $34.9 million with the Philadelphia Flyers shortly after being traded from the Anaheim Ducks. Hossa’s cap number is just over $5 million per year and Pronger’s is just under $5 million. However, both players will earn the vast majority of their money in the first years of the deal. Under Hossa’s deal, he will earn just $3.5 total million in the final three years of the deal. Pronger will earn just $1.5 million total in the final two years of his deal. If not for those years, the players’ cap hits would be much higher.

The league is concerned that these types of deals violate the “spirit” of the Collective Bargaining Agreement. Since they will be earning far less money in the later years of the contract than the earlier years, it has been predicted that both players will choose to retire since they will have most of their money made. The league is investigating to determine whether this was considered by the teams before the deals were signed. If it is found that this was part of the negotiations, the Hawks and Flyers could face heavy fines and could possibly lose draft picks.

While it is unlikely that any stiff action will come out of the league’s investigation, it again raises the likelihood that this issue will be addressed in the next round of CBA negotiations. Gary Bettman has stated that he does not believe that these types of deals do not circumvent the salary cap, but all signs point to several heated discussions when the league and players’ association meet to begin negotiations within the next two years. It is up to the individual teams to determine how they spend their money, but if the league has its way, there will likely be one more restriction in place to limit spending and maintain parity.

Parker wants a lot more money than the slot value at pick #10.  He feels that Crabtree should have been the first WR taken in the draft (the honor went to Heyward-Bey).  Who needs this contract more, Crabtree, Parker, or the 49ers?  Parker and Crabtree are banking that it’s the 49ers.  According to ProFootballTalk.com,

Per a league source, agent Eugene Parker is telling the 49ers that Crabtree will sit out the season re-enter the draft in 2010, unless the team gives Crabtree what he wants.

I’m calling bluff on that.  Crabtree already has a couple of big endorsements that he won’t want to disappoint.  Plus, what does a year on the sidelines do for his stock?  Stuff like this gives the NFL a stronger argument regarding slotting first round picks like the NBA does.  Should make for an even more interesting Collective Bargaining Agreement discussion in the future.

1) So that he and the general manager of his team does not enter a personal arena where playing on the team becomes uncomfortable.

2) Because he is “not trained in the language, rules or wording of legal documents.”

There are obviously many other legitimate reasons to employ an agent, but these two presented by Brown seem to be the most basic and traditional ones.  Point #1 can never be substituted for, but can point #2?  Seth Godin’s recent piece, Where have all the agents gone?, got me thinking a little bit about our profession.

Travel agents… gone.
Stock brokers… gone.
Real estate brokers… in trouble. Photographer’s agents, too.
Literary agents?

I have one to add: Sports agents?  Besides point #1, what makes us different than the other middle-men that have been forced out of their respective industries?  The only other thing that separates us is that our clients are a lot busier than a majority of those that employ travel agents, stock brokers, real estate brokers, etc, and while it is a stereotype and definitely not one that can be applied across the line, athletes tend to be less educated than many who would employ the aforementioned middle-men.  But that being said, can we be so confident that our profession will still exist five years from now?  In ten years?  If so, will there be a large downsizing due to a number of players deciding to go the route of self-representation?

Will someone or something come along that is cheaper, faster and more efficient?  While 5% on an MLB contract, 4% on an NBA contract, and 3% on an NFL contract may not mean much for the agent representing his client, it is money out of that player’s pocket nonetheless.  Is it money well spent?  When will there be an alternative to the standard agent, what will that person/thing provide, and what will be the cost?  It is a matter of time before someone steps into our profession with a new idea that changes the sports agent landscape forever.  In travel, it was the creation of sites like Kayak.com.  In stocks: ETrade, Scottrade, etc.  Real estate has also gone online with the spread of easily obtainable information.

So will the internet revolutionize our profession?  One thing is certain: athletes will soon be paying less for agents’ services, but that may not hurt agents’ bottom line.  I think athletes will get smarter and sign with agents who are the best at their profession, not those who pay the most for some face-time.  With lower recruiting costs, lower commissions are actually possible.  Athletes no longer want a “traditional sports agent”, and I do not blame them.  There is nothing “traditional” about the world we live in.  Every day, a new web 2.0 platform is unveiled that can be of benefit to a player.  How many players even know what web 2.0 is?  Should agents?

Will athletes ask their agents for the material that the agents use to negotiate deals, but negotiate them on their own?  Such a method takes care of Doug Brown’s second concern, but still does not get around point #1.  High-demand athletes will also continue to need someone to manage their appearance, endorsement, autograph, etc. requests.  Musicians have separate managers; athletes oftentimes do not.

Godin’s main point is that anonymous agents are unnecessary.

Middlemen add value when they bring taste or judgment or trust to bear on a transaction that isn’t transparent.

So maybe our job is safe afterall.  We supposedly go through the training: law school (not mandatory), learning the collective bargaining agreements, studying various performance bonus clauses used in the past, etc.  We bring a lot of qualities to the negotiating table that very few athletes can: a knowledge of the game outside of the game.  No matter how much you tell a player about how he compares to players at his position, age, height/weight, etc, nothing can make up for 3 years of law school or countless hours of studying a CBA.  So maybe Godin’s post does not apply to our industry.  Perhaps sports agents are necessary middle-men that should not believe that their job will be threatened any time in the near future.

The best ones provide a differentiated service that is worth paying for. Instead of being middlemen, then, they are the front men, the attraction, a key asset…

I think that is actually the main point of Godin’s piece that should resonate in our minds.  The best agents are the only ones that athletes will pay for.  To succeed, you need to innovate and buck tradition.  How can you use a site like Twitter to help your clients, how can you strengthen your firm’s online presence to help out your clients, are you connected to the new-age journalists who shape public opinion, are you busy trying to find new endorsement opportunities outside of traditional TV/print, etc.?

When markets change, agents can lead the way, not follow along grudgingly.

Call me whatever you want, but one thing I am not, is a follower.  Be a leader.  Show potential clients that you are willing and able to be innovative, which will only serve to better their careers.  That’s our philosophy at Dynasty.

There has been much concern about the financial conditions of NHL teams the past few months.  Obviously, a struggling economy isn’t good for any sports team.  So how will the depressing economic conditions of both North America and the National Hockey League affect NHL player agents?

NHL General Managers held their winter meeting last week, where they addressed the issue of how to counter the downtrodden economy.  It is expected that the salary cap will be reduced next year to help franchises deal with declining profits.  Since the 2005 Collective Bargaining Agreement was established, the salary cap has been $39M, $44M, $50.3M, and $56.7M this year.  A fair estimate is that the cap will decrease about $3M.

With the above in mind, let us consider the situation in which an agent represents an elite player on an average team.  Actually, make it twins, twins who have played together their entire lives.  They are equally talented and want to keep playing together.  Their contracts are about to expire, and it’s time to begin negotiations for contract extension (the NHL CBA prohibits contract renegotiation and allows extension negotiations only in the final year of the contract term).

This is the situation that player agent J.P. Barry faces in representing twins Henrik and Daniel Sedin.  Thus far, negotiations have gone well, but no agreement has been made.  The Sedin twins play for the Vancouver Canucks.  Vancouver’s GM, Mike Gillis, is faced with the challenge of fitting two elite players into a shrinking salary cap in a league with shrinking revenues.  On the other side, Barry is faced with the challenge of trying to secure valuable deals for two elite clients, on the same team, who have never played without seeing their twin brother streaking down the other side of the ice.  Players of similar stature have garnered significant contracts this year: Henrik Zetterburg signed a 12-year deal for $6.1M annually, Eric Staal signed a 7-year deal for $8.25M annually, and Anze Kopitar signed a 7-year deal for $8.6M annually.  The Sedin twins should be making somewhere in that ballpark.  It would be a significant raise for the twins who each currently make $3.575M annually.

Barry has called off negotiations to let the twins and the team focus on the rest of the season, so there won’t be much time to negotiate an extension when the season is over; NHL free agency begins on July 1^st.  A tough reality that NHL player agents must face is that their players’ salaries may not increase as much as they should.  The Sedins should be making around $7M a year, but their special circumstances of wanting to stay together, combined with the NHL’s less than desirable financial situation, create the reality that it just might not happen.  A mechanism that is extremely useful to MLB player agents, performance bonuses, is not available to Barry in negotiating the Sedins’ extension.  Per 50.2(C)(2), the NHL CBA allows performance bonuses for three categories of players: (1) players signed to an entry-level contract, (2) players at least 35 years old who sign one-year contracts, and (3) veteran players (played more than 400 games) who sign one-year extensions after returning from long-term injuries.  The Sedins don’t fit into any of the three categories.

Barry’s challenge in negotiating an extension for the Sedin twins will become the norm for NHL player agents if NHL franchise revenues continue to fall.  Negotiating lucrative deals for NHL players is harder than ever before.  So, to those agents representing elite players seeking more money…good luck.

The Braves were under the impression that Furcal was going to be representing the tomahawk next year in Atlanta, GA, but last Thursday, the Furcal signed a deal with the LA Dodgers.  Arn Tellem of WMG said that Furcal and the Braves never reached a deal.  The Braves said that Paul Kinzer, who along with Tellem represents Furcal for WMG, agreed to a deal with the Braves on Monday.  So who was telling the truth?  The Braves were confused, WMG was confused, and baseball fans in general had no idea what was going on.  What could be done to make the situation more clear?  Finger pointing!

This was said on Thursday by John Schuerholz, President of the Braves:

“Having been in this business for 40-some years, I’ve never seen anybody treated like that. The Atlanta Braves will no longer do business with that company — ever. I told [agent] Arn Tellem that we can’t trust them to be honest and forthright. I told him that in all my years, I’ve never seen any [agency] act in such a despicable manner.

“It was disgusting and unprofessional. We’re a proud organization, and we won’t allow ourselves to be treated that way. I advised Arn Tellem that whatever players he represents, just scratch us off the list. Take the name of the Atlanta Braves off their speed dial. They can deal with the other 29 clubs, and we’ll deal with the other hundred agents.”

WMG being completely cut off from a professional club?  Those were pretty powerful words spoken by Schuerholz and directed at the company with the #1 position in Jason Belzer’s 2008 Sports Agency Power Rankings.  Arn Tellem could not let Schuerholz make a statement like that without submitting a rebuttal.  His statement included seven main points:

1. There was never an agreement reached between Rafael Furcal and the Atlanta Braves.

2. In fact, the Braves were fully aware that Furcal was not prepared to make a decision but had requested an opportunity to sleep on it, before deciding.

3. Moreover, the Baseball rules which all agents and teams operate under are clear that no deal exists between a player and a team unless and until: (i) there is a signed and executed player agreement or; (ii) the Player’s Union and the Commissioner’s office have otherwise confirmed the deal.  Neither occurred here.

4. Furcal ultimately decided to accept the Dodgers’ offer, taking into consideration a number of factors the most important of which was his desire to continue playing short-stop and not make the position change to second base that the Braves were requiring.

5. Losing out on an all-star player like Furcal is always disappointing, and we understand the Braves’ frustration with the outcome of this negotiation, but it does not change in any way the fact that we conducted ourselves with integrity and complied with all rules of major league baseball throughout this process.

6. Our primary obligation is to serve our client’s best interests, and we will continue to do so in accordance with all relevant rules governing MLB negotiations and the utmost integrity.

7. If it serves our clients we will continue to present opportunities to the Braves, which in accordance with the rules governing Major League Baseball, the Braves must entertain. We hope that once emotions have subsided, the Braves will act in a manner consistent with not only their obligations under the Collective Bargaining Agreement and the National Labor Relations Act, but also the best interests of the franchise. In short, we would not want this incident to color their better judgment.

Without taking sides, I think that Tellem made a very well crafted statement.  It is very easy to read, cuts straight to the point, and was timely made.  Will it make Braves executives any more willing to deal with WMG and its agents in the future?  It depends on how limited of a memory Schuerholz and others in the organization have.  After Schuerholz’s statement, though, you better expect the MLBPA to keep a close eye on the Braves’ actions concerning WMG clients in the future.  If there is even a slight inclination that the Braves do not sign a WMG client based on the fact that said player is represented by Tellem or Kinzer, the MLBPA will be right on the case.

Will Brinson of AOL Fanhouse believes that the Braves should sue Arn Tellem for fraudulent trade practices.  I say that both sides decide to take this into a closed room, away from the media, and somehow come to an understanding over what transpired, how it may be corrected in the future, and how both entities can work together amicably.  The finger pointing, name calling, and public outcries need to stop.  It’s not good for either party, and does nothing to build the image of baseball or sports agents.

U.S. District Judge Paul Magnuson’s decision on Friday to uphold a District Court order temporarily restraining the League’s suspension of five players (Kevin Williams and Pat Williams of the Minnesota Vikings and Charles Grant, Deuce McAllister and Will Smith of the New Orleans Saints) for allegedly violating its drug policy surprised many observers who expected that a federal court especially was likely to interpret the matter under the bright-line language of the CBA and hold in favor of the League. Numerous apparent discrepancies in the League’s handling of the matter, however–including possibly withholding material information from players relating to the supplement at hand, StarCaps, a weight-loss substance containing the banned diuretic bumetanide; supposedly failing to respond to players’ inquires about the supplement through its supplement/drug hotline; and finally waiting months (the samples in question were from this summer) to announce the results of the tests and then implementing the corresponding suspensions late in the season, thereby implicating salaries and the playoff push–have apparently made the case a bit murkier than it first appeared. Judge Magnuson stated that he will need “more time to fully and carefully consider all of the briefs, arguments, and cases put before him,” and some pundits expect that the case will not fully be completed until early next year–possibly even after the Super Bowl.

Mike Florio at ProFootballTalk.com nicely lays out the hurdle the players will have to clear in the coming days/weeks/months in order for the Court to completely dismiss their suspensions and fines:

Typically in matters of this nature, the plaintiffs must prove that they will suffer “irreparable harm” if the defendant isn’t blocked from doing whatever it is that the defendant plans to do. The defendant in such cases usually responds by arguing that, since the plaintiffs can later recover a monetary award to compensate them for their lost wages and other damages, their available remedies are adequate and ”equitable relief” (e.g., telling a party that it can’t do something that it wants to do) isn’t appropriate.

In other words, the NFL will argue in this case that, because the players can later recover cash money from the league if it turns out that the suspensions violated their legal rights, there’s no need to stop the league from suspending them.

In this type of case, however, where NFL players have only so many seasons during which they can play NFL football and where that lost 25 percent of one season will never return, the argument in favor of a finding of irreparable harm might be stronger than most cases involving actions to be taken against employees.

The real battleground in this case could be the requirement that, in order to obtain an injunction pending the outcome of the litigation, the players must prove that they have a strong likelihood of eventually winning the case. The NFL surely is arguing strenuously that the legal theories advanced by the players are not valid, because the only potential legal claim that can be made in this case is that the NFL violated the Collective Bargaining Agreement and/or the steroids policy.

Regardless of the outcome, the lawsuits in question (both the above-named players and the union are suing the NFL) present serious questions about the implementation of the League’s drug policy. Moreover, the fact that the cards have been stacked against the players from the get-go, and that the League felt reasonably sure that it could waltz into Federal Court and have its way (it still may), is indicative of just how much control the NFLPA lost to the League in regards to disciplinary measures during their negotiations (the steroids policy, while not part of the CBA, was also the product of collective bargaining). As columnist Patrick Reusse of the Minneapolis Star-Tribune pointed out this week:

“Any union worth its salt would have hung tough in negotiations to create a disciplinary panel — one representative from management, one from the players and a neutral party — to decide these matters.

Gene Upshaw never fought that fight in his time as union chief. He ceded the authority to the commissioner, and now the players find themselves with Roger Goodell running amok and robbing their paychecks at every turn.”

Finally, given the NFLPA’s own lawsuit against the NFL in the matter, tensions are now even higher between the two sides in regards to their impending CBA negotiations. Goodell has seemingly had a good time flaunting his disciplinary authority so far, and his objective to polish up the League’s image is probably a virtuous one. That said, draconian hubris has a way of unfolding over time. Friday’s decision could be just the start.

A federal jury awarded over 2000 NFL retirees more than $28 million in damages last week after a three week trial in San Francisco in a class action lawsuit against the NFL Players Association (NFLPA). The lawsuit, filed by hall of fame cornerback Herb Adderley, claimed that the NFLPA actively excluded retired players from lucrative marketing deals in an attempt to increase the royalties for current players.

A particular point of contention on the part of the retirees was the use of their likenesses in EA Sports’ Madden NFL video games. The plaintiffs pointed to a letter from the NFLPA to EA Sports demanding that EA scramble the images of the retired players on the vintage teams included in the game so that the NFLPA could avoid paying them any royalties. While the Madden vintage teams used rosters with no-name players and likenesses, the retirees contended that the players were easily recognizable based on their characteristics. The jury agreed, awarding $7.1 million in actual damages and another $21 million in punitive damages to the retirees.

The jury award comes at a time when not only tensions between the union’s representation of current players and former players are high (not only over marketing, but over the highly publicized disputes concerning retirement and disability benefits as well), but the NFLPA also faces the challenge of replacing longtime executive director Gene Upshaw with a new commissioner who appears to rule with an iron fist, and the possibility of labor strife as the current collective bargaining agreement is due to expire after the 2010 season.

The choice of a new executive director for the union promises to be an important one. Gene Upshaw was highly respected during his tenure, but his leadership was also the source of substantial criticism. While some supporters suggest that the current labor peace and the substantial success of the NFL as a whole were reasons to maintain the status quo, detractors contend that Upshaw’s relationship with the league owners was much too congenial. Bryant Gumbel once suggested that Upshaw was “docile” and that Paul Tagliabue made him his “personal pet.” These critics point to the fact that most NFL salaries are not guaranteed and that the hard salary cap severely limits players’ earning potential. Comparisons to baseball and the strength of its players’ union are inevitable.

The new executive director, expected to be elected at the NFLPA’s annual meeting in March, will be immediately confronted not only with the issue of the tensions arising out of the recent lawsuit, but also of the expiring CBA. The current deal, which could have carried through the 2012 season, was opted out of by the owners this year. Assuming a new deal is not struck beforehand, the 2010 season will be played without a salary cap. This decision on the part of the owners should signal to the NFLPA that the owners are not necessarily content with the status quo and will be looking to tighten the purse strings once again.

The new NFLPA executive director will have an immediate impact on how the union will be perceived by the owners entering negotiations for a new CBA and on the perceived strength of the bargaining unit. Players and their agents alike should be lobbying for strong advocacy. A cozy relationship with the front office should not be the number one priority, but instead more guaranteed money in player contracts and some unification between the union’s representation of current and former players should dominate the initial agenda. The NFLPA faces a potentially difficult and tumultuous road ahead and strong leadership will be essential to the future of the players, their representatives and the NFL’s retirees.

Guest contribution by Michael C. Frilling, Esq.; General Counsel; www.fksportsmanagement.com