All three agents found opportunities with NBA teams on the west coast of the United States, but there is no reason to look too much into that.  The three gentlemen also had law degrees, which is rather interesting to note considering that in the 2008-09 NBA season, only one General Manager had a law degree – Donnie Walsh of the New York Knicks.  However, in addition to the hiring of Myers, Babby, and Levien, Rich Cho (General Manager of the Portland Trailblazers) and David Kahn (President of Basketball Operations for the Minnesota Timberwolves) have been hired by their respective teams in the past couple of years, and each has a J.D.

Many basketball agents and attorneys would consider the title of NBA General Manager to be a dream job, and it seems to be coming more of a possibility in today’s day and age.  Whether you have such an interest or not, I encourage you to read through a recently published article titled, “National Basketball Association General Managers: An Analysis of the Responsibilities, Qualifications and Characteristics” written by Glenn Wong of the University of Massachusetts at Amherst and Chris Deubert of Ginsberg & Burgos, PLLC.  It has everything from the demographics and career paths of NBA General Managers to the Duties of an NBA General Manager.

The entire published article is embedded below, but first, here are a few notes I took while reading it:

• In 2008, the average NBA salary was $5.34 million, the highest in pro sports.
• NBA General Managers are generally involved in almost all operations of the team, including finances, marketing, stadium issues, media, public relations, coach selection, scouting, contract negotiations, and player personnel decisions.
• The NBA was the first U.S. pro league to implement a salary cap.  The cap was $3.6 million per team in the 1984-85 season.
• The salary cap in the 2010-11 NBA season was $58.044 million.
• Under the current collective bargaining agreement, which is about to expire, players are guaranteed at least 57% of Basketball Related Income in total salary and benefits.  Teams must spend at least 75% of the cap.
• Salary cap exceptions include the Bi-annual Exception, Mid-Level Salary Exception, Minimum Salary Exception, Traded Player Exception, Veteran Free Agent Exception (aka the Larry Bird Exception) – all discussed at length in the article.
• The average playing career of an NBA GM is more than double the average NBA playing career.
• Only 4 GMs in the 2008-09 NBA season had not played college basketball.
• In the 2008-09 NBA season, 50% of the then GMs had NBA coaching experience.
• Only 4 GMs in the 2008-09 season had advanced degrees.
• The average age of an NBA GM in 2008-09 was 50.1.  Only two GMs were under 40.

Twenty-First Century NBA General Managers from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Bloomberg L.P.

Every agent has his method of preparing for contract negotiations, but many come down to stats, and the agent showing a club why his client deserves a certain contract.  A few months back we looked at RayRubin Sports Analysts, just one firm that agents go to for their statistical analysis.  Some agents and baseball professionals use Sabermetrics, a method discussed on SAB in its early days.  Whatever program or consultant an agent may choose, one thing is for sure, agents always need to do their due diligence in preparing for negotiations, and a lot of this rests on being prepared to showcase their clients’ stats in the most helpful way possibly.  Maybe Bloomberg Sports will be the next big thing in performance analysis for teams and agents.  For agents that are perhaps more hands on, this may streamline other processes which they’ve used in the past to prepare.  Bloomberg has done things so well in the financial industry, maybe those who specialize in preparing these types of analyses should be scared.  If I was an agent, I would certainly want to be on the exact same page as those 17 clubs that are working with Bloomberg now, knowing that at some point in the hopefully near future I would be sitting down with them to negotiate a new contract for my client.

For the GM in all of us, Bloomberg has also created a “Consumer” version of their services to aid the Fantasy player, available for Football and Baseball.  I don’t know how much these programs cost for the average-joe, but there are plenty of hardcore fantasy sports players out there pissed about losing their league by a point this season.

Bloomberg Helps Teams, Agents, Fantasy Players from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

This is such an interesting negotiation, because it’s not entirely clear as to who holds the leverage. As much as Derek Jeter needs the Yankees, the Yankees need Derek Jeter. They are a couple that is never meant to be split. How would Yankees fans react to someone other than #2 at shortstop? Would they become restless and angered if the Yankees extended Jeter a 6 year deal and his offensive numbers and defensive range continued to diminish? What is more fascinating is that the Yankees are historically known for overpaying in free agency to get what they want, yet when they now deal with their most important player in the last 2 decades, something has obviously changed. My answer: The death of George Steinbrenner. There is no doubt in my mind that if the boss were still alive, Jeter would be getting a deal that favors his demands (5 year $100 million deal). With the Steinbrenner boys now running things, it is apparent that there is a new aura about the Yankees, especially when it comes to contract negotiations with their players. I think this negotiation is meant to set a precedent for the future in the new Yankee management system. They live in the present, not in the past, and as Hank Steinbrenner recently stated, “I don’t feel we owe anyone anything monetarily.” When the day does finally come when the core four (Jeter, Rivera, Pettite and Posada) all hang up the cleats and call it quits, the final piece of George’s Yankees will officially be gone, and the days of 10 year A-Rod/Jeter mega deals will be long gone.

Yankee fans do not worry; Derek Jeter will be in pinstripes next season. It’s a question of which side will budge first, and quite honestly, I wouldn’t test Hank and Hal Steinbrenner right now. They seem to be on a mission to make a point very clear to the players, media and fans: Drink the reality potion Derek Jeter, you’ll get what you deserve and not what you demand.

The Ultimate Chess Match from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Yesterday, I had the opportunity to speak at length with Teague Michael Egan, who was rather receptive to speaking to me on the record.  After letting the media talk for the past week or so, Egan was ready to tell his story.  Egan was home for the Thanksgiving holiday, and was not taking a break from trying to build his company, 1st Round.  In fact, he was headed to Pine Crest High School, one of the two high schools in South Florida that he attended prior to enrolling at USC.  Pine Crest has an exceptionally talented basketball program; University of Kentucky freshman Brandon Knight is a graduate of Pine Crest.  Later that day, Egan planned on visiting St. Thomas Aquinas, the second South Florida high school he attended.  He was on the school’s golf and track team; St. Thomas is known nationwide as having one of, if not the, toughest football programs.

Egan was born on July 6, 1988, making him 22-years-young at the date of this article being published.  I believe that Egan felt comfortable speaking with me, as I had also started my own sports agency at the age of 22, as an undergraduate at the University of Florida.  The following contains the parts of our discussion that have not yet been mentioned.

Darren Heitner: Why did you transfer from Pine Crest to St. Thomas Aquinas in high school?

Teague Egan: I transfered from Pine Crest to St. Thomas Aquinas in my Junior Year.  My brother [Riley Egan] wanted to transfer because St. Thomas had a much better track team, which ended up winning the state championship after the transfer.  I was and still am very close with my brother, and I wanted to go where he went.  My brother runs the Pictures Division of 1st Round.

Heitner: What gave you the idea to start 1st Round?

Egan: I was in between businesses.  I had started a couple businesses in high school and college.  These were big business ideas.  I felt like like I was over my head, though.  I had just pledged a fraternity called Phi Psi.  Sterling Brewster was in my pledge class; he became a partner in 1st Round.  A couple of football players also pledged the same fraternity.  Daniel Harper, Everson Griffen (drafted by the Minnesota Vikings in the 4th round, but Egan referenced him as a projected 1st round pick), Spencer Spiegel, and Jordan Campbell all pledged with me.  I became great friends with Everson, Daniel, and Jordan.

In the Spring of Sophomore year, I went to Jordan and said that should start a business.  I came up with the name “1st Round” because a lot of my boys were going to be drafted in the 1st Round, and I thought it was cool.  I grew up with signed helmets, footballs, and jerseys all over my room.  I played 5 sports in high school.  I had season tickets to the Heat and Dolphins.  I loved sports.

I started throwing parties with Jordan.  We went head-to-head with 28th Street Entertainment (Egan stated that this was USC’s top nightlife promotion group).  We threw an entire party for free, but negotiated a huge percentage of the bar.  We provided free transportation to club, free admission, and blew 28th Street out of the water.  The party was packed with hundreds of kids from USC, UCLA, and LMU.  We lost money on the party, but 1st Round Entertainment was officially established.  I was busy throwing parties, having great times with friends, and had an “in” with all the cutest girls.  All of Jordan’s friends on the USC football team started coming to my parties as well.

That summer, I was up on Nantucket Island on the beach hanging out on the 4th of July.  One of the guys I brought out to the beach was the best freestyle rapper I knew.  It suddenly hit me that that I wanted to start a record label.  At the time, I was questioning the success of 1st Round Entertainment, because I was throwing fun parties, but losing money.  But I  had a good name.  I started the record label and signed Sam Adams (the freestyler who accompanied him to the beach).

I first named my record label “Lazy Boy Records.”  I decided to change it, though, and make all of my companies reflect the 1st Round Brand.  I made the decision to do so after reading a book about branding that was written by Richard Branson.  I liked the whole “Virgin” idea and keeping everything under the same brand.  In the near future, I will be doing a management deal with Lady Gaga’s management, for Sam Adams.

Anyway, when Jordan transferred to Louisville, we started the sports agency.  The division is far bigger than negotiating 3% for the athletes we represent.  We want the sports division to be the next Nike.  We don’t want to just deal with contract negotiation.  Instead, we want to manufacture merchandise and apparel.  I structured 1st Round after Nike.  Nike has the swoosh, 1st Round has the wings; easily identifiable.  The slogan is also based after Nike.  Theirs – “Just Do It” vs. ours – “Go Higher” – everyone can identify and relate to it.

Heitner: But it does seem like you also want to represent athletes, no?

Egan: I officially became certified by the NFLPA on October 1, 2010.  My Nike goal is down the road.  I want 1st Round to be a “full service sports franchise.”  The word “agent” has such a negative connotation.  We will provide anything the athlete can want.  I want to do a lot of athlete branding.

Heitner: What is the make-up of your company?

Egan: I structured my company with 6 different divisions.  Each division has a different President.  I also incorporated the “crossover effect,” where each division can help out the others.   Sports, records, pictures, entertainment (parties, but I eventually plan to own restaurants, clubs, entertainment venues), capital, and philanthropic.

Heitner: Tell me a little more about your capital division.

Egan: This division began based on my and my dad’s background.  I have has several investments in many fields, stocks and bonds (he says that Apple is his biggest holding), money in BlackRock, global allocation funds.  The main area that I am looking at is venture capital and investments into small, upcoming businesses that have huge potential for growth.

Heitner: What are your thoughts on what has been written about you thus far?

Egan: What I have done is almost revolutionary. I have gone into unchartered waters. I am one of, if not the youngest certified agent, and I am an undergraduate student at a university.  Everything that has happened is absolutely ridiculous.  It is such a unique situation.  The rules are in place to prevent people like Cam Newton from getting $180,000 or Reggie Bush from having houses bought for his parents, not to prevent students from getting rides in golf carts from other students.  They try to stress “student” coming before “athlete” in almost everything.  If you want to claim that, then I am a “student” first and then an “agent”.  Call me a “student-agent.”

Heitner: People are calling out the NFLPA for granting you certification while you are a still a student.  What do you have to say about that?

Egan: Athletes should be able to have whoever they want represent them, as long as the person has experience and capability to represent properly. The fact that I am a student should not prevent me from representing an athlete. If a student has sufficient negotiating experience that meets the qualifications the NFLPA deems acceptable, there is no reason he should be denied.  I am a born negotiator.  I have a lot of negotiating experience.

Heitner: What about the criticism regarding Jordan Campbell, a current student-athlete, being a part of your organization?

Egan: Jordan never actually signed the LLC documents.  I believed that it was a bad idea and a potential conflict.  I am going to wait until after his eligibility to make him an official partner.

Heitner: What is your plan for 1st Round Sports in the immediate future? Are you going to wait until the criticism subsides before you go out and recruit players?

Egan: Now that this all happened, I have to watch myself and stay within the rules even tighter, but I am not going to sit back.  The #1 thing was to make sure that my friends did not get hurt.  Now that they are back and reinstated, I feel free to talk with the media.  I will be putting the golf cart up on Ebay and will have some of the proceeds go back to USC Football.  I am looking at baseball and basketball on top of football, and already represent an MMA fighter (Ryan McMahon) and have connections to the UFC.

Heitner: What about the threat of getting in trouble for rules violations?

Egan: Rides to clubs, free entry to clubs, and golf rides around campus were given to everybody.  There was no special treatment being given to athletes.

Heitner: What kind of advice would you like to give people who dream of becoming sports agents?

Egan: It’s all about relationships.  How is anyone supposed to be a sports agent if he is not friends with the athletes and is some random 30 or 40 year old guy?  It is all about trust.  I have amazing relationships with the guys.  They know and trust me.  It’s not the grades you make, it’s the hands you shake.

Interview With The Agent: Teague Egan from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

I am a month late on reporting Zach Britton’s switch from Hendricks Sports to Boras Corp. What is most interesting is what the Baltimore Orioles 2010 Minor League Pitcher of the Year said about his former representation:

“I was with Hendricks Sports and dealt with Matt Laird.  He was great but I never really had contact with the Hendricks brothers myself, so I just never felt comfortable going forward with people I hadn’t met. So I had a good opportunity to meet with Scott and came away very impressed.”

That makes me think of Dicky Fox’s line from Jerry Maguire – “The key to this business is personal relationships.”  Agents are held to an extremely high standard by their clients.  One mishap, and there will be hundreds of agents waiting for an opportunity to pounce on the client and have him make the dreaded switch.  Sometimes it has nothing to do with a poorly handed contract negotiation or a lack of marketing deals.  It can be as simple as feeling neglected or even just feeling not as important as one of the agent’s other clients.

I make it a point to interact with each one of my clients, even if I am not the “primary agent.”  Certainly, not every agency operates the same way, and that seems to be the chief reason why Zach Britton left Hendricks Sports.  Do you think rival agents will use Britton’s statement against Hendricks Sports in the future when they are in a recruiting battle against the company?  You better believe it.

On To The Next One: Zach Britton from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Ashley Merritt is Scott Merritt’s wife.  Scott Merritt is a professional basketball player who currently plays for Link Tochigi Brex in the Japan Basketball League (JBL).  Ashley claims that she and Lee had an oral agreement to act jointly to negotiate Scott’s professional contract for the 2010-2011 season (I assume it is 2011, as the attorney who drafted the Complaint wrote “2100″), and split the agent commissions 50/50.

Lee received a commission of $13,700 from the JBL team.  Ashley Merritt now wants half of that, or $6,850 to be exact.  The four states causes of action are: breach of contract, promissory estoppel, unjust enrichment, and intentional misrepresentation.

I don’t think Ashley Merritt has even the slimmest chance of winning this.  My favorite is the third cause of action for unjust enrichment.  Good luck to Ms. Merritt in proving that she conferred a benefit on Bernie Lee by “assisting with contract negotiations.”  I would love to know what that benefit entailed.  And better yet, Scott Merritt has no free will.  Ashley Merritt “brought her husband, as a client” to Bernie Lee.  Quite the runner/handler we have here.  Are we sure that she is not somehow connected to the Cameron Newton drama?

Bernie Lee’s Client’s Wife Wants Half Of His Commission from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

But what happens when the lower payroll teams start beating out the big spenders?  Will the big spenders stop throwing their money at the players who have their hands out constantly asking for more?  And will the non-spenders continue to balk at the idea of spending, since they have enjoyed success without dishing out close to the amount of money that the “big market” teams have spent?

Only 3 (Giants, Phillies, and Yankees) of the top 10 teams when it comes to payroll have made this year’s playoffs.  4 teams from the bottom half of payrolls made the playoffs (Rangers, Rays, Reds, and Braves).  Does this mean that parity is possible in a league that is not bound by any type of salary cap?  Darren Rovell says it is not only possible, but that the MLB has the most parity of any sport, with 19 different World Series champions in the past 30 years.

Does Payroll Of Playoff Contender Affect Future Contract Negotiations? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Football is a contact sport where injuries are naturally a part of the game, but the biggest reason why this is relevant is because of the financial consequences the injured athlete could face.  This offseason we saw some holdouts and extended contract negotiations from Vincent Jackson, Nick Mangold, and Sam Bradford, as well as the well chronicled Darrelle Revis episode.  One of the major aspects of the negotiations that halted continued progress was the amount of guaranteed money in the contract.  Guaranteed money in contracts is usually the most disagreed upon aspect of the contract, and is what often stretches out negotiations.  In the NFL, everyone is always one major hit away from their career being over and their bank accounts being emptied.

Each of the past few years, we have seen record breaking contracts in the amount of money guaranteed for top draft picks.  In 2009, Lions #1 pick Matthew Stafford signed a 6 yr $72 million deal ($41.7 guaranteed), and this past season Rams #1 pick Sam Bradford signed a 6 yr $78 million deal ($50 guaranteed).  While it surely is a big risk on the owners’ part, it is an investment they hope will  satisfy the needs of their franchise player.

As spectators and fans of the NFL, we are often so quick to judge players for holding out and demanding more money.  What we fail to realize is that unlike the jobs most of us have, the job that these athletes take part in is so physically demanding that it could put their lives in jeopardy.  While I am not advocating that agents try to milk every last dollar out of team owners, because quite often greed and selfishness do factor into these negotiations, we have to be more understanding of just how fragile an NFL player’s career is.  When a player suffers a severe injury, it affects the entire dynamic of the player’s life (wellbeing, income, career, family).

As more and more season or career ending injuries take place this year, it will be interesting to see how this affects the new collective bargaining agreement negotiations.  Owners want money back from the players, and the players want to be financially secured.  Aside from the guaranteed money/injuries issue, the proposed 18 game schedule will only strengthen the NFLPA’s stance that the amount of money being dished out on salaries is not too high.

A builder has a hammer, a tailor has a sewing machine and a writer has a pen and paper.  For football players, their tool is their body, and they need to do everything they can do protect it.

Enjoy week 2 and the rest of the NFL season…. While we still have it.

A Recap Of NFL Week 1, And A Look To The Future from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Meanwhile, LeBron was invited to watch Game 2 of the Lakers-Celtics NBA Finals in Geffen’s seats, but declined the invitation.  Instead, LeBron’s close friend and partner, Maverick Carter, did attend the game with Geffen.  Although he opted not to attend the game, James spent the weekend in Los Angeles with Carter.  ESPN reported that a source confirmed that Geffen’s interest in purchasing the team is one of the reasons James and Carter were out west.  Teams are not allowed to contact players under contract until free agency begins July 1, and the league has already fined Mark Cuban $100,000, and two other teams for making comments about LeBron.  But Geffen is not an owner of any percentage of the Clippers or any other team, and can discuss LeBron’s potential future as a Los Angeles Clipper as much as he’d like without fear of discipline by Commissioner David Stern.  SportsAgentBlog.com has previously reported on the future of James’ career and the people surrounding his decision-making.  Obviously Leon Rose, Lebron’s agent at CAA, will play a large part in brokering LeBron’s return to Cleveland or move to another city.  Likewise, Darren has mentioned the speculation of the behind-the-scenes role that Worldwide Wes (William Wesley) plays in LeBron’s career.  However, LeBron’s L.A. travel companion, Carter, will likely play one of the most important, if not the largest role in James’ decision on where to play next year.

Rose is LeBron’s registered NBA agent, but only represents James in his player contract negotiations.  LeBron is a self-made businessman in all other respects, and Maverick Carter is James’ partner and CEO of LRMR, the marketing agency started by the two to manage the marketing deals of LeBron and other athletes.  According to Sports Illustrated’s “The Fortunate 50”, two-thirds of his $42 million in earnings in 2009 came from endorsements.  It would be fair to say that Carter’s role as James’ de facto marketing agent puts him in a position of power, as James’ decision will undoubtedly be affected by his endorsers, especially Nike.  I agree with ESPN’s Skip Bayless, who recently commented on an ESPN program that Maverick Carter was the most influential member of LeBron’s team.  Like the possibilities in of James playing in the city that never sleeps, I’m sure that potential for James to play in Tinsel Town has been talked about in the board rooms of his endorsers.

The allure of playing in Los Angeles might be intriguing to LeBron James.  He would be playing in arguably the best sports city in the country, and won’t have to play in the house that Jordan built, or for the Knicks or Nets, neither of whom have even had the chance to lose a playoff game, much less win one in years.  While Kobe Bryant seems to be getting better every year, he is certainly inching closer to the end of his already 14-year career.  LeBron could really bring the Clippers out from under the shadow of the Lakers, and truly reign as the King of Los Angeles.  He would also be surrounded by the likes of Blake Griffin and Eric Gordon, which reads like a Championship-winning caliber team.  If anyone has the wallet to buy the Clippers its Geffen, whose net worth is estimated at $4.6 billion by Forbes, but current Clippers owner Donald Sterling has insisted as he has many times before that he is not interested in selling the team.  In the end, a LeBron-Geffen Clippers may be just another California dream.  Until free agency starts on July 1, it will remain as one of the many rumors surrounding LeBron James and those that influence his decisions.

King James in Hollywood…Not Likely from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

That same uncle seems to have authority of advisor in Andre Johnson‘s most recent contract negotiations.  The problem is that uncle Johnson is not certified by the NFLPA and thus does not have authority to directly negotiate with any NFL organization.  If the rules are adhered to, that means that Andre Johnson must do all the talking himself.  That’s a tough thing to do when you have five years remaining on your current contract and you are (at least should be) spending most of your time every day building strength, practicing, and watching film, along with doing good for your community through philanthropic events/causes.  Not to mention, I think Johnson also wants to use some of his free time to enjoy the money he is working so hard to earn.

If you are a four time Pro Bowler who has led the NFL in receiving yards for the past two seasons, do you really want to skip on the 3% (maximum) agent fee?  Johnson is about to enter year four of an eight-year deal that was an extension of his rookie contract.  I don’t care how good Johnson is, he could use the help of an experienced negotiator in trying to work out a new deal under his current constraints.

This post is not about whether or not Johnson deserves more money than what he is due to earn on his current contract.  It is about aligning yourself with the proper advisors when entering such important discussions.  You would think that Johnson learned the first time around.

Do not confuse Johnson’s situation with that of Mark Sanchez, who hired his brother, a business litigator with a firm who was certified by the NFLPA and also involved Athletes First in negotiations.  I was even a little skeptical of that decision at first, but it in no way compares to Johnson’s decision to have his non-licensed uncle serve as his advisor.

Andre Johnson Relying On Uncle For Advice from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules