Last week, when rumors were quickly spreading about various coaches who might seek out the vacant Kansas football head-coaching position, some writers started to take critical looks at their hometown coaches.  They were upset just thinking that their head coach might leave town to try to fill the large void left by Mark Mangino.  No need to chuckle for too long about that “large void” line…let’s move on.

Over the weekend, the Turner Gill, formerly the head coach of the Buffalo Bulls, accepted Kansas’ offer to become the football team’s next head coach.  The Stanford community no longer has to worry about Jim Harbaugh possibly moving East and the State of Mississippi can relax knowing that Houston Nutt is not going to be leaving any time soon.  When it looked like Nutt was considering the Kansas opening, some reporters got all out nasty when discussing the coach.  One, in particular, waged all-out war-of-words on his agent, Jimmy Sexton.

This is what Brian Cook wrote in The Sporting Blog:

Look no further than the googly-eyed one’s agent, Jimmy Sexton. Sexton looks exactly like you’d expect a slightly reptile sports agent to look and acts like he’s been scripted by Jerry Bruckheimer. Sexton represents about half of the coaches south of the Mason-Dixon line and is almost certainly the “source close to Houston Nutt” cited above.

Sexton is almost singlehandedly responsible for creating the maelstrom of coaching insanity in the South. Any opportunity to pretend his clients are thinking about jumping ship is taken, whether it’s to wheedle out a contract extension or just buy a guy who turned a top five preseason ranking into obscurity a little more goodwill at his current home. Here’s an archetypal example:

In November 2006, he brought Butch Davis back to the college ranks at North Carolina. A year later, despite a 4-8 start, Davis received a contract extension and a raise from UNC, a response to rumors that he might leave Chapel Hill and take the vacant job at Arkansas, his alma mater. Even though Davis vehemently denied the chatter, he still received an extra year and $291,000 more per season.Sexton is the coaching equivalent of sleazy, soul-patched pickup artists displaying “PUMA SKILLS“; there’s nothing to see here except posturing and possibly a Nutt contract extension.

The picture referenced in the first link (which is at the top of this post) is a little disturbing, but does Sexton really deserve the “sleazy, soul-patched pickup artist” comparison?

I am a sports agent, but I am also a fan of my home teams.  That’s why, to this day, I have a problem with Nick Saban.  He bailed out on my Dolphins after he said there was no way that he was leaving.  I should have known not to trust him, since he did the same thing to LSU before leaving the Tigers for the Fins.  Anyway, Jimmy Sexton, a very popular and successful agent, is Saban’s agent.  He also represents many other high profile NFL coaches, NFL players, and a few baseball players.  His company is Athletic Resource Management, and his website is http://www.sextonsports.com/.

Sexton recently granted an interview to Kevin Scarbinsky of The Birmingham News.  Sexton says phrases like “they’re gonna take you out boots first in a pine box,” which is something that would never ever come out of my mouth.  I guess I have no hope recruiting clients in states like Alabama.  Lane Kiffin does not call Sexton, “sir”, and I am not surprised.  An interesting note is that Sexton represents two of Bobby Bowden’s assistant coaches.  Think he wants the University to push the old coach to retirement?  Sexton also has the pleasure of repping the head coach of the Dolphins and the Jets.  No bad blood between those two teams.

The first three rounds of the MLB Draft have come and gone and starting at 12 p.m. EST, the draft will pick right back up with Round 4 selections.  But let’s take a break from baseball this morning to discuss a little bit of football.  The 2009 NFL Draft already occurred, and teams are currently right in the middle of their OTAs (Organized Team Activities).  Just as the MLB Amateur Draft is not the only draft for baseball (ex: the Rule 5 draft), the “NFL Draft” is not the only draft in football.  Every year, there is the potential for a NFL Supplemental Draft, which gives underclassmen ineligible for the upcoming NCAA season who did not have their names on the early entry list for the original NFL Draft, the chance to be drafted by an NFL team.

Teams rarely choose players in the NFL Supplemental Draft.  Only thirty-eight players have been taken since 1977; none were grabbed last year.  However, you can count on one team taking a chance on a former Kentucky Wildcat this year.  DE Jeremy Jarmon has entered his name into the pool and will be performing in a pro day for scouts on July 9th.  One week later, on July 16, he hopes to receive a notice that he will be playing professional ball next year.

ESPN reports that Jimmy Sexton of Athletic Resource Management (ARM) will serve as Jarmon’s agent.  Jarmon is already meeting with teams who may be interested in giving up one of their 2010 NFL Draft picks to take the DE in the Supplemental Draft.

Jeremy Jarmon tested positive for a banned substance earlier this year, which destroyed his chances of playing for Kentucky in his senior season.  Instead of sitting out a year or playing for an NAIA school, Jarmon has placed his name in the Supplemental Draft.  The early team to express a lot of interest is the Philadelphia Eagles.

Agents seem to be doing their jobs, keeping player salaries increasing at similar rates in most sports, but many markets are still taking serious hits. The financial burden placed on some people in many industries has shined the spotlight on “cheaters” in athletics and everywhere else. Steroids and performance enhancing drugs are a huge issue of concern in almost every sport now. The most recent financial meltdown has leaked even further into the sports industry, as athletes are a large portion of the clients who have invested their earnings into larger financial institutions.

And after that grand introduction, I would like to bring to attention the connection and pandemonium that has been kept moderately under wraps between Athletic Resource Management (ARM) and Morgan Keegan Investments.

The facts sounds similar to the troubles Scott Boras and his clients had with Stanford Financial. Boras and his investment relationship with Stanford Financials was a big story that made national news after the Madoff scandal was brought to light. The connection here between Morgan Keegan and one of the greatest sports agents, Jimmie Sexton and his agency ARM, is just as relevant. However, the story has not made national headlines like Boras’s incident and seems to have been given the silent treatment, as Sexton and ARM have done a great job of keeping their names disconnected with Morgan Keegan’s financial plunders. The ability of ARM to shield the public from Sexton’s bad investment decisions is one of the underlying reasons people do not believe that athletes and agents are really taking a hit in this economy. From hiding links connecting agents and financial institutions, to loaning multimillion dollars of client’s money, agents like Boras and Sexton just do a great job of handling the tough situations in the current economy.

Athletic Resource Management was founded in 1985 by Kyle Rote Jr. A Professional soccer player who was once named “Greatest All Around Athlete” of all time by ESPN the magazine. The firm was based in Memphis but had offices, agents and much of its operations and contacts located in Dallas, Texas. ARM represents professional basketball, football, baseball players, and has a broad range of coaches as clients as well. The firm represented athletes such as Scottie Pippen, Clarence Weatherspoon, and Reggie White and currently has a list including Frank Beamer, George Sherril, Matt Cain, Lane Kiffin, Rex Ryan, Jason Witten, Nick Saban, Phillip Rives, and recent draftee Michael Oher. ARM had established a great reputation and was recognized by the Chicago Sun Times as one of the top 12 sports agencies in the country.

On June 1 of 1995 Morgan Keegan Financials Inc. officially announced an agreement purchasing Athletic Resource Management, Inc. Under the agreement, Morgan Keegan purchased the stock shares of ARM, while ARM continued to operate under the Athletic Resource Management name acting as a fully owned subsidiary of Morgan Keegan, Inc. From that day forward, ARM chief executive officer, Kyle Rote Jr., and President James Sexton II joined Morgan Keegan along with five other Memphis-based employees and four employees from their Dallas office, all moving to Memphis, Tennessee.

Although the two were technically separate, the close connection between the two companies is where the trouble started. Clearly, ARM was financially intertwined with Morgan Keegan. ARM and its agents would obviously recommend Morgan Keegan Financials expertise to all of their clients. Many agents and financial advisors advocate keeping the two job positions completely separate. Future agents are told to recommend several different financial agencies/advisors to clients in order to avoid potential liability if the recommended financial advisors don’t work out. In this instance it does not sound like ARM remained unbiased or offered its clients many options for investing.

The close relationship between Morgan Keegan and ARM started with the friendship of Sexton and John Wilfong. Wilfong was the financial advisor who handled most of ARM’s client’s and was best friends with Sexton for years. Apparently, they are not even on speaking terms anymore. He was also the one who originally knew of the athletes’ funds crashing. Mr. Wilfong was out the door at Morgan Keegan the very date the Kiplinger article below hit the stands. He now works for UBS and is no longer on the NFLPA registered financial advisors list.

“For years, bond funds run by Morgan Keegan’s Jim Kelsoe soared. Then, like Icarus, Kelsoe strayed too close to the sun and came crashing back to earth with melting wings… The Morgan Keegan disaster is a reminder that investors need to undertake a bit more investigation than usual when they contemplate buying into a bond fund that has delivered abnormally high returns.. That requires some understanding of the assets the fund holds. In general, you shouldn’t invest in what you don’t understand.”

To say it simply, Morgan Keegan lied and told their clients the funds were long term safe retirement funds, when in reality, they were placed in very high risk security funds. Morgan Keegan’s name was taken off ARM’s site immediately. Jimmy Sexton and ARM separated its alliance from Morgan Keegan in the middle of the night, right under a lot of people’s noses. Many people didn’t even realize Morgan Keegan own ARM in the first place.

The situation and transactions that occurred between Morgan Keegan and ARM affected many of ARM’s NFL clients and even caused a hit to future ARM clients. Among those affected by these actions are Donte Stallworth, Gibril Wilson, Jerome Woods and many more.

Woods was Sexton’s first 1st round draft pick and kept Sexton as his agent throughout his ten year NFL career. Mr. Woods and his wife Dana recently won $950,000 in a case against Morgan Keegan for losing nearly all of Wood’s money he placed with Morgan Keegan for retirement funds after his 2007 NFL retirement. This is a big decision, as many more Morgan Keegan cases involving athlete funds are still left on the dockets. Previous litigation against Morgan Keegan has not resulted in much, if any, of investor funds being awarded.

With the stench of Morgan Keegan still lingering around in the ARM offices, the agency has noticeably seen some top athletes chose their competitors. Rashad Johnson of Alabama was one athlete who fired ARM only a few weeks prior to the draft after seeing that ARM had a lot of clients who were unhappy with ARM at this moment.

In conclusion, this story shows how the two businesses should not be connected so closely. The moment Morgan Keegan purchased Athletic Resource Management, the relationship and cooperation between Morgan Keegan and ARM became too much. This clearly led to pretty much all of ARM clients being affected by Morgan Keegan’s bad investing decisions.

This is sadly another circumstance where an agent is involved in an area where he does not belong.

Kyle Rote Jr. is the founder of Athletic Resource Management (ARM, Inc.).  Rote Jr. currently serves as CEO of the company that you may not recognize at first glance.  Do you recognize the name Jimmy Sexton?  He is the President of ARM, Inc., which is one of the industry leaders in representation of football players and coaches.  Their client list includes Philip Rivers, Jason Whitten, and DeAngelo Williams on the player end.  As far as coaches go, Sexton and Rote Jr. are at the top of the profession.  They represent Nick Saban, Bill Parcells, Phillip Fulmer, Steve Spurrier, Houston Nutt…the list goes on and on.

Rote Jr. will be inducted into the Texas Sports Hall of Fame class in February.  All of us at SportsAgentBlog.com congratulate him and wish ARM, Inc. continued success in the world of sports business.

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