Upon publishing Marc’s post, I received an email from John Hanselman at NCompass Financial, who also has some free literature to share with rookies who unfortunately do not get to experience the rookie symposium because of the lingering lockout.  His booklet is titled, The Rookie Financial Handbook, and I have embedded it at the bottom of this post for all to peruse.

Also a short read, Hanselman’s handbook discusses communications with a Certified Public Accountant after a player signs his first professional contract, considering personal disability insurance, benefits of renting instead of buying property, carving out a 5-10% after tax “fun money” allowance, proper budgeting, developing a financial roadmap, and estate planning.

The Rookie Financial Handbook from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

NFLPA Executive Director, DeMaurice Smith, recently sent a memo out to NFLPA Certified Contract Advisors commenting on the terms of the NFL’s counter-proposal.

Agents obviously are not thrilled with the first bullet point in Smith’s memo. No individual negotiations of contracts at all, would again make it very difficult for agents to justify taking any commissions on rookie deals.  Who is going to front the Combine/Pro Day training expenses then?

Smith emphasized that the wage scale would be 5 years for 1st rounders and 4 years for all other drafted players.  These are longer deals than what the NFLPA has proposed, and threatens to prevent many NFL players from ever hitting the free agent market.  Furthermore, minimum salaries would be reduced.  Smith frames this as implementing a veteran scale as opposed to a true rookie scale.

The memo does a good job at distinguishing the NFL’s proposal from the current NBA wage scale.  The NBA scale only applies to first round selections, is fully guaranteed for skill and injury, is still subject to some negotiation (80%-120% of the slot value), and only lasts three years.

Overall, I believe that the memo is extremely effective.  It is not too long or wordy and certainly gets the NFLPA’s point across to anyone who takes the minimal amount of time to read through it.  Job well done by Smith, but nobody truly “wins” until there is some true progress made by each side in coming closer to an agreement.

NFLPA Not Happy With NFL’s Rookie Wage Scale Proposal from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

When I originally wrote about the Grizzlies caving into pressure, I mentioned that the San Antonio Spurs might suffer the most based on the Grizzlies folding its hand.  The Spurs are known to make its players perform on their rookie contracts if they want to earn the max on their contracts.  And they have had quite a bit of success under that model.

This year, James Anderson was selected by the Spurs at #20 overall.  He also accepted a rookie deal that includes performance bonuses.  The thing that may end up saving the Spurs is that Anderson will likely meet the performance goals that were set.  As long as the Spurs did not and continue to not set those goals at a level that is unconscionable, and their rookies have a track record of meeting the goals, I do not see why the Spurs will be held back from continuing the practice of making their rookies earn top dollars.

Will any teams attempt what the Grizzlies aimed to do this past offseason and demand that their first-round selection(s) sign a rookie contract that includes performance bonuses for the extra 20% over slot?  If so, I have to imagine they will use the Spurs as Exhibit A.

Rookies “Earning” The Extra 20% Over Slot from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Fourth & Goal is a national non-profit organization made up of former NFL players, that operates to do the following:

• Gain representation for retired players;
• Advocate for improved pension and disability benefits for retired players; and
• Raise funds to provide immediate assistance for retired players in need.

The organization has also been advocating for a Rookie Wage Scale.  Such a scale would undoubtedly affect Contract Advisor compensation.

Written in May 2010, Jeff Nixon’s article, NFL Player Agents can’t touch player “benefit” money, is still a relevant read.

The article starts off with a statement made by CAA’s Ben Dogra who said to Yahoo!’s Jason Cole, “You still have a certain amount of money that’s going to be spent on players regardless of where it goes, right? We’re still talking about the same percentage of money that goes to the agents. It just comes from a different place.”  The claim was in reference to the implementation of a rookie wage scale.  As Nixon points out, Dogra may not realize that he and his company actually stand to make less money under such a system.

Nixon alleges that the re-allocated money could be classified as a “benefit”.  Under the NFLPA Regulations Governing Contract Advisors, “compensation” does not include any collectively bargained benefits.  And if there is a stipulated amount of money given to veterans as a benefit based on less money paid to rookies, then Dogra and other Contract Advisors may not be able to touch it.

Nixon goes on to state that Contract Advisors may be violating the NFLPA Regulations by taking a percentage of a player’s performance-based pay from the Player Performance Pool (PPP), as it is also classified as “benefit money”.

Agents should understand all of the potential arguments and effects of a Rookie Wage Scale before publicly advocating or negating its adoption.  Fourth & Goal is one organization that is aiming to provide more information about the scale’s possible effects.

A Rookie Wage Scale Could Lower Agent Commissions from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

No more ragging on the Memphis Grizzlies…for now.  Last week the Grizz finally came to terms with first-round selections Xavier Henry and Greivis Vasquez.  No training camp missed.  No harm, no foul, right?  That’s true to an extent.  The players shouldn’t suffer.  They ended up with the historically agreed upon rookie contract of 120% of the league’s rookie salary scale, after the Grizz did not want to give up more than 100% of the rookie salary scale and make the rookies “earn” the additional 20% through performance bonuses.  Their agents won’t suffer either.  Henry’s agent, Arn Tellem, said the following:

“I assured the Grizzlies that I wouldn’t yield to pressure. I also informed them that to take any pressure off Xavier, I would pay his salary myself if a deal couldn’t be reached.”

That is quite a bold statement for an agent to make, and speaks to the type of person Arn Tellem is.  At the same time, he is blessed to be surrounded by people and a company (Wasserman Media Group) with deep pockets, so when he makes that kind of claim, he can back it up.  Not many of his competitors could or would do the same.  Henry noticed that and showed his appreciation.

“My agency was behind me, and they were fighting for me.  My agent took a step forward and said if they weren’t willing to cooperate then we were prepared to go as far as we needed on principle. … But I’m ready. I’ve been ready for a while. I’m anxious to play.”

Tellem won’t have to spend any of that money, though.  So who might suffer the most out of all of this?  How about a team that had zero involvement in the entire matter?  The San Antonio Spurs have bucked the trend of throwing 120% to rookies for a long time.  The Spurs load up their rookie contracts with performance bonuses, which if reached, don’t always pay the players the 120% slot ceiling.  Will the battle won by Arn Tellem change things for the Spurs?  They have been extremely quiet over the years regarding their rookie contracts.  Will they now be under the radar.  Will an agent step up and challenge them next year on a rookie deal?

The Grizzlies Cave In To Pressure. Will It Affect Other Teams? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Sports Agents

• Congrats to Eugene Parker, who was inducted as part of the inaugural class of the Concordia Athletic Hall of Fame [Concordia honors best of the best].

Football

• Making a case that a rookie wage scale might limit impermissible agent payments to student-athletes [Possible effects of new CBA].
• “The greatest trap is trying to live up to the expectation of the NFL.” [Money management a difficult lesson for NFL's rookie class]
• Great Pro Tect Management brochure inside cover find. You come to expect this from Yahoo! Sports [Coach-agent ties probed].
• Some good lines from Saban at the end of this article [Coaches, NFL discuss agent access].

Sports Law

• An effective scare tactic? [N.C. State's Yow warns agents]
• A couple of interesting questions regarding compliance departments [College football grasping to keep agents, lure of cash from tainting eligibility of its athletes].

Baseball

• Think Moorad was saying the same things to baseball execs when he was on the other side of the table? [Who’s Your Padre?]

Shabbat Shalom: Friday Wrap-Up (8/13/2010) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

30 percent of the sales of Tebow’s jersey have come from the state of Florida, where Tebow grew up and starred at the University of Florida.

That’s no surprise, considering the large fan base he had already built up while at the University of Florida. With the addition of Tebow, the Denver Broncos are also the #1 selling team right now on NFLShop.com

With the celebrity status and star struck fans, Tim Tebow really wants to prove himself as more than just a name on a jersey. Even after his controversial Pro Life, Pro Family commercial had aired during the Super Bowl, he still received endorsement deals with EA Sports and Nike. Although he is endorsing EA Sports and Nike, Tebow has declined other endorsement offers, including some worth more than $1Million. Why would he turn down this much money? The answer is simple; he wants to focus solely on playing football.

You can see from his hyped up change in his throwing motion, the declining of other endorsement deals, and his proven work ethic, that he is driven to become a successful quarterback in the NFL. However, I am sure that there are going to be plenty of accepted endorsement deals in the near future. Over the next few months, we will see the steps Tim Tebow will take leading up the first pre-season game on August 15, against the Bengals in Cincinnati.

Did You Get Your Tim Tebow Jersey Yet? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Sports Agents

• Bill Duffy gets on the Honorable Mention list [The top 25 Bay Area sports power players].

Baseball

• Interestingly structured contracts [Diamondbacks To Pay Bernard Gilkey Until 2017].
• Upper Deck can’t use team logos…going to be tricky to get around that [Topps Gets Exclusive Deal With Baseball, Landing a Blow to Upper Deck].
• 22nd rounder gets $990,000 signing bonus [Coffey Gets Unprecedented Deal].

Football

• Darren Rovell is not a fan of how Vick has treated the media post-jail time [Michael Vick’s Next Mistake: His Media Plan].
• Jerome Stanley is pissed [Agent points to Mangini for WR's injury].
• What problem would IMG have with the contract? [CAA and IMG squabble keeping Eli Manning from signing Giants contract].

Basketball

• Last year, 18 of the 60 NBA draftees spent time in the NBA D-League [Rookie Transition].

Shabbat Shalom: Friday Wrap-Up (8/14/09) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Rookie holdouts are nothing new to the sports world. Every year we see a few or more rookies being advised by their agent/advisor to hold out of camp until a fair contract is signed. Before I jump to support any side, I’d like to present some important points-of-view.

From the athlete side: Professional sports are not just a game, but a business, too. Just like a worker wants his fair pay before starting a new job, so too does the athlete.

From the team/fans side: Although it is a business as well as a game, holding out of camp will pose a threat to the success of the athlete’s career; it will be like starting school late and missing tons of work and valuable information.

USA Today posted a great article about all of the remaining rookie holdouts and how their absence hurts them and the team. Here are those players:

• Aaron Curry, LB, Seattle Seahawks (4th overall pick)

• Andre Smith, T, Cincinnati Bengals (6th overall pick)

• Eugene Monroe, T, Jacksonville Jaguars (8th overall pick)

• B.J. Raji, DL, Green Bay Packers (9th overall pick)

• Michael Crabtree, WR, San Francisco 49ers (10th overall pick)

• Aaron Maybin, DE, Buffalo Bills (11th overall pick)

• Malcolm Jenkins, DB, New Orleans Saints (14th overall pick)

As we have all seen in the past, some “holdout” rookies have had tougher times getting starting jobs, playing to their best ability, and overall adapting to the fast-paced National Football League.

• JaMarcus Russell, one of the most hyped quarterbacks in recent years, was drafted 1st overall and has only played 19 games in his three year professional career. (Russell held out)
• Brady Quinn was drafted in the first round of his draft and has only played in 4 games in his three years in the NFL. (Quinn held out)
• Matt Ryan was drafted 3rd overall in the ’08 NFL Draft and DID NOT hold out. He started 16 games in 2008 and has become one of the most successful quarterbacks in the NFL.
• Joe Flacco was drafted 18th overall in ’08 and DID NOT hold out. Flacco also started 16 games in 2008 and has given the Baltimore Ravens great success on the field.

Now, I ask the players: Is taking a risk of not starting at all or being sub-par worth the money? Yes, you will be getting paid a lot of money to sit on the bench, but it will hit you in 5-6 years when your rookie contract is up and it is time to sign a new one. You will not be seeing those same dollars.

Is It Worth the Money? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Lottery picks are not stupid, and neither are their parents, AAU coaches, handlers, and whoever else might be involved in the agent selection process.  In most circumstances, agents for lottery picks do not make a dime off of the initial contract.  The first time they will make commission on a team deal will be in the second contract, which will be very lucrative for those rookies who outperform the competition.  If the contractual agent is not also acting as the marketing agent for the player, that means that the agent will be working pro bono for quite some time.  To make matters worse, other agents will be hawking at your lottery pick client nonstop.  If the client leaves you, you may lose quite a lot of money and time over this kid who was supposed to be “The One” to bring your agency to the top.

Recruiting money is never paid back, but often times, lottery picks will basically pay back the costs of workouts and travel expenses that the agent incurred in the pre-draft process.  You can call that a commission on the first contract, if you’d like.  Rovell is correct, most agents who represent lottery picks actually lose money…their hope is that long-term, these athletes end up paying for themselves and much more.

Still Want To Be An NBA Agent? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules