Basketball

• Agreed, now how do we get rid of under-the-table payments to these players? [NCAA Should Admit Its March Madness Players Are Professionals]
• Arn Tellem represents Tiago Splitter now, too? Who doesn’t Tellem rep these days? [Spurs' situation with Splitter reminds of Scola]
• From a Merrill Lynch financial advisor.  See, it’s not only agents and boosters giving these kids money [Oklahoma BB Star Scores Questionable Cash].
• Low 5-figures to get Murray State coach, Billy Kennedy, out of his K [The Smallest Coaching Buyout?].

Soccer

• I hope that the players are unified and committed to taking action [MLS Players Vote to Strike, League Has Some Decisions to Make].
• On the bright side… [Soccer In The States Reaches It’s Tipping Point…].

Baseball

• Guaranteed money and security at the age of 26 [Twins lock up Span for five years].
• No baseball players on the list of Top 10 Funniest Athletes [Why Michael Strahan Is Pitching Baseball Bats].

Football

• NCAA ban aside, football coaches may want to think twice before selecting Dez Bryant [Bryant comes with a caveat emptor tag].
• Mike Ornstein vs. Bill Henkel [Wilson: Marketing reps confirm altercation at combine].
• Yes, the NFL has to follow state laws when they are applicable [The Star Caps Saga Continues].
• Please read what Head Coach Marvin Lewis had to say about the NFL Combine [Inconsistent Measureables].
• Some will over spend, some will go the cheap route, others will pretend there is still a cap [NFL free agency begins Friday without cap].

Baseball

• Never seen Garrett Broshuis pitch, but I am sad to see him leave the game [Suitcase Chronicles: Not Crash Davis].
• Some love for Arn Tellem as a baseball agent [Hideki Matsui in Anaheim: "Man, I feel comfortable here"].

Soccer

• So now that Major League Soccer and its players’ association is not bound by a collective bargaining agreement… [McCarthy’s Musings: The Friday Five Explains The Demise Of The MLS CBA].

This article is posted in the hope that it provides athletes with a way to more accurately assess the skills of an offer from various types of agents.

For example, anyone doing any research on me will quickly see that I have a strong background in the law, so one would expect my skills to be strong apropos contracts, negotiation, drafting, professionalism and presentation.  But does that make me a good agent?  Is the agent who is a former player without as much formal education and experience necessarily a weaker negotiator than me? Is he less well-versed in the nuances of contract law?  Can he pick out a future star as well as me simply because he has played professionally for many years?  Am I any less able to find the diamond in the rough simply because I spent my formative working years in Court rather than on the rainy, muddy and wind-swept soccer pitches of England?

I will readily concede that one of my weaknesses on which I have worked very hard is identifying young players who may have what it takes to play professionally at some point in the future.  Unearthing young talent is a key component of any agent’s practice.  But there is a vast difference between noticing a player who is playing well in that game and in spotting someone who has the raw materials and can go on to forge a career.  When coupled with the myriad factors involved in making it professionally then, this can suddenly seem a daunting task.

My solutions have been two-fold.  Firstly, there is no substitute for actually getting out there and watching as many games as possible.  DVDs only take one so far.  Being present during the game is vital.  The more games one watches, with one’s agent hat on rather than punter, the more I have been able to build up an accurate picture of youth soccer and, over time, been able to make more accurate and informed judgments on players.

Secondly, being humble enough to ask the opinion of others – namely, coaches.  My company currently represents a number of coaches, some of whom are experts in youth development.  I have done a good job for them in the past and they are delighted to receive DVDs of players on whom I would like their feedback.  It can really mean the difference between investing time and resources into a player who may never make it and, on the other side of that chain of reasoning, between having a reliable and experienced 2^nd opinion to back up my own thoughts on the player.

So, what can a former player who is now acting as an agent offer?  You can expect him to have a lot more contacts earlier on his career than someone like me who had to build everything up from the bottom over a period of time.  He may or may not have the same presentation skills and may place less emphasis on the quality of the written work.  He will most likely have greater access to better young players earlier on due to the fact he has just finished his playing career and is making the transition from playing to representation, so if you’re an unknown young player then he may already have a complete portfolio of young players and be less willing to take a chance on you.  Whilst there is the prestige of being represented by a former big name, does this mean that you will get the personal touch you as a player want and deserve?  Equally, there is no guarantee that someone without a playing background will give you the requisite attention.

I’ve had players come to me from other agents with stories about what took place which led to them leaving.  I have no doubt that the player is telling the truth and, equally, that the other agent was doing his job properly and professionally but it didn’t work out based on a number of factors…but mainly chemistry.  What works for one player and one agent may not be appropriate for the agent and the second player.  Likewise, I’ve had 1 or 2 of my clients ask if they could leave the agency or speak to other agents.  There is never bad blood, because as much as this is a personal relationship based on trust, it’s also a business deal and there’s no sense in preventing a client from looking elsewhere.

For me, the absolute bottom line is chemistry with my clients.  If we’re not getting along well, then I will have no hesitation in terminating the contract and allowing both parties to walk away.  I love this game too much, and am deeply fortunate to be able to earn a living doing something I love, to allow it to be hindered by a client with an attitude problem.  If it’s not working out, as sometimes happens, then there’s nothing wrong with walking away.  Neither party should be unhappy when the excitement of building a successful career together can be incredibly fulfilling.

In summary, I would say that there are really no sure things and perhaps this article has achieved the opposite of what I set out to accomplish – to pose more questions than provide answers!  But I hope it’s helped somebody, somewhere, if they are weighing up which type of agent to appoint.

Max Eppel is a soccer Players’ Agent Licensed by The FA. His company is Max Eppel Soccer Agency LLC and has offices in Newport Beach, CA and London, UK.  For further information click on www.maxeppelsocceragency.com.

What: 7th Annual Relay Worldwide Sports Sponsorship Symposium by SportsBusiness Journal and SportsBusiness Daily

When: Wednesday, Sept. 30 – Thursday, Oct. 1, 2009

Where: New York City, NY at the Marriott Marquis

Keynote: Uli Becker, CEO and President, Reebok International

Panels:

Sept. 30

• 7:30 a.m. – Registration
• 8:30 a.m. – Welcome and Opening Remarks
  • Richard Weiss, Publisher, Street & Smith’s SportsBusiness Journal/Daily
  • Tim Mauer, CEO, Relay Worldwide
• 8:45 a.m. – The Recalibration of Sports Sponsorships and Event Marketing
  • Rich Lehrfeld, VP of Global Sponsorship Marketing, American Express
  • Tim McGhee, Exec Director of Corporate Sponsorships, AT&T
  • Dan McHugh, VP of Media, Sponsorship, and Activation, Anheuser-Busch
  • Scott O’Neil, President of MSG Sports
  • Matt Pensinger, Senior VP of Marketing Services and Consulting, Relay Worldwide
  • Mark Waller, Senior VP of Marketing and Sales, NFL
• 9:45 a.m. – The Rebranding of Gatorade: Inside the G Launch and Defending Against Competition in the Sports Drink Market
  • Sarah Robb O’Hagan, CMO of Gatorade
• 11:00 a.m. – The New Realities of Marketing: The Chief Marketers’ Perspective
  • Phil Clement, Global CMO and Communications Officer, Aon
  • Rory Finlay, Senior VP and Global CMO, Beam Global Spirits & Wine
  • Mark Ingall, Managing Director of Global Strategic Media and Marketing, Citigroup
  • Stewart Mitchell, Senior VP and Chief Strategy Officer, Sharp Electronics
  • Tony Pace, CMO of Subway
• 12:00 p.m. – Lunch
• 2:00 p.m. – Anatomy of the Procter & Gamble/NFL Sponsorship
  • Jason Dial, architect of the deal.
• 2:45 p.m. – Marketing to Hispanics: Leveraging Their Passion for Soccer and Other Sports
  • Marco Lopez, Senior Director of Relay Worldwide’s Hispanic Marketing practice
• 4:00 p.m. – The Ever-Changing Athlete Endorsement and Talent Procurement Business
  • Steve Battista, Senior VP of Branding, Under Armour
  • Frank Mahar, General Counsel, Genesco Sports Enterprises
  • Mike Principe, Managing Director, BEST
  • Ryan Steelberg, CEO, Brand Affinity Technologies
• 5:00 p.m. – Reception

Oct 1.

• 8:00 a.m. – Continental Breakfast
• 8:30 a.m. – Keynote Speech
• 9:15 a.m. – How the Sports Media Business and Media Buying are Changing Before Our Very Eyes
  • Ray Warren, EVP and Chief Revenue Officer, Comcast SportsNet
  • Jeff Flemings, Senior VP and Global Head of Social, VivaKi
  • Eric Fernandez, Senior Partner, MediaLink
  • Ed Erhardt, President, ESPN Customer Marketing and Sales
• 10:45 a.m. – Lifelock Makes its Mark in Sports
  • Todd Davis, CEO, Lifelock
• 11:30 a.m. – Up Next: A Futurecast on the Challenges in Sports and the Changes in Consumer Behavior
  • Rich Luker, CEO, The Luker Co.
  • Jerome Conlon, President, Brand Frameworks
  • Ben Kline, Chief Strategy Officer, Leo Burnett
  • Scott Hess, VP of Insights, Tru
  • Pat O’Connor, President, Minor League Baseball
• 12:30 p.m. – Conference Conclusion

Cost: $1,495 for SportsBusiness Journal paid subscribers. $1,650 for non-SportsBusiness Journal paid subscribers. Must register by September 23. Click here to register.

Notts County FC, the oldest league club in the world and currently competing in League 2, has been taken over “Manchester City style” by a middle eastern consortium. This allowed millions of pounds to be injected into the club to strengthen the squad and bring them up the the premiership, and eventually, compete with the Big 4.

So just what has Notts County done so far to make this step? First, they appointed Sven Goran-Eriksson, the former England manager as their director of football. Having such a renowned and respected figure in this position is surely going to attract some high quality players to the team. Next up, they have brought in Kasper Shmeichel, son of former Manchester United legendary keeper Peter, who is a pretty handy keeper himself. Ironically, he was on the books of Manchester City not too long ago. Although not getting a game at Manchester City, Kasper is a cut above the other keepers in his division.

Add to the fact that they have recently signed former Tottenham/Arsenal/England defender Sol Campbell, who at 34 has decided that despite offers from bigger clubs, to sign a 5 year deal with the club worth about 40,000 pounds a week. Sol has stated that he expects to play premiership football again before he retires, indicating Mr Eriksson has reassured him of the club’s ambitions. With most players on around 500 pounds a week base salary, Sol will have a lot to live up to in League 2.

Notts County currently sits on top of the table without conceding a goal, so their plan seems to be working.

If you think that the recent happenings of Manchester City were a one-off, think again. This proposal of injecting millions in football clubs to succeed appears to be growing. Horse Racing may no longer be the only Sport of Kings.

The Premiership offers matches in 211 countries and 575 million different homes that account for the overseas revenue.  One country the league has experienced tremendous growth in is the United Arab Emirates. A broadcasting network in UAE, Abu Dhabi Sports Channel, won the rights to broadcast the games for $319 million dollars, three times the contract paid by Showtime Arabia last year. The Premiere League’s current overseas television contracts were signed in 2007 and expire at the end of 2009. The net worth of the overseas contracts surpasses $1.03 billion dollars, which equates to nearly a third of the leagues television revenue.  Where will the league experience the most growth? China of course! The country currently contains a small market of 20,000 viewers because matches can only be viewed by audiences through pay per view. In 2010, China will offer matches to air for free allowing 30 million potential viewers rather than 20,000. The Premiere league has 97 broadcasting affiliates that it will be negotiating with for the next 4 months.

Ronaldo – £80 million

Kaka – £56 million

Benzema – £30 million

Albiol – £12 million

Manchester City Summer Purchases

Santa-Cruz – £18 million

Tevez- £25 million

Adebayor – £25 million

Barry – £12 million

These are the transfers that have knocked the wind out of the summer transfer window in European soccer. In an economic climate where the world is saving and not spending, Real Madrid and Manchester City have continued to fulfill their reputations as big spenders, and have accordingly purchased the best available talent on the market. No other clubs could compete – the likes of Chelsea and Manchester United (normally high fliers in the market themselves) have had eerily quiet summers with limited transfer activity and it must be partly due to the acquisitions made by City and Madrid.

Manchester City have sourced their funds from Billionaire owners Abu Dhabi United Group. Real Madrid are a different kettle of fish. Madrid should have been made insolvent countless times over the years due to the fact that they tend to spend money that they do not actually have. However, with the King of Spain as a huge supporter (‘Real’ means ‘Royal’), they have had their debts written off by banks who do not dare bankrupt the King’s club.

In either case, these are teams who seemingly have unlimited spending power, without consequence. This is becoming a major concern to the football fan in Europe. How can their team compete or make big signings when the big-guns of Madrid and City continue to dominate a market that was anticipating a deflation of transfer fees, as opposed to the inflation that has actually materialised?

Has the time finally come for the governing bodies to impose transfer expenditure caps? The concept of salary caps has been a much discussed topic in the media and online blogs, and the general conclusion is that they are illegal and very difficult to incorporate – EU law protects individuals against mechanisms that impose restrictions preventing a worker from realising his earning potential. Would a restriction on a club’s ability to spend be capable of circumventing the grasp of EU law however?

Perhaps the governing bodies could come up with a reasonable limit (£20 million?) that a club may spend in a given summer. Maybe it could be £20 million plus whatever revenue that comes from the sale of any pre-existing players of the squad. The restriction could be as simple as one that forbids any club spending money that is not disposable income – my previous post on Southampton FC highlights quite clearly how disastrous the consequences can be for clubs that do not spend within their means. Any measure brought forward that is in the interest of sport might be capable of successful implementation.

In any case, the expenditure of City and Madrid has distorted the market and does not reflect the current state of economic affairs. Is it an overreaction to suggest that something need be done in response to this? Some might be of the view that there is nothing that can realistically be done to stop or regulate the way clubs spend money on transfers. The solution could be simple – clubs should rename themselves ‘Real’….

Drawing on the recent post by Darren in regards to the levels of US state taxes and the effect on player income [ "A Taxing Discussion"], I thought I would look at the tax rates and how they factor into soccer contracts on a worldwide scale.

The talk started with the recent Arsenal singing of Andrei Arshavin and him being upset about having the bulk of his wages taken by the current 40% upper level tax rate in England, after coming from paying only 13% in Russia. He even fired his agent as he was unimpressed with what he was able to deliver [ Arsenal Star Andrey Arshavin Sacks Agent Dennis Lachter]. News gets worse for those making over £150,000 a year as they will soon be paying 50% on their income.

Look at this in comparison to Spain. In an attempt to lure top CEOs to the nation, Spain passed a bill allowing the first five years of your higher tax rate to be cut to an attractive 24%, significantly lower than that charged by their English counterparts. Now look at where Kaka and Ronaldo have recently transferred to. That’s right, Spain. Ronaldo would have lost about £15 million over the life of his contract if he stayed in England. [ Premier League can't compete with low taxes in Spain]

English club Manchester United was linked with player Karim Benzema, who ended up signing with Real Madrid.  Could taxes have played a factor in that deal also?

Another great example is that of player Jermaine Pennant, who recently signed with Spanish team Real Zaragoza. Whilst still earning a fair amount, Jermaine is on the equivalent of £80,000 a week before tax, as his after tax wage is £40,000. His club is happy to foot the tax bill of £9,200 a week as it’s minimal [ Jermaine Pennant's switch to Real Zaragoza earns him '£80,000 a week']. Now picture him still playing in England. Assuming the close to £50,000 wage he is on, he would receive only £25,000 after tax, losing £15,000 a week on what he currently earns.

As previously mentioned, Russia has a low tax rate of 13%, so if you were a decent player who might be able to play at Championship level in England, would you consider a move to Russia for a better pay deal?

Spain is really the only threat to English football, as other major markets (France, Germany, Netherlands, Portugal) are all hovering around the 40-50% upper level tax bracket. [Source]

However it’s the minor leagues that could entice the lesser known players to countries such as the aforementioned Russia, Switzerland (13.2%) and Turkey (35%). Alread,y high profile players such as Harry Kewell and Milan Baros have made the switch to the Turkish League.  Alternatively, players could play in the U.A.E. which doesn’t have any tax at all!

So how can English football stop the exodus and prevent Spain from taking all the quality players?

The most obvious way is to simply equal the net pay as to which is offered elsewhere. Players and Agents alike have caught on about the tax rates and are now using it to their advantage. Players are already asking for their contracts to include the amount they receive after taxes are taken into account.

As it is now easier (and common) for a player to transfer across the world, the inevitability will be that clubs will have to fork out more money.

Why play in the MLS when you can play for Real Madrid?  Beckham joined the Los Angeles Galaxy in 2007, signing one of the biggest contracts in history. Beckham’s contract was worth $250 million dollars for 5 years, salary plus commercial endorsements. At the age of 31, he was earning $1million dollars a week playing in an inferior league where he was guaranteed playing time, plenty of media attention, and served as an icon for American soccer.

David Beckham’s priorities and commitments have been challenged by the media since his shaky return this summer. Despite being a member of the LA Galaxy, Real Madrid, and the England national team, he has remained poised. However, he has made it clear that his main objective at this point of his career is it to stay a part of the 2010 England World Cup squad.

Southampton FC was recently penalized 10 points because they had become insolvent. This is a standard penalty that the Football League imposes on clubs who cannot sustain liquidity. The impact is usually crippling – it is incredibly difficult to avoid relegation to the division below as a result of this penalty.

Normally, I would have little or no objection to this, as it is a duty of any team to ensure financial stability and the protection of long-term well being. The amount of money that is spent in football is ludicrous. This is worsened by the fact that clubs are spending money that they do not actually have. If you spend recklessly (through either transfer fees of players or salaries) and become bankrupt for it, then you get what you deserve in my opinion.

However, something about the Southampton scenario does not smell right. The club is operated by a management company. This is the subsidiary of a parent company. From what I gather, it is the parent company that has gone insolvent, NOT the subsidiary. In English law, every company is considered a separate legal entity. The general rule is that subsidiary companies are not agents of their parent companies. These rules all stem from a case that emerged some two centuries ago – Salomon v Salomon.

With this in mind, I cannot see how the Football League has come to the conclusion it has. In order to impose this penalty, it has basically circumvented the law by claiming that the management company (subsidiary company) and the parent company “are inextricably linked as one economic entity”. However there are very limited circumstances in which the ‘corporate veil’ of incorporation can be pierced and traditionally the courts view these circumstances restrictively and with much caution.

The comments from Southampton FC seem to suggest that an official appeal will be launched and I suspect it will be on the basis that the penalty is illegal for the reasons discussed above:

“We are of the opinion that an incorrect conclusion has been reached. The football regulations do not apply to the circumstances surrounding Southampton Football Club. This is a view shared by the lawyers and advisers to both the club and the administrators.”

However, it is too little too late as relegation to ‘League One’ was confirmed last weekend, meaning the club will be commencing the 2009-2010 season with a 10 point deduction.

More and more clubs are being caught by the overspending that occurs in football. Southampton join Leeds United (Champions League Semi-Finalists in 2001), Luton Town and AFC Bournemouth in the growing list of teams to go bankrupt. The only solution to this ongoing problem is that teams must stop spending beyond their means. The evidence shows that if they continue to spend money they do not have then it will come back to bite them, hard.