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SBJ/20081027/This Week's News
Octagon to acquire CSMG biz
Published October 27, 2008
Octagon has agreed to acquire the baseball, coaches, broadcast, legends and marketing divisions of sports management firm CSMG, in a deal that will bring more than 140 clients to Octagon, including pitchers Randy Johnson and Chien-ming Wang.
The deal will make Octagon one of the largest, if not the largest, baseball practices based on number of clients. CSMG said it represents 120 players, including about 50 MLB clients. Octagon said it represents 80 baseball players, including 20 MLB players. SportsBusiness Journal research in August found Scott Boras’ agency represented 63 clients on Opening Day 2008 MLB rosters, the most among agencies. CSMG represented 32, with a total payroll of more than $63 million. Octagon represented 13 with a payroll of nearly $44 million.
CSMG founder and veteran baseball agent Alan Nero and 20 CSMG staff members will join Octagon as part of the deal. Nero, CSMG baseball agent Scott Pucino and Octagon Baseball agent Steve Hilliard will oversee the merged baseball division.
Attorneys were completing the details of the transaction between Chicago-based CSMG and McLean, Va.-based Octagon last week. CSMG offices in Chicago, Taiwan and Venezuela will be part of the deal. Financial terms were not disclosed.
“This is a terrific opportunity for Octagon to expand our baseball practice both domestically and internationally,” said Phil de Picciotto, Octagon president of Athletes and Personalities. “We have a great respect for Alan Nero and his staff and what they have built over the last 30 years.”
The sale ends CSMG’s run as a major, multisport athlete representation firm; basketball will be the last remaining athlete representation practice known as CSMG after the sale.
Sources said the NBA practice of CSMG agent Henry Thomas, who counts NBA stars Dwyane Wade and Chris Bosh as clients, was also for sale, but Thomas said last week that he was not entertaining offers.
Nero, who founded CSMG in 1978, said last week that the company agreed to sell the practice after being approached by several companies about a sale four or five months ago.
“We had about five suitors in this process,” Nero said. He would not identify the suitors, saying all the parties involved signed nondisclosure agreements.
“Octagon was the most intriguing because of what they bring to the table,” he said. “The idea of being part of something much bigger after being a founder and an entrepreneur for 25 years is pretty exciting. By being part of a global organization, I am going to have resources I never had before.”
Other CSMG baseball clients who will become Octagon clients are Seattle Mariners pitcher Felix Hernandez and Cleveland Indians catcher Victor Martinez. (Future hall of famer Johnson will continue to be co-represented by Nero and independent MLB agent Barry Meister.)
In addition to its baseball practice, CSMG will bring its smaller coaches, broadcast and sports legends divisions to Octagon. Clients of those divisions include Wade Boggs, Gale Sayers, Bart Starr, “SportsCenter” broadcaster Neil Everett, Chicago Cubs manager Lou Piniella and Tampa Bay Rays manager Joe Maddon.
CSMG marketing agents Nova Lanktree and Adam Rosenthal also will join Octagon.
Earlier this decade, CSMG represented 250 professional athletes, including NFL, NBA and MLB players, but several agents have left in the last few years, including NFL agents Fletcher Smith and Kennard McGuire.
Also, CSMG underwent a shake-up in 2007, including firing its CEO, Mike Hall, and Nero’s stepping down as chairman.
Nero said some of the departures and turmoil were part of a difference of philosophy he and other CSMG agents had with Hopewell Ventures, a Chicago-based venture capital firm that bought a 43 percent stake in CSMG starting in 2005. Bill Sutter, senior managing director of Hopewell, did not return a phone call last week.
“There was not a lot of harmony between us from day one,” Nero said of Hopewell Ventures. “Phil, he is in the business; he knows the business; he wants to be in the business and he wants to be the very best.”
Both Nero and de Picciotto noted that the baseball practices share an international focus.
Octagon has represented some players from overseas in MLB, including Chicago Cubs right fielder Kosuke Fukudome and Los Angeles Dodgers pitcher Hiroki Kuroda. CSMG communicates in five languages with clients, employs baseball agents in Asia and South America, and represents players in Japan’s major league.
That international reach was attractive, de Picciotto said.
“There are more top athletes coming to play in the United States than ever before and there are more leagues and players operating internationally than ever before, so a global presence is a tremendous business benefit,” de Picciotto said.