SBJ/July 2-8, 2012/Labor and Agents

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  • Federer, agent starting firm

    Roger Federer and his longtime agent, Tony Godsick, are in the process of forming their own sports agency, financial and tennis sources said, a move that would make the Swiss star one of the few athletes still near the top of his game to go into that line of business.

    Godsick represented Federer for more than six years at IMG before Godsick and Federer in May parted ways with the company after their contracts ended. Godsick did not reply for comment last week.

    Federer, 30,  has said he wants to continue playing, and it’s unclear what role he’d take at the firm.
    Photo by: GETTY IMAGES
    Tennis sources said Godsick’s credential at Wimbledon, which is entering its second week and which Federer has won six times, lists him as being with RF Management.

    It’s unclear precisely what role Federer will play in the new firm, though it is not unprecedented for an active, star athlete to take a management and equity role in an agency. Oscar De La Hoya formed Golden Boy Promotions to stage and promote fights, including his own. Mark McCormack’s first client at IMG, Arnold Palmer, owned 10 percent of the firm until McCormack’s estate sold the company to Forstmann Little in 2004.

    “Tony has had an outstanding record at IMG as a strong and positive agent for Roger, so it would certainly be natural for him to start his own thing with Roger,” said Donald Dell, group president of Lagardère Unlimited. Dell started his own firm in 1972 with tennis greats Stan Smith and Arthur Ashe, though they were only clients, not equity holders. The firm ultimately became ProServ.

    Godsick, who resides in Cleveland, is best known for his work with Federer, but his past clients have included players Tommy Haas and Lindsay Davenport, as well.

    Godsick
    Federer earns $40 million to $50 million annually, most of that in off-court endorsement deals. The fees for those contracts still flow to IMG, so revenue for the new group would come initially from any new deals and exhibitions for Federer.

    Sources said Godsick has sought investment money and is believed to have brought on board partners. That activity would suggest that Godsick’s vision must be greater than just representing a few tennis players, said Colin Smeeton of PR Partners, which represents Shaquille O’Neal and other athletes. Otherwise, Smeeton said, Federer could just bankroll the operation.

    “If Tony is bringing in outside investors, he is trying to build a sizable practice,” said Smeeton, who worked in tennis as an agent before joining PR Partners’ predecessor company in 2006. “Federer could be a case study of an athlete who had a really great career who wants to get into management.”

    Sports leagues prevent active players from owning parts of representation agencies, so examples are found only in individual sports, and rarely so if there. Several years ago, Wayne Ferreira, a former midtier ATP player, tried to start his own firm but did not succeed.

    If Federer succeeds, it could be, as Smeeton said, a template for how stars can stay active in the game once their careers are over. While Federer, 30, has said he wants to play a few more years, he is likely closer to the end of his career than the beginning.

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  • Legacy Agency signs leading PGA Tour rookie John Huh

    Liz Mullen
    The Legacy Agency is in talks with several Korean companies, including Hyundai, Kia, Samsung and Shinhan Bank, about its new client, Korean-American golfer John Huh.

    Huh, 22, was No. 15 on the PGA Tour money list last week, leading all rookies.

    “He is going to be Rookie of the Year,” predicted Andrew Witlieb, a principal of The Legacy Agency and head of its golf division.

    Huh’s success on the tour was “a bit of a surprise,” Witlieb said, adding that Huh’s only current endorsement is a one-year deal with Ping Golf.

    Huh is the only rookie to win on the tour this year and was 15th on the money list last week.
    Photo by: GETTY IMAGES
    The PGA Tour Rookie of the Year is determined at the end of the year by a vote of PGA Tour members. As of last week, Huh was the only rookie to have won a PGA Tour event, the Mayakoba Golf Classic, and had four top-10 finishes, including tying for second at the Valero Texas Open.

    “He is a wide-open slate,” Witlieb said of Huh’s endorsement portfolio. “He played in Korea before he played on the PGA Tour, so he really has crossover appeal.”

    Additionally, The Legacy Agency signed PGA Tour golfer and former U.S. Ryder Cup team member Jeff Overton. Witlieb represents both players.

    Overton, 29, who turned pro in 2005, was No. 64 on the PGA Tour money list last week. He has deals with Titleist for his golf ball, Cleveland Golf for his equipment (in a deal that includes the Cleveland Golf logo on his hat) and Under Armour for his apparel, Witlieb said.

    Huh was formerly represented by Lagardère Unlimited. Overton was formerly represented by agent Perry Rogers.

    LAGARDÈRE SIGNS MIERNICKI, NIKE DEAL: Lagardère Unlimited has signed All-American golfer Daniel Miernicki from the University of Oregon and secured a deal for him with Nike. Lagardère agent Ben Harrison represents Miernicki and negotiated his deal to wear Nike apparel and play Nike Golf equipment.

    HAMBRIC SIGNS KOEPKA: Veteran golf agent Rocky Hambric has signed Florida State University golfer and four-time All-American Brooks Koepka for representation. “He is one of the new breed of players who are very athletic, and he is a very good hitter,” said Hambric, founder of Dallas-based Hambric Sports Management. Hambric said he beat out four major golf representation firms for Koepka.

    NFL DRAFT PICKS STILL UNSIGNED: As of early last week, 14 first-round and 14 third-round NFL draft picks still had not signed with the clubs that selected them, including No. 1 overall pick Andrew Luck.
    Will Wilson, Luck’s agent at Wasserman Media Group, did not return a phone call.

    As previously reported here (SportsBusiness Journal, June 18-24 issue), most of the first-round picks who had not signed were arguing over “offset language” in the contracts. That provision speaks to the amount of money a player would be paid if he were to be cut by his original team and picked up by a second team.

    In the case of the third-round picks, the holdups are generally said to be regarding disagreements between the clubs and agents about getting the maximum value of the contract for those players.

    There were three second-round picks unsigned as of last week along with one pick each from the fourth, fifth, sixth and seventh rounds. The New Orleans Saints had not signed any of their drafted rookies as of early last week.
    NFL training camps open later this month.

    Liz Mullen can be reached at lmullen@sportsbusinessjournal.com. Follow her on Twitter at @SBJLizMullen.

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  • MLB teams sign 20 first-round picks to bonuses at or below the league-slotted level

    MLB clubs had signed 20 first-round draft picks at or below their league-designated slot figures and just one player above his slot number as of midweek last week, with teams working this year under new, stricter guidelines governing the first-year player draft.

    Deven Marrero is the only first-round pick so far whose deal exceeded his slot figure.
    Photo by: AP IMAGES
    As of Wednesday night, with 21 of the 31 first-round picks signed, only Arizona State shortstop Deven Marrero (No. 24, by Boston) had a deal that exceeded his draft position’s slot figure. Twenty-seven of the 29 supplemental first-round picks also had signed, with 22 of those deals coming at or below slot.

    Three of the top five overall picks had signed, each below slot. Most notably, Houston’s No. 1 overall pick, Puerto Rican shortstop Carlos Correa, signed a deal with a bonus of $4.8 million, one-third less than the draft position’s designated bonus of $7.2 million.

    Among the foremost changes in the new five-year collective-bargaining agreement signed last year by the league and MLB Players Association, the new draft system strips an overspending team of a future draft selection for exceeding its assigned aggregate bonus pool by as little as 5 percent. The system was pushed by MLB as a means to provide greater cost certainty in a realm of player spending that has seen historic increases in recent years. The union, in turn, struck a compromise deal with the league on the structure by retaining individual bargaining rights for draftees as opposed to the hard-slotting system desired by the league.

    With nearly two weeks to go before the July 13 signing deadline for drafted players, league executives were gratified with the structure’s initial progress.

    “We have been very pleased with the way the new system has operated so far, although it’s very early,” said Rob Manfred, MLB executive vice president for economics and league affairs. “From our perspective, the biggest thing is that players are signing earlier and getting out earlier and commencing their professional careers.”

    Manfred said this year’s draft did not have a bona fide top overall pick; Correa was one of several rumored candidates for Houston’s first selection. As a result, teams have elected to spread their draft bonus pools more evenly.

    “It may be the most efficient allocation of dollars given the distribution of talent that is out there this year,” he said.
    The Minnesota Twins, owners of the largest individual bonus pool of any MLB team at nearly $12.4 million, also has paid the largest singular signing bonus: $6 million to No. 2 overall pick, Georgia high school outfielder Byron Buxton. But even that deal was $200,000 under the position’s slot figure, and the team remained under its total cap.

    “It’s hard to understand fully how this will all play out from just one draft, but we’re supportive of what’s in the collective-bargaining agreement and think this has been a boon to get our players signed earlier, into minor league teams, and learning the Twins Way sooner,” said Twins President Dave St. Peter. “We think this will definitely accelerate player development.”

    Player agents speaking on the condition of anonymity, however, said the high number of players signing, and the terms to which they agreed, could be attributed to clubs and players agreeing to deals before the draft.

    “I would be surprised if a club was going to expend a first-round draft pick on a player they intended on spending below slot without having some kind of conversation with him about how they were going to accomplish a below-slot signing,” said one agent.

    MLBPA Executive Director Michael Weiner declined to comment.

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  • Veterans, new faces to steer talks

    As collective-bargaining negotiations between the NHL and the NHL Players’ Association begin, discussion of the key issues for the league and the union will be notable as always — but so too will be the matter of who is doing the talking. Veterans of hockey negotiations past will be joined by key new voices, but those new individuals are far from inexperienced when it comes to business and labor.

    Photo by: GETTY IMAGES
    The CBA expires Sept. 15. Talks between the two sides were expected to start late last week. Following is a look at some of the individuals expected to play important roles on both sides of the table in the weeks and months ahead.

    LEAGUE SIDE

    GARY BETTMAN, BILL DALY: As commissioner, Bettman is undoubtedly the face of NHL management and wields the most influence on ownership, but deputy commissioner Daly will manage the league’s attorneys and have a strong voice in all discussions with the union. Daly is experienced, having started with the NHL in 1996 and having coordinated all negotiations that led to the current CBA. He has a solid working relationship with the press, so when the league does choose to comment — at least early in the negotiations
    The NHL’s Gary Bettman (top) and the NHLPA’s Don Fehr will lead the sides in negotiations.
    Photo by: AP IMAGES
    — there is a good chance it will come from Daly.

    Jacobs
    JEREMY JACOBS: These will be the first CBA negotiations since Jacobs was named chairman of the NHL’s board of governors in 2007. However, the Boston Bruins owner has been a major player in NHL labor negotiations for more than three decades and is one of Bettman’s most trusted confidants.

    LOU LAMORIELLO: The president and general manager of the New Jersey Devils is arguably the most respected team executive in the NHL. He was deeply involved in the last negotiations and will be again.

    ED SNIDER: As the owner of the Philadelphia Flyers since 1966, Snider has always been a strong voice in the NHL boardroom. As chairman of Comcast-Spectacor, Snider’s fingerprints were all over the league’s decision to align with the former Versus as a TV partner, a deal that ultimately led to the 10-year, $2 billion deal signed with NBC last year. Snider’s influence has never waned.

    Vinik
    JEFF VINIK: Vinik saved the Tampa Bay Lightning in March 2010, when he purchased the team from a previous ownership that was marked by steep debt and internal squabbling. A year later, he was named to the board of governors’ executive committee. He could be a big voice for the small-market franchises in these CBA talks.

    ROCKY WIRTZ: In October 2007, Wirtz followed his father, Bill, as president of the Wirtz Corp. and chairman of the Chicago Blackhawks. He restructured the team’s front office, and in 2010, the Blackhawks won their first Stanley Cup in 49 years. Wirtz set the stage for these CBA negotiations by saying in April that the Blackhawks are not profitable despite selling out more than 200 consecutive games.

    PLAYERS SIDE

    DON FEHR: The players side in these labor negotiations will be led by a much larger and completely different cast of people than it was the last time around. Fehr, widely considered the strongest union leader in sports during his time at the helm of the MLB Players Association, was named NHLPA executive director in December 2010. He spent much of the last year and a half canvassing and getting to know the union’s membership. Said one NHL agent, “He’ll sit down with the players and say, ‘What do you want to do?’”

    Last week, Fehr unveiled the union’s formal negotiating committee, a 31-player group, but he added that any player who wants to attend the CBA talks could do so at the union’s expense. That’s a stark contrast from the labor talks of 2004-05, when the NHLPA gave the union’s seven-player executive committee power to negotiate a new CBA. It’s not, however, different from what Fehr has done historically.

    Michael Weiner, who succeeded Fehr as MLBPA executive director, remembers that during the 1990 MLB lockout, the union under Fehr’s leadership would take as many as 100 players to the commissioner’s office for a negotiating session. “[In baseball], any player who wants to be involved, can be involved,” Weiner said. “If 50 guys want to show up, they can show up. Does it mean that 50 guys will be in the room for every minute of bargaining? No.”

    Fehr understands both large-group and small-group dynamics. At times, Weiner said, a few players and union staff members would go into a session and then report to the larger group. “The point,” Weiner said, “is you want to generate a unionwide consensus, and in order to do that, you need a broad and wide range of opinions.”

    DON ZAVELO: The NHLPA hired Zavelo last October as its general counsel. A labor attorney who worked in the New York office of the National Labor Relations Board for 30 years, Zavelo served most recently as the group’s deputy regional attorney. Labor negotiations can involve one side or the other filing an unfair labor practices charge with the NLRB. Zavelo was in charge of directing investigations and trial work involving such charges during his years at the NLRB.

    STEVE FEHR: Don Fehr’s brother, Steve Fehr was hired with his sibling in December 2010 as special counsel to the NHLPA. The brothers have worked together since 1980, teaming previously at the MLBPA on collective bargaining and other legal matters. Steve Fehr represented the MLBPA during the collusion cases that the union brought and won against MLB in the 1980s and played a prominent role in negotiating the MLB CBAs in 2002 and 2006. He still serves as special counsel to the MLBPA and is of counsel to the Kansas City law firm Jolley Walsh Hurley Raisher & Aubry.

    Schneider
    MATHIEU SCHNEIDER: A former defenseman who played 20 seasons in the NHL and served on the union’s executive board eight times as a player representative, Schneider in February 2011 was named special assistant to the executive director at the NHLPA, a newly created position. Schneider has been working to educate players on collective-bargaining matters and is seen as likely having an active role in the CBA talks, which are expected to include player-discipline issues as well as health and safety matters, including concussions.

    Langenbrunner
    JAMIE LANGENBRUNNER: The St. Louis Blues veteran stands out as a key figure on the union’s 31-member players’ negotiating committee announced last week. Langenbrunner was one of five players elected two years ago to lead the search committee for the NHLPA’s new executive director. Of those five players who recommended hiring Fehr — the others were Ryan Getzlaf, Brian Rafalski, Brian Rolston and Schneider — Langenbrunner is the only one on the negotiating committee. Schneider and Rafalski have retired as players, and Rolston may join them this summer.

    Besides Langenbrunner, expect George Parros of the Anaheim Ducks to be actively involved in negotiations as a committee member. Parros, a frequent fighter for the Ducks, has a degree in economics from Princeton.

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