SBJ/October 8-14, 2012/Labor and Agents

More junior agents leaving for rival firms

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Rich Paul leaving CAA Sports to start his own agency representing LeBron James is part of a growing trend that has seen junior agents leave the company that trained and mentored them for a rival firm.

In the last six months, at least 13 agents representing players across all major sports have left talent firms (see chart) and either joined a rival agency, launched their own firm or are weighing their options.

Truckin’, Got My Chips Cashed In

A list of recent moves by agents from their previous employer to their next

Agent Sport Former firm New Firm
March      
Aaron Mintz NBA Priority Sports CAA Sports
April      
Jon Wagner Golf IMG Milestone Sports Management
Jeff Stacy Golf IMG Empire Sports Management
Kevin Lynch Golf IMG To be determined
May      
Joe Panos NFL LMM Athletes First
July      
Jon Heaton Golf IMG To be determined
August      
Paul McDonough MLS Santio Sport & Entertainment Wasserman Media Group
Spencer Wadsworth MLS Santio Sport & Entertainment Wasserman Media Group
September      
Rich Paul NBA CAA Sports Klutch Sports Group
J.D. Smart MLB Hendricks Sports Management Excel Sports Management
Jim Murray MLB Hendricks Sports Management Excel Sports Management
Matt Laird MLB Hendricks Sports Management Excel Sports Management
David O’Hagan MLB CAA Sports Excel Sports Management

Source: SportsBusiness Journal research

While it is not altogether new or uncommon for younger agents to leave the agency that trained them for a better deal, veteran executives at major agencies interviewed last week said they can’t remember such a fluid marketplace in which so many junior agents are moving on.

The defections started in March when NBA player agent Aaron Mintz left Priority Sports & Entertainment for CAA Sports in a move that sparked dueling lawsuits that are scheduled to be tried before a jury in Los Angeles federal court next month (see related story). Agent moves continued through last month with Paul’s exit, while three MLB agents left Hendricks Sports Management and one MLB agent left CAA Sports for Excel Sports Management.

Although industry insiders say each agent move is different, many point to the changing face of the business.
New companies, including Lagardère Unlimited, Relativity Sports and Excel Sports Management have entered the representation business, and with the increased competition both new and old firms in the business are trying to consolidate — and retain — power by securing talent. The fastest way for the companies to do that, sports executives say, is by hiring younger agents away from rival firms. These agents may bring athlete clients with them, but they also have proven they can recruit new clients, which is the key to success in the agent business.

At the same time, notes Octagon President Phil de Picciotto, “Younger agents are looking for an opportunity in an industry that doesn’t have as many opportunities as in the past.”

His point is that unless an agent has a marquee player, like James, it is very difficult for a young upstart to start a new firm that can compete with multisport athlete representation firms run by veteran agents. For some young agents, leaving the firm in which they are in a lower-level role to a so-called “name” agent can mean more recognition, more autonomy and more money, among other things.

There are also specific situations at specific companies at play. Much of the movement in the golf space has been centered around an organizational shake-up at IMG. The agency’s most high-profile golf agent, Mark Steinberg, left in 2011 and four more departed this year.

Wagner
Jon Wagner, who was co-managing director of IMG Golf’s business in North and South America, left in April. Wagner was followed by Jeff Stacy and Kevin Lynch. Both had responsibilities for managing clients and recruiting new talent. They originally left in April to go to work at Wagner’s new agency, Milestone Sports Management, but that arrangement fell through in a court battle that lasted through the summer. In the end, the court said a noncompete clause in IMG’s employee agreement prohibited Stacy and Lynch from going to Milestone. Stacy, a nine-year IMG veteran, has since landed at Charleston, S.C.-based Empire Sports Management as vice president, business development.

Another IMG defection came with Jon Heaton’s departure in July. He left to go to work with Steinberg at Excel Sports Management, but IMG is pursuing the same legal course of action to block that move, based on the noncompete clause. That case is pending.

Excel Sports Management is another firm in the center of the activity. Originally formed as a basketball player representation firm by NBA player agent Jeff Schwartz in 2002, it expanded into a multisport agency by hiring Steinberg and MLB agent Casey Close last year. The firm is clearly on a hiring spree, but its partners have been mum about their plans. Close confirmed that Excel had hired J.D. Smart, Jim Murray and Matt Laird from Hendricks Sports Management and David O’Hagan from CAA Sports last month, but declined further comment.

Many are also watching how Paul fills out Klutch Sports Group. While James was expected to officially sign on as the first new client for the firm, it is unclear just how many players will follow the other agents to their new employers’ agencies.

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