SBJ/February 25-March 3, 2013/Labor and Agents

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  • Acquisition of CSMG pays off for Octagon by way of Venezuela

    Liz Mullen
    When pitcher Felix Hernandez signed a seven-year, $175 million extension with the Seattle Mariners, it made headlines because he became the highest-paid pitcher in Major League Baseball. For his agents at Octagon, the deal was the result of years of work put into identifying and representing talent from Venezuela. It also represents one of the fruits of the agency’s 2008 decision to acquire the baseball practice of the former CSMG.
     
    Octagon MLB player agents Scott Pucino, Wil Polidor and Jose Mijares negotiated the deal with the Mariners that will pay the 2010 Cy Young Award winner $25 million a year. They signed Hernandez when he was 16, and Pucino remembers, “When Felix was 16, Wil saw him and said, ‘I saw a kid throwing you would not believe.’”
     
    Octagon client Felix Hernandez signed a deal making him the highest-paid MLB pitcher.
    Photo: GETTY IMAGES
    Said Polidor, a former minor league baseball player and a native of Venezuela, “For 13 years, we were working in Venezuela, and it is starting to pay off.”
     
    CSMG hired Polidor and Mijares in 2000, and they joined Pucino, who was already there. The three then joined Octagon as part of the 2008 acquisition.
     
    Octagon represents about 30 baseball players from Venezuela, including about 20 major leaguers and 10 minor leaguers or prospects. Those Venezuelan clients, who came over as part of the CSMG acquisition, include Arizona Diamondbacks catcher Miguel Montero, who agreed to a five-year, $60 million deal during the 2012 season, and Detroit Tigers slugger Victor Martinez, who agreed to a four-year, $50 million free agent deal in 2010. Octagon also represents Cleveland Indians shortstop Asdrubal Cabrera and Tigers second baseman Omar Infante, both from Venezuela.

    Alan Nero, the founder of the former CSMG, serves as managing director of Octagon Baseball, and Pucino, serves as senior director. Nero was one of the first major baseball agents in the U.S. to focus on Venezuela, dating back more than a dozen years. In addition to about 30 Venezuelan players, Octagon represents about 50 baseball players from the U.S. and another 20 from Asia.

    The sports talent business is rife with stories of acquisitions that didn’t work out, but that is not the case with Octagon’s purchase of the CSMG baseball practice, Nero said. It will be five years this fall since Octagon acquired the CSMG practice, and the core group of clients and agents remain, Nero said. Octagon continues to focus on baseball globally and has added three baseball agents since it acquired CSMG.

    Nero and Pucino report to Octagon President Phil de Picciotto.

    As for the record deal for Hernandez, Pucino said, “It was never about him being the highest-paid pitcher. He was more concerned about his family and keeping them in Seattle. They all like it there.”
     
    > REP 1 SIGNS PROSPECTS: Rep 1 Sports, the NFL player representation firm owned by cousins Bruce and Ryan Tollner, has signed Colorado tight end Nick Kasa for representation in the NFL draft.

    Rep 1 also has signed San Jose State players Ryan Otten, a tight end, and David Quessenberry, an offensive tackle. The Tollners and Rep 1 Sports agents Chase Callahan and Brian Parker will represent the players.

    Otten and Quessenberry had been represented by agent Steve Caric of Caric Sports Management, but the two left the agency in January. Caric said the reason for the termination was because he had signed Stanford tight end Zach Ertz, and Otten did not want to be represented by an agent who represented another tight end. Quessenberry left because he is Otten’s friend, and the two wanted the same agent.

    Bruce Tollner, when asked why the players signed with Rep 1 when the Irvine, Calif.-based agency also represents Kasa, another tight end, said he was not comfortable discussing why clients had terminated another agent. Otten and Quessenberry could not be reached for comment.
     
    > OTHER NFL DRAFT SIGNINGS: Eastern Athletic Services has signed Connecticut linebacker Sio Moore. Agents Tony Agnone and Eddie Johnson will represent him. … NFL agents Neil Schwartz and Jonathan Feinsod have signed Kentucky offensive guard Larry Warford. … SportsTrust Advisors has signed Florida State offensive tackle Menelik Watson. Agents Pat Dye Jr. and Bill Johnson will represent him.

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

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  • Players taking cautious path to fill NBPA post

    The National Basketball Players Association moved swiftly to fire Executive Director Billy Hunter, but the search to replace him is likely to be more deliberate, as the union has not yet set guidelines for the search process.

    “The players are in the process of prioritizing their next steps,” an NBPA spokesman said, in a statement to SportsBusiness Journal. “The Executive Committee will be evaluating the options in terms of procedure and parameters. There is a commitment that whatever path is chosen, it will be open, transparent and comprehensive.”

    As of this time, an executive search firm has not been retained.

    NBPA player reps voted unanimously on Feb. 16 to terminate Billy Hunter’s contract as executive director.
    Photo: GETTY IMAGES
    Player representatives voted unanimously to terminate Hunter’s contract on Feb. 16, almost a month after law firm Paul, Weiss, Rifkind, Wharton & Garrison issued a report that found Hunter acted in his self-interests and not on behalf of the players.

    Before the vote of player reps in Houston, NBPA President Derek Fisher, union officials and outside attorneys met with about 20 to 30 NBA player agents and explained why they put Hunter on leave as well as discussed that he was under criminal investigation, according to multiple agents who attended the meeting. The U.S. attorney’s office, the U.S. Department of Labor and the New York attorney general’s office are investigating Hunter.

    NBPA Acting Executive Director Ron Klempner, Fisher, Paul Weiss attorneys Amy Gold and Dave Brown, as well as Orrick, Herrington & Sutcliffe attorney Christina Sarchio addressed the agents, according to sources in the room.

    “They basically said, the momentum was such that Billy’s time had come and gone,” said one agent. Another agent said, “It was all about what the report said. It was zero about moving forward.”

    Agents requested anonymity, saying they were not authorized to speak publicly about union business.

    Agents said that union officials stressed during the meeting that they wanted agents’ input on the union’s future. “Derek Fisher did say he wanted this to be a collective process with everyone informed,” a third agent said.

    Since Jan. 17, the day the Paul Weiss report was issued, there have been reports and speculation that agents, and particularly seven prominent agents, would have a strong say in the union’s future leadership. Four of the top NBA player agents, BDA Sports President Bill Duffy, Priority Sports & Entertainment President Mark Bartelstein, and CAA Sports basketball division co-heads Leon Rose and Henry Thomas, attended the union meeting, sources said. The other three agents of the group, Excel Sports Management founder Jeff Schwartz, Relativity Sports Basketball President Dan Fegan and Wasserman Media Group Vice Chairman Arn Tellem, did not attend.

    Despite reports suggesting that those agents were pushing certain candidates for the union’s top job, sources, including agents in the group, told SportsBusiness Journal they had not held any conference calls or meetings with each other as of late last week.

    In a telephone and email interview, Tellem suggested that the union take its time in filling the position and suggested players consult with experts, including current NHL Players’ Association Executive Director Don Fehr, as well as current MLBPA Executive Director Michael Weiner.

    “No labor leaders could offer better counsel than Fehr and Weiner, both of whom have devoted their careers to standing up for athletes,” Tellem said.

    The other prominent agent who has offered advice publicly about what NBA players should do going forward is David Falk, who suggested that the union look at hiring two people to run it. One would be a labor lawyer and the other a businessperson who would be devoted to helping to increase NBA revenue, since players are paid a percentage of revenue.

    Falk said last week that the union would be wise to involve agents in future decisions. “What I told Billy Hunter the very first day he took the job in 1996, is, ‘There are 10 agents who represent 75 to 80 percent of the players. You need to get those 10 guys in a room and have it out and when you are done, come to a consensus and have those agents sell it to their clients.’ From day one, he didn’t do that,” Falk said.

    Both Tellem and Falk, in separate interviews, stressed that players must be engaged on the future of the union. Falk noted that Miami Heat forward LeBron James was one player who reportedly drove the discussions during the player meeting that resulted in the termination of Hunter.

    “I am very proud of the stance that LeBron took,” Falk said, in a telephone interview last week. “He was very vocal. He exercised a leadership role and I am proud of him. I think all the young stars in the league, Kevin Durant, Chris Paul, Russell Westbrook, have to do likewise because their voice is going to have way more impact than a guy who is the 12th guy on the team. That is just reality.”

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