SBJ/March 11-17, 2013/Labor and Agents

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  • Douglas latest addition to CAA Olympic roster

    Editor's note: This story is revised from the print edition.

    Olympic gymnast Gabby Douglas, the first African-American to win a gold medal in the individual all-around competition, has left her agent Sheryl Shade and signed with CAA Sports.

    Douglas is the latest in a series of high-profile Olympians to change representation and sign with CAA after a recent Olympic Games. Snowboarder Shaun White left IMG after the Vancouver Olympics, and swimmer Ryan Lochte left his manager, Erika Wright, after the London Games.

    Gabby Douglas joins Shaun White and Ryan Lochte at CAA.
    Photo: GETTY IMAGES
    The three are part of a growing roster of Olympic athletes represented by CAA. Lowell Taub, who leads the Olympic representation efforts, also works with track star Sanya Richards-Ross and skiers Julia Mancuso and Bode Miller.

    CAA had no comment for this story.

    Since White became a client, the agency has negotiated several new deals for the snowboarder, including agreements with BF Goodrich and Stride for his own line of gum. It hasn’t announced any new deals for Lochte, but the swimmer will star in a six-episode reality show on E! Entertainment.

    Douglas was a relatively unknown and unheralded gymnast when she burst onto the national scene a year ago by upsetting teammates Jordyn Wieber and Alexandra Raisman at the AT&T American Cup. She subsequently signed with Shade, who has worked with Olympic gymnasts ranging from Shannon Miller to Shawn Johnson.

    By then, most Olympic sponsors had signed athletes for their London marketing programs, and Douglas didn’t have many endorsement opportunities. But Shade managed to land Douglas and her mom a deal with Procter & Gamble.

    After Douglas won two gold medals, one in the individual all-around competition and another with her team, she vaulted into the national spotlight. Buzz Bissinger profiled her in Vanity Fair and she appeared on “The Tonight Show” with Michelle Obama.

    Over the last eight months, Shade negotiated deals for Douglas with Nike, YoCrunch yogurt, Nintendo and OPI, an artificial nail company. She also finalized a book deal with Zondervan, a HarperCollins company, to publish Douglas’ memoir “Grace, Gold and Glory: My Leap of Faith.” The book made The New York Times best-seller list.

    CAA has been pitching Douglas to other companies in recent weeks. It’s unclear what categories or opportunities it plans to pursue for Douglas.

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  • NFLPA, coaches association settle their lawsuits

    The NFL Coaches Association and the NFL Players Association have settled their lawsuits against each other.

    David Cornwell, executive director of the coaches association, confirmed the lawsuits were settled earlier this month and could not be refiled. He declined to offer specifics.

    Cornwell, a well-known player lawyer, ran for the NFLPA’s top post in 2009, ultimately losing out to current NFLPA Executive Director DeMaurice Smith. Since then, the two have verbally sparred, and the lawsuits were filed in 2012 in a Washington, D.C., court.

    The coaches association had essentially been a division of the NFLPA for a decade, prior to the group electing Cornwell as its executive director in February 2012. The NFLPA then refused to allow Cornwell to tap into a union-controlled coaches association bank account, which had $308,509.69. The NFLPA also demanded the group pay back union loans the lawsuit said totaled $650,324.88.

    The NFLPA questioned the validity of Cornwell’s election, as well.

    The NFLCA represents coaches but is not a union.

    Cornwell said the coaches association is now operating as its own group. He would not say whether he had gained access to the bank account.

    “We are moving on,” Cornwell said.

    The NFLPA did not respond for comment.

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  • Legacy Agency signs Walsh Jennings, readies new strategy

    Liz Mullen
    Editor's note: This story is revised from the print edition.

    The Legacy Agency has signed three-time Olympic gold-medal-winning volleyball player Kerri Walsh Jennings for exclusive representation in all areas.

    Brandon Swibel, TLA senior director, talent marketing and corporate partnerships, will represent her. Walsh Jennings was formerly represented by Morgan Advisory Group.

    TLA is looking for speaking engagements, TV work and corporate partnerships for Walsh Jennings. She has existing partnerships with Microsoft and with nutritional supplement brand BioPharma Scientific.

    Her previous sponsorship deals have included Gatorade, Visa, Procter & Gamble, and Oakley.

    “She has had a ton of major corporate sponsorships in the past,” Swibel said. “But, you know, a lot of Olympic deals run through the year of the Olympics. A lot of them ran through 2012. So we probably will renew with some of those companies, but we are coming up with an overall strategy to try to align with the right companies.”

    Walsh Jennings and teammate Misty May-Treanor won the Olympic gold medal for beach volleyball in 2004, 2008 and 2012. Walsh Jennings, 34, plans to compete in the 2016 Olympics in Rio, Swibel said. She will turn 38 on Aug. 15, 2016.

    Walsh Jennings revealed on the “Today” show last September that she was five weeks pregnant while competing during the 2012 Games. “After she has this baby in April, she plans to be back [competing] in June,” Swibel said.

    Walsh Jennings has two other children.

    “She really wants to transcend both beach volleyball and the Olympics and really be a role model as the prototypical, on-the-go mom,” Swibel added.

    > FRANCHISE TAGS DROP: Eight NFL clubs placed franchise tags on players this year, down from the record 21 last year, and two prominent NFL player agents say a lack of salary cap room may be the reason for the decrease.

    “At the risk of oversimplifying it, I think the scarcity of the use of franchise tags is due directly to the relative scarcity of cap room,” said agent Pat Dye Jr., via text message. “This affects the current teams ability or willingness to consume too much cap with a tag.”

    Dye, president of SportsTrust Advisors, represents Denver Broncos left tackle Ryan Clady, who was one of the eight players who received a franchise tag, which gives the team the right to sign a player to a one-year deal at a certain dollar amount that is calculated based on what top players at that position have earned over the past five years. Tagged players can get offers and sign with other clubs, but their old club has the right to match the offer, and if it does not, the original club receives two first-round picks from the new club that signs the player. This severely limits a player’s ability to move because most clubs are not willing to give up those draft picks.

    Last year, most players either negotiated long-term deals with the club that tagged them or accepted and played under the one-year salary. But the tag counts against the salary cap until a deal is accepted or negotiated. The salary cap increased this year by $2.4 million to $123 million, the most it has increased under the current collective-bargaining agreement, but not as much as it increased under the previous CBA.

    “As for Ryan Clady, if he was not franchised, he could choose from several offers that would make him the highest-paid offensive tackle in football on the first day of free agency,” Dye said. “That dynamic makes being franchised very frustrating.”

    Eugene Parker, head of Relativity Sports’ football division and agent for Buffalo Bills safety Jairus Byrd, another tagged player, also cited cap room as a reason for the reduction. While he noted the tag “eats up” a team’s cap room, he said such a move “is something the rules allow them to do, and they did it.”

    NFL spokesman Greg Aiello said the league had no comment on the decrease in franchise tags. “Each club makes its own decisions,” he stated in an email.

    > VET IN, PROSPECT OUT: Five Star Athlete Management has signed Atlanta Falcons defensive tackle Vance Walker. If not resigned by the Falcons, he will be an unrestricted free agent Tuesday. Five Star CEO and NFL agent Todd France will represent Walker. He was formerly represented by Universal Sports Management & Entertainment LLC.

    Also, Five Star has parted ways with draft prospect Sam Montgomery, a defensive end from LSU. “We wish him the best of luck in the future but this decision was in the best interest of both parties involved,” France said in a statement.

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

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  • Change in draft-pick compensation questioned

    The MLB Players Association and some baseball player agents think the sport’s shift to attach draft-pick compensation to only top-tier free agents may have inadvertently interfered with the market for those players.

    Under terms of the collective-bargaining agreement, teams can receive draft-pick compensation for lost free agents only if they make one-year qualifying offers equal to the average of the top 125 MLB salaries, which for this year was $13.3 million. The rule replaced one in which any free agent offered arbitration by his team would then yield draft-pick compensation if he signed elsewhere.

    The shift was designed to attach the draft-pick compensation to only the very best free agents, protecting teams that lose big stars while also opening up market opportunities for lesser players. Indeed, just nine players met the standard this year, compared with 37 in the winter before the 2012 season: Michael Bourn, Josh Hamilton, Hiroki Kuroda, Adam LaRoche, Kyle Lohse, David Ortiz, Rafael Soriano, Nick Swisher and B.J. Upton.

    All but Lohse have signed for the 2013 season, and four teams surrendered picks in this summer’s first-year player draft, including Cleveland, which parted with two for signing both Bourn and Swisher.

    Hamilton signed a five-year $125 million pact with the Los Angeles Angels, and Upton left Tampa for Atlanta in a five-year $75.25 million deal. Swisher also shifted teams, going from the New York Yankees to Cleveland, as did Soriano, from the Yankees to Washington.

    But Bourn’s four-year, $48 million deal with the Indians, signed only a month ago, arrived far later than expected and did not approach the Upton-type salary numbers originally sought. Soriano’s market, similarly, was fairly constrained for a closer of his stature, and Lohse, despite a 16-3 season in St. Louis in 2012, remains unemployed to the surprise of many around baseball.

    “That compensation seems to have interfered with some players’ negotiations in the way it did, in my view, was not contemplated,” by either the league or union, said Michael Weiner, MLBPA executive director. “The downside to the clubs is that they want to improve their clubs, but compensation gets in the way.”

    Said an agent speaking on the condition of anonymity, “I don’t know if the system was intended to hamper the market for those nine players, but it clearly did.” Agents requested anonymity, saying they were not authorized to speak publicly on union matters.

    Another agent said the prior free agency rules spread out the impact of compensation more evenly among clubs, and teams that lost draft picks for signing a player often gained one back in the same offseason. The current system, the agent said, conversely concentrates all that impact upon the top-tier free agents and, in this agent’s view, “needs to be tweaked.”

    The current CBA also assigns signing-bonus pools for each team in the first-year player draft, with significant penalties for exceeding those aggregate pools. Teams that forfeit a draft pick for signing a top free agent also part with the money associated with the pick for purposes of their draft compensation pool — in essence doubling the impact of signing a free agent.

    Both Weiner, and Rob Manfred, MLB executive vice president for economics and league affairs, said free agency compensation will be discussed as part of continuing discussions on labor matters.

    “Our intention was to have compensation attach only to players with sufficient value, that there would be a market for those players, despite the compensation,” Manfred said, adding the system was not meant to be punitive. “With one exception, that worked out as well.”

    Manfred declined to specify what he meant by the “one exception.” Both Manfred and Weiner responded to SportsBusiness Journal questions via email.

    Larry Reynolds, Upton’s agent, said he did not believe all nine players in question were hurt by the new system, in part citing his client’s pact that joins him with his brother, Justin, in Atlanta’s outfield.

    “All nine players went into this season of negotiation with their eyes wide open,” Reynolds said. “They were offered a one-year contract and they were able to accept it or reject, and they all went into the market.”

    To Reynolds’ point, Indians President Mark Shapiro said the club has spent years seeking to assess the worth of each draft pick, even before the advent of the new CBA. As a result, the draft-pick compensation was a central factor in the decision to sign Swisher and Bourn, and the club ultimately felt the upside from the two veterans outweighed what might come from the future prospects.

    “We place a value on each draft pick. Over time, we have worked to become more and more effective at determining this value, thereby providing us a guideline to assess the value of a free agent as opposed to the lost opportunity of the pick,” Shapiro said via email.

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