SBJ/April 15-21, 2013/Labor and Agents

How powerful a player will Roc Nation be?

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

Jay-Z has carved out a career as one of the most successful hip-hop artists and entrepreneurs in the United States, and his move into the sports business is being met with a mix of apprehension, anticipation and, in some areas, dread.

While he is very early in the process of establishing his Roc Nation Sports, the simple presence of Jay-Z has led to questions about his vision and role in trying to create a sports powerhouse.

Jay-Z has agents talking.
Photo by: NBAE / GETTY IMAGES
As of last week, a few details of the new company began to emerge, including the fact that Roc Nation Sports will not work with any sports talent agencies other than CAA Sports. Additionally, Roc Nation will hire established sports agents in multiple sports as well as have its own employees, including Jay-Z himself, certified.

After establishing a relationship with CAA Sports and MLB player agent Brodie Van Wagenen over the representation of the New York Yankees’ Robinson Cano, Roc Nation Sports will look to work with other CAA agents across other sports. But it would be an exclusive relationship, preventing Roc Nation Sports from working with clients of other talent firms.

CAA Sports officials declined to comment for this story, and Ron Berkowitz, spokesman for Roc Nation Sports, would not reveal details or the financial arrangement of the partnership, saying only, “CAA is one of the leaders in the business, who better to partner with?”

How the relationship between the two would operate was still unclear to many in the representation community, with most believing that Roc Nation Sports would handle more off-the-field endorsement and business partnerships, and CAA exclusively handling playing contracts. Whether that would continue as Roc Nation Sports executives become certified and as the relationship with CAA deepens is uncertain at this point.

Ever since Jay-Z announced his new sports division would partner with CAA Sports, agents throughout the industry have been questioning what both parties have to gain, as well as what it means for the representation business.

While Cano was Roc Nation Sports’ one official client as of last week, it’s clear the company has plans to build a full talent practice based out of New York.

As usual in the agent community, the entrance of a new high-profile player was met with a mix of wariness and outright dismissal. Time will tell, agents said, if Roc Nation Sports will be a major player. Many agents stressed that they had to look beyond the avalanche of press on Jay-Z’s venture to question how an entertainer of his stature could function as an agent and whether his many business interests would make him too conflicted to represent players.

But to one longtime agency veteran who has seen many names enter the sports field, the response was tinged by jealousy.

“I don’t understand — other than the fact that Jay-Z is an enormous name in entertainment — why the reaction is so strong,” veteran NBA player agent David Falk said, who characterized the response as one of hysteria. “The people who are hysterical about it are hysterical because they are afraid he will have an edge.”

Where the edge could come is through Jay Z’s relationships. Many professional athletes have personal friendships with him and many more are fans of his music. In addition, Jay-Z could offer athletes more access to the music and entertainment industries and celebrities in those worlds.

Jay-Z (with Kobe Bryant) is a minority owner with the Nets, but baseball’s Robinson Cano (below) was his first signing.
Photos by: GETTY IMAGES
But a lot of agents questioned privately if Jay-Z was really willing to do the mundane tasks sports agents must do, such as attending union seminars, or why he would want to get into a business known for cutthroat tactics, in the first place. But Jay-Z wouldn’t necessarily have to do all those tasks, instead leading the agency, offering vision and access, while staffers would work on the other day-to-day issues.

“We have seen many people with all different kinds of personalities try to enter into this space,” said Phil de Picciotto, Octagon president, who has represented talent for more than 30 years. “Most of them failed because the business is very different than what people
imagine it to be. But Jay-Z understands the business because of who he is. He has the financial assets and the name awareness to be able to do it, if he finds it is really something he wants to do.”

Longtime NFL agent Drew Rosenhaus said he did not know Jay-Z personally or his plans. But Rosenhaus said, “I wish him good luck. I will tell him this is a tough business. I will tell him if he wants to have success in this business, he will have to work extremely hard. And, at the end of the day, I look forward to competing with him.”

In terms of recruiting possible friends or athletes he has relationships with, one of Jay-Z’s friends is New York Giants wide receiver Victor Cruz and multiple news outlets reported earlier this month that Cruz was close to becoming a client of Roc Nation Sports.

CAA Sports NFL agents Tom Condon and Ben Dogra recently signed Cruz for playing contract work, but Cruz’s off-the-field endeavors are handled by IMG, and last week, Sandy Montag, IMG senior corporate vice president and managing director of clients, told SportsBusiness Journal that Cruz remains a client of IMG.

MLB player agent Scott Boras, who lost Cano to Roc Nation Sports, said that Jay-Z’s celebrity, in itself, was a potential problem in him representing athletes with corporate advertisers and others.

“A celebrity representing another celebrity raises an immediate conflict,” Boras said. “The [athlete receiving] a celebrity’s representation is clouded with who the promotion is for. A celebrity who is currently marketing his own brand is no different than an actor representing another actor while they are both seeking the same part.”

Boras said it was the job of sports unions to protect athletes from any potential conflicts.

Berkowitz said Roc Nation officials intend to be certified to represent players in contract work with the NFL, NBA and Major League Baseball.

To be a certified agent for NFL players, the applicant must take a test with the NFL Players Association, among other things, and the deadline to apply to take the test for this year has already passed without Jay-Z applying. The soonest he could take the test would be July 2014, and the soonest he could be certified to represent NFL players in playing contract work is October, 2014. But this would not preclude Jay-Z from representing NFL players for endorsements and other off-the-field deals.

Jay-Z (whose real name is Shawn Carter) and two other Roc Nation executives, president Juan Perez and vice president Rich Kleiman, have temporary certification from the MLB Players Association, but that certification does not allow them to represent Cano or any other MLB player in contract talks with clubs.

All applicants for MLBPA certification must fill out a lengthy and detailed application form disclosing, among other things, their business interests.

MLBPA Executive Director Michael Weiner said last week the union would review the “application from all the Roc Nation individuals” and “examine if there are conflict or ownership issues that need to be addressed.” He also addressed whether Jay-Z would divest his ownership interest in the New Jersey Nets. The MLBPA, like other sports unions, has prohibitions against agents having an actual or perceived conflict of interest in the representation of players due to ownership of teams or other business interests.

Jay-Z was reportedly in the process of divesting his less than 1 percent interest in the team last week.

Robert Gadson, National Basketball Players Association director of security and agent administration, said an ownership of a basketball team would likely preclude any applicant from being certified to represent NBA players in contract talks with NBA clubs. Jay-Z and other Roc Nation Sports executives had not applied for NBPA certification as of press time for this story.

At least one agent praised Jay-Z for wanting to be in the agent business so much that he was looking to sell his interest in the Nets.

“It’s flattering that he wants to get into this business enough that he is willing to give up an ownership interest in a team,” Rosenhaus said.
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