SBJ/April 7-13, 2014/Labor and Agents

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  • Total guaranteed dollars rise for NFL free agency signings

    Liz Mullen
    In the first three weeks of NFL free agency, clubs agreed to pay unrestricted free agents $760.8 million in total guaranteed money, an increase of 24.3 percent over the same period last year, according to the NFL Players Association.

    NFL clubs signed 226 unrestricted free agents, or UFAs, as they are known in the business, in the first three weeks, compared with 186 UFAs last year. Last year’s group signed contracts with a total guaranteed dollar value of $612.5 million.

    The amount of money that clubs have spent on the first year of 2014 UFA contracts so far is $692.2 million, up 21.8 percent from $568.5 million last year.

    “I think it’s a result of the revenues going up, the cap going up, and required minimum cash spending,” said George Atallah, NFLPA assistant executive director of external affairs.

    Before the opening of free agency, the 2014 salary cap was set at $133 million, an increase of $10 million, the biggest jump since the new NFL collective-bargaining agreement began in 2011. The NFL salary cap was $120.3 million in 2011; $120.6 million in 2012; and $123 million in 2013.

    The CBA also contains a provision in which clubs are required to spend an average of 89 percent of the salary cap over a four-year period through 2016.

    “With respect to the economics of the 2011 CBA, player leadership knew that our growth was tied to league growth,” Atallah said. “As league revenues have improved and gone up, players have more money available to them that teams have to spend because of the new minimum spending provision in the CBA.”

    NFL spokesman Greg Aiello declined comment on the numbers, noting that free agency spending was a club-by-club issue, not a league matter.

    The pool of available UFAs was smaller this year, 402 compared with 420 last year. In the first three weeks of free agency this year, 56.2 percent of UFAs had signed contracts, compared with 44.3 percent last year.

    “I think you can attribute a lot of that to there was a pretty significant and relatively unexpected increase in the cap room,” veteran agent Pat Dye Jr. said. “I think that is the catalyst or impetus for a faster rate of UFAs being signed at this point.”

    Although the total amount of guaranteed money and first-year money is up, the average annual value of the 2014 UFA contracts is relatively flat, at $2.628 million, compared with $2.592 million, an increase of 1.4 percent. Average first-year value for the 2014 UFA contracts was $3.062 million, compared with $3.056 million, an increase of 0.2 percent.

    The NFLPA did not have numbers available on how many players signed one-year deals versus multiyear deals.

    Skov gets the star rookie treatment in Spanish.

    > UPPER DECK IN SPANISH: The Upper Deck Co. has produced its first Spanish-language American football card, featuring Stanford linebacker and 2014 draft prospect Shayne Skov, who speaks fluent Spanish and learned to play American football in Guadalajara, Mexico.

    The card will be released nationwide as part of Upper Deck’s set of about 200 rookie cards, which will be available for sale in retail outlets such as Target and Wal-Mart on April 16. “If it’s popular and we get a great response, we are definitely open to doing this again,” said Brandon Miller, brand manager for Upper Deck.

    Miller said the company became interested in doing a Spanish-language card for Skov after learning his story from his agent, Steve Baker, founder of Baker Sports Group. Skov was born in America but lived in Mexico for four years.

    > SPORTSTRUST SIGNS SEVERAL: Dye’s agency, SportsTrust Advisors, has signed eight prospects for the NFL draft, as well as Broncos offensive tackle Winston Justice.

    Agent Michael Perrett will represent Justice. He was formerly represented by Premier Sports Management.

    For the NFL draft, SportsTrust is representing Georgia Tech outside linebacker/defensive end Jerry Attaochu, Alabama outside linebacker/defensive end Adrian Hubbard, Tennessee offensive tackle Ja’Wuan James, Georgia quarterback Aaron Murray, Auburn fullback Jay Prosch, Stanford safety Ed Reynolds, Florida cornerback Marcus Roberson and Ohio State cornerback Bradley Roby. SportsTrust agents Dye, Perrett and Bill Johnson will represent the players.

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


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  • MLBPA takes hit in licensing revenue

    The Major League Baseball Players Association last year generated its lowest amount of licensing revenue in nearly a decade, primarily the result of the loss of a lucrative video game contract with Take-Two Interactive.

    The 2013 annual report for the union, filed last week with the U.S. Department of Labor, showed revenue from “other receipts,” where licensing income is listed and itemized, at $38.98 million. The sum is down 34 percent from the year before, and the lowest such figure for the MLBPA since 2004, before the arrival of more detailed reporting rules for American labor unions in 2005.

    Payments are credited in the years they are received and not earned, and the report, also known as an LM-2, is based on cash and not accrual accounting, so views into the financial state of the organization can be deceiving. Still, 2012 marked the final year of a seven-year pact with Take-Two, parent company of 2K Sports and maker of the troubled “MLB 2K” video game series.

    The company paid the MLBPA $16.3 million in 2012. That number fell to $1.66 million last year as the game developer surprisingly returned on a one-year deal to make “MLB 2K 13.”

    Take-Two no longer holds a license with either the union or MLB Properties, and on multiple occasions called its 2005-12 baseball deal a drain on the company’s finances.

    Other major payees to the MLBPA last year included trading card licensee Topps at $10.5 million; Majestic parent VF Knitwear at $6.4 million; and Sony Interactive Entertainment, maker of the video game “MLB: The Show,” at $3.5 million.

    The late Michael Weiner, the union’s executive director from 2009 until his death last November, received $1.1 million in salary last year, as well as an additional $3 million payment. MLBPA executives declined to comment on the LM-2 report or any facet within it.

    The next-highest-paid MLBPA employees were senior adviser Rick Shapiro at $705,000; general counsel David Prouty at $665,833; Tony Clark, previously director of player relations and deputy executive director and now Weiner’s successor as executive director, at $616,613; senior labor counsel Ian Penny at $530,000; and Timothy Slavin, director of business affairs and licensing, at $525,000.

    The union’s new chief operating officer, Kevin McGuiness, was hired in January, and does not appear in this report for calendar year 2013 as a salaried employee.

    MLB players early last year received a distribution of 2012 licensing funds totaling $33.87 million. The amounts, based on each player’s service time, were as high as $28,307 a player. The distributions were similar to the $28,041 licensing checks each veteran player received in early 2008, a comparable point in baseball’s collective-bargaining cycle.

    But with licensing revenue down last year, the union’s asset base is also at a relatively low level. The MLBPA reported total assets at the end of 2013 of $92.77 million, down from $104.1 million at the end of 2012, and the lowest figure for the union since 2004.

    Research director David Broughton contributed to this report

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  • Octagon reboots golf representation business

    Octagon has re-entered the golf representation business as it looks to dive back into athlete management and golf course development.

    The company has hired four veteran executives, including Stuart Cage, formerly the lead agent for Chubby Chandler’s ISM where he managed Rory McIlroy. It has also brought on former IMG golf executive Ross Chouler, former IMG and Gaylord Sports Management executive Terry Baller and former PGA Tour player and recently turned agent Joel Kribel.

    Yates
    Cage
    Baller
    Chouler
    Kribel
    “This is a comprehensive relaunch of our golf player management business on a global scale with highly respected and experienced people,” said Octagon President Phil de Picciotto.

    Cage will work out of London; Chouler will work out of Octagon’s headquarters in McLean, Va.; Kribel will be based in Scottsdale, Ariz.; and Baller will be in Cleveland.

    All will report to Octagon Golf Managing Director David Yates, a veteran executive hired last July after spending 28 years working at IMG, Gaylord Sports Management and Lagardère Unlimited Golf. (Lagardère Unlimited acquired Gaylord Sports Management in January 2012.)

    Yates was charged with rebuilding an Octagon golf division that had faded with the loss of key personnel, including Giff Breed, Vernon Spratley and Vinny Giles, over the years. In 2011, Octagon announced that it no longer would seek golfers to represent. Yates’ hiring last year signaled a reversal of that strategy. He has spent the last nine months charting a new course for Octagon Golf, one that would take the division back into athlete representation and golf course design in a big way.

    Cage’s hiring is perhaps the most significant of the new moves because of his global connections and experience working with McIlroy, 2010 British Open champ Louis Oosthuizen, Peter Uihlein and others. Cage’s title will be director of global golf for Octagon, and he will direct player management efforts across Europe, the Middle East and Africa.

    Yates would not say what player clients may be following Cage and the other new hires to Octagon Golf but said he hopes to make new client announcements by the end of this month. Additionally, Yates said, he expects to make new Octagon Golf employee announcements later this month.

    Octagon has a strong golf events business, managing several events on the LPGA and Champions tours, as well as a strong corporate consulting business in golf, with clients such as BMW and MasterCard. Scott Seymour oversees consulting, while Chris Higgs runs events.

    Baller, director of golf course and facility design, most recently worked at a company he founded, Sustainable Sports Solutions. He will be involved in golf course design and renovations globally, as well as launching sports academies. Yates indicated that Baller was on the verge of new design business in Southeast Asia and the U.S.

    Chouler, who worked in business development during six months with IMG in South Africa, will be a client manager.
    Kribel, a former All-American golfer at Stanford, “has hit the ground running” in his new career as an agent, recruiting current pros and using his college contacts to dig into the amateur ranks, Yates said.

    Octagon’s move back into golf follows a pattern of large, global agencies making big bets on the sport.

    Lagardère Unlimited recently bought Crown Sports and its stable of 20-plus golfers to go with the assets it acquired with Gaylord, making it among the largest golf agencies. Wasserman Media Group has over the last two years built its player base to go with a strong golf consulting business. And IMG Golf vows to retain its status as a major player with a strong global events and media business to offset significant personnel losses in the last few years.


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