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Volume 21 No. 13

Labor and Agents

The National Basketball Players Association is making a significant move this summer as it takes its marketing and merchandising rights in-house after more than two decades of leasing them to the NBA.

The move comes amid an extension of the league’s collective-bargaining agreement, the framework of which was agreed upon last month, and the union and league were close to completing a 600-plus-page deal last week. The general licensing agreement traditionally has the same term years as a CBA and is completed afterward.

In 1995, the GLA allowed the league to rent player rights for marketing, sponsorship and advertising. However, under new union leadership, including Executive Director Michele Roberts, who was hired in July 2014, and Jordan Schlachter, hired a year later as the NBPA’s first chief marketing officer, the union has been gradually moving toward taking back at least some of its rights.

“This should have happened a long time ago, but now we have the resources in place,” Schlachter said in his first public comments on the move. “NBA players are unique in the marketplace at this point, in their popularity and in their ability to influence people.”

The move by the NPBA to take back all of its marketing rights during the negotiations was noteworthy since there was discussion along the way of a hybrid model that would have left some of the rights with the league.
 
The NBPA was the only union of the major stick-and-ball sports to license out its rights. According to its most recent LM-2 filing, the NBPA received around $41 million from the league during the fiscal year ending June 30, 2016, in payment for its licensing and sponsorship rights. At a minimum, taking those rights back indicates the union thinks it can increase that return.

“We have not quantified that for our players, but I’d look for an immediate (increased) return,” Schalchter said. “We’re going to do better every year moving forward. … Our players have made it clear that they want us to explore other opportunities.”


Controlling its own marketing rights means the NBPA will be free to sign competitive licensing and sponsorship deals, explore additional player-only licensed product agreements, and stage and sell its own events. Even use of the PA’s own logo was restricted under the old agreement. So the move opens up a significant number of new opportunities for corporations, licensees and media entities to associate with NBA players and possibly events.

The most immediate impact of the PA taking its rights in-house is that NBA licensees using player names and likenesses will need to cut separate deals with the union, as they no longer will have automatic player rights. Schlachter said an agreement allowing NBA sponsors the ability to use players in uniform for marketing purposes was still a possibility.

Licensees with the longest lead times, like video game and trading-card manufacturers, could be granted exemptions. As a former NBA employee, Schlachter is promising licensees a relatively seamless transition. “Some of the dynamics are changing a little, but we look forward to continuing to grow a strong business,” he said.

In running in its own licensing programs, like other big stick-and-ball player unions, the NBPA will need to staff up, as it currently has a very small marketing staff.

The PA is expected to discuss specifics with membership during meetings around the NBA All-Star Game in mid-February.

The NBA had no comment, seeking to defer remarks until a CBA is formally signed.

When entrepreneur and VaynerMedia CEO Gary Vaynerchuk dipped into the sports agent business last year by buying a small NFL player representation shop, he expected his first year to be a time to set the table for success down the road.

“I was really hoping in year one, we’d have solid third-, fourth-, fifth-round picks,” Vaynerchuk said last week. “I was very aware, even though I had accomplished things in the past, I didn’t want to get ahead of ourselves, I knew we had to make a name for ourselves.”

Instead, the company, which was formed last June when Vaynerchuk acquired a majority stake in New York-based Symmetry, scored “a massive home run,” he said.

VaynerSports has signed three players for the NFL draft: Tennessee running back Alvin Kamara, Tennessee linebacker Jalen Reeves-Maybin and Kentucky center Jon Toth. Brian McLaughlin and Mook Williams, formerly of Symmetry and now of VaynerSports, are representing the players.

Vaynerchuk said the three have the potential to be second- or third-round picks.

Both Toth and Reeves-Maybin have NFL combine invitations, and Kamara, an underclassman, is expected to receive one, McLaughlin said. Reeves-Maybin suffered a season-ending injury last October but had successful surgery, McLaughlin said. “We’re cautiously optimistic that he’ll be ready for the combine in February,” he said.
Website NFLDraftScout.com had Kamara rated No. 7 out of 221 running backs last week and had Toth ranked No. 5 out of 104 centers.

Vaynerchuk said the agency may add one or two more draft picks to its first class, but he is already more than pleased with the first year’s success. Representing NFL players is only step one.

“I fully intend to build the premier sports representation business in the world,” said Vaynerchuk, who is also a speaker and best-selling author. “I don’t get into something for kicks and giggles.”

Vaynerchuk said the next two sports he is eyeing for expansion are NBA and esports, but he would not give a time frame for future acquisitions. “I want to dig really deep into football,” he said.

> SES SIGNS RECORD-BREAKING KICKER: University of Idaho kicker and punter Austin Rehkow, who made national news when he kicked a 67-yard field goal in high school, has signed with Stellato Enhanced Sports for representation in the draft.

SES founder and agent Sean Stellato will represent Rehkow, who set the Washington state high school record when he kicked a 67-yard field goal for Central Valley High in Spokane, Wash. (The national high school record is 68 yards.)

The longest field goal in NFL history is 64 yards, set by the Detroit Lions’ Matt Prater on Dec. 8, 2013, when he was with the Denver Broncos.

Stellato said that Rehkow was heavily recruited by other agents and that he expects him to be drafted. He also averages 48 yards as a punter.

“His leg and consistency makes him a special player alone,” Stellato said. “Couple that with the fact that he can punt and kick makes him that much more intriguing. In today’s NFL, teams are looking for solid players and roster flexibility. He provides both and is a true hybrid.”

SES has also signed wide receiver Billy Brown from Division II Shepherd University.

> MDR SPORTS SIGNS MLB PLAYERS: MDR Sports has signed St. Louis Cardinals shortstop/third baseman Jhonny Peralta and Boston Red Sox catcher Christian Vazquez.

Melvin Roman, founder of Puerto Rico-based MDR, will represent Peralta and Vazquez.
Peralta was formerly represented by Independent Sports & Entertainment. Vazquez was formerly represented by Wasserman.

DAY
> OCTAGON SIGNS DAY: Octagon has signed 17-year-old tennis player Kayla Day for representation.

Agent Alex Sohaili will represent Day, who won the 2016 U.S. Open girls singles championship.

Day is turning professional at the Australian Open, and Octagon will work on getting her endorsements.

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

Peter Raskin has left TLA Worldwide and formed his own agency, Rubicon Talent.

Raskin, who was a partner at TLA, is one of six agents or executives who have left the firm in recent months. TLA declined comment on the departures.

Raskin confirmed that he has founded a talent agency and that Brandon Swibel was leaving TLA to join as a partner, but he declined further comment.

Swibel sent people in the industry an email last week saying he was departing TLA after 11 years for the opportunity to be a principal at Rubicon.

At TLA, Raskin and Swibel represented a variety of athletes for marketing work, including Olympians and NFL players.

Dave Maryles, another marketing agent at TLA, who counted Denver Broncos wide receiver Emmanuel Sanders and Tennessee Titans running back DeMarco Murray as off-the-field clients, has also left the firm. He declined comment for this story.

It’s not clear which clients, if any, will follow the agents to their new ventures. Athletes and other talent clients tend to stay or go with the agent with whom they have the closest relationship, but unlike playing contracts, some marketing contracts may have exclusivity terms.

Among other departures:

Michael McCarthy, who was TLA executive vice president of media, new business and events, joined the Milwaukee Bucks as chief operating officer in late November.

“My migration to the Bucks was organic as a result of consulting with them as a TLA executive for two years,” McCarthy said.

Jonathan Salant, who was TLA vice president of business development and talent marketing, also left the agency recently. Salant confirmed via email that he left in December and was weighing his options in regard to his next move.

Josh Pinkow, a marketing agent for athletes and chefs and broadcasters, left TLA in December. He said last week he took a job representing chefs at The Connect Group, a culinary marketing and talent marketing firm. “It was nothing negative at TLA,” Pinkow said. “An opportunity presented itself. This is me pursuing my passion in the culinary world.”

TLA was formed in January 2012 when MLB representation firm Legacy Sports Group merged with The Agency. Another TLA partner who like Raskin was a founder of The Agency — broadcasting, athlete marketing and coaches agent Jordan Bazant — left last summer to join WME.

Staff writer Ben Fischer contributed to this story.

Sports agency TLA Worldwide has hired former head of Lagardère tennis John Tobias, who is bringing with him several of his former clients, including Sloane Stephens and the doubles team the Bryan brothers.

Tobias is not charged with starting a tennis division for TLA, which specializes in baseball and golf, but instead will work as a senior vice president in the agency’s talent marketing group.

TOBIAS
“His skill set is not limited to tennis,” said Mike Principe, CEO of TLA.

Tobias worked with Principe at Blue Entertainment Sports Television until 2010, when it was sold to Lagardère. Principe soon after helped start TLA, while Tobias remained with Lagardère until 2015, building the practice into one of the top ones in sports. He was dismissed that year, leading to a mass exodus of the tennis talent.

His noncompete deal ended late last year, and he fielded several offers before choosing TLA.

In addition to Stephens, Tobias brings along ATP player Sam Querrey. Querrey and the Bryans were represented by PRP, an agency run by former Andre Agassi agent Perry Rogers. PRP also represents Eugenie Bouchard, and she is expected to join TLA as well.

Former ATP pro Mardy Fish is also making the move from PRP to TLA. Fish plays on the seniors tour and has broadcasting aspirations.

Tobias said he also wants to begin representing NFL players, either for marketing or also contracts. He has his NFLPA agent certification, which he secured while at Lagardère, he said.