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Volume 21 No. 26

Labor and Agents

A

year after branching into basketball and baseball, powerhouse NFL player representation firm Rosenhaus Sports is seeing some progress.

 

RSR Basketball has signed a projected first-round NBA draft pick, and RSR Baseball now has a client in the major leagues.

 

Shane Bieber, a right-handed pitcher who was drafted in the fourth round of the 2016 MLB draft by the Cleveland Indians, was called up for his major league debut last week. He is represented by RSR Baseball agents Dennis Wyrick and Barret Arthur.

 

Additionally, RSR Basketball is representing 19-year-old point guard Anfernee Simons, who did not attend college but trained at IMG Academy. The basketball press has called him a “mystery” prospect because he didn’t compete against other prospects in college. But some in the press have speculated that Simons could be a lottery pick and he was ranked No. 19 last week on the nbadraft.net mock draft.

 

“He has 24 scheduled workouts,” Drew Rosenhaus said. “He is a very hot prospect.”

 

NBA prospect Anfernee Simons skipped college to train at IMG Academy.
Photo: Getty Images

Rosenhaus and his brother Jason founded Rosenhaus Sports almost 30 years ago and represent 100 players in the NFL. They branched into baseball and basketball last year by hiring young agents in those sports with an eye toward building from the ground up.

 

Drew Rosenhaus said he is focused on the agency’s NFL player clients, while Jason is overseeing the new divisions.

 

“It is exciting that in the basketball division we have a potential lottery pick,” Rosenhaus said of Simons. “That is a big signing for us.”

 

He added that he’s pleased with both divisions.

 

“It’s nice to see production because when you start in a new business, it takes a little bit of time before you see the fruits of your labor,” Rosenhaus said. “And we are seeing it now.”

 

NCAA TRIAL SET FOR SEPT. 4: A trial that could strike down limits on what colleges can pay basketball and football players has been set to begin in Oakland the day after Labor Day.

 

Federal Judge Claudia Wilken has set Sept. 4 as the first day of a 10-day bench trial on the question of whether NCAA rules limiting the amounts paid to college football and basketball players violate federal antitrust law. The trial will be held Sept. 4-7, Sept. 17-21 and Sept. 24-25.

 

In a bench trial, there is no jury; instead, the trial is before the judge. Wilken is the same judge who ruled in favor of former student athletes in O’Bannon v. NCAA in 2014. In that case, she found that the NCAA violated antitrust law by not giving student athletes a share of revenue earned through the use of their name and likeness. This case challenges the NCAA’s limits on athletic scholarships.

 

“The players in D-I basketball and FBS football are delighted that they will soon be getting their day in court,” Jeffrey Kessler, co-lead counsel for the student-athlete plaintiffs, said in an email. “Their hope is that the anticompetitive, unfair and hypocritical set of rules which prevent them from sharing in the hundreds of millions of dollars in revenue that they generate will finally be struck down. Individual conferences and schools will then be able to make their own choices on how to fairly compensate these wonderful athletes.”

 

The NCAA declined to comment for this story.

 

The trial originally was scheduled for December of this year, but the NCAA asked for a change, citing conflicts with its lead counsel, Beth Wilkinson of Wilkinson Walsh + Eskovitz. The NCAA had asked for the trial to be postponed until sometime in 2019. But the student-athlete plaintiffs, who are represented by Kessler, a partner at Winston Strawn, and co-represented by Steve Berman of Hagens Berman Sobol Shapiro, opposed delaying the trial and asked for the trial to be moved up to late summer or early fall.

 

MONTAG SIGNS TERRY: The Montag Group has signed veteran NBA guard Jason Terry for broadcast work. TMG agent Gideon Cohen is representing him.

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

The NFL Players Association’s high-profile Fanatics deal delivered $20 million to the union in the most recent reporting year but also served to depress fees from companies like Nike that became sublicensees as part of the new apparel framework. Nike’s payment to the union, for example, fell 89 percent to $1.1 million. Overall the Fanatics contract is a net plus for the union’s bottom line.

The NFLPA signed the Fanatics deal in 2016 and last fall renewed with a host of what it is now calling sublicensees like Nike, Outerstuff and Dallas Cowboys Merchandising. The annual report the NFLPA filed with the Department of Labor last week, which covers the 12 months ended Feb. 28, 2018, is the first to reflect a full year under the new apparel arrangement in which Fanatics makes all the products for the sublicensees.

It mirrors deals Fanatics has struck with other unions such as the National Basketball Players Association and leagues like the NFL and the NHL, in which the licensee has taken over most retail categories and manufactures the products.

“It is an opportunity to consolidate under one vendor,” said Gene Goldberg, a former NFL licensing executive. “It is going to yield, in theory, an opportunity to generate more revenues.”

What it has certainly done for the NFLPA is to shift its reliance on a handful of retail firms to almost entirely Fanatics, a trend that should be even more pronounced moving forward. In the fiscal 2017 year, Nike, Outerstuff and the merchandise arm of the Cowboys delivered $17 million to the NFLPA. In the most recent filing for the fiscal 2018 year, the figure was $2.9 million and a good share of that came from marketing payments to players, not royalties. By contrast, of Fanatics’ $20 million, $18 million is guaranteed royalties.

Entities like Nike and Outerstuff still work with the union on apparel design and other matters, but most of the work, and thus payments, run through Fanatics.

Overall NFLPA commercial revenue rose slightly to $170 million, from $167 million, according to a review of the NFLPA’s last two annual reports. Both figures set new highs for the NFLPA commercial arm.

An emerging category is production services, a result of the union’s ACE Media, launched in 2015. The media outlet creates sports-related lifestyle content. In the most recent fiscal year, Amazon paid the NFLPA $1 million for production services from ACE. In all, production services and digital media delivered $2.5 million to the union, compared to just under $1 million the year before.

The union’s assets were $514.7 million on Feb. 28, according to the latest LM-2, resources the labor group is sure to grow before its current collective-bargaining agreement runs out in three years. When the last CBA expired in 2011, shortly before a lockout, the NFLPA had $311 million in assets.

Grigor Dimitrov, ranked No. 5 on the ATP Tour, signed with TLA Worldwide last week, the first significant men’s player the agency has landed since it entered the tennis business in 2017.

 

The move comes as another top player, fourth-ranked Marin Cilic, is expected to jump to CAA Sports, sources said.

 

While the two moves are not connected, it is notable that they are both switching to larger agencies, as the recent trend in tennis has been for players to join boutiques or start their own agency outright.

 

Grigor Dimitrov has won eight ATP titles.
Photo: Getty Images

In fact, until the end of last year Dimitrov was represented by Team8, the agency started by Roger Federer and his agent, Tony Godsick. Dimitrov became unhappy there, multiple sources said, because the focus largely revolved around the legendary Federer. Godsick did not return requests for comment.

 

The current top three ATP players — No. 1 Rafael Nadal, No. 2 Federer and No. 3 Alexander Zverev — are each represented by boutiques (Nadal, like Federer, has his own firm, and Zverev is repped by ACE Group International). The idea behind going with a smaller firm is that the players get more attention. However, that can come at the cost of the sales and marketing resources of a larger firm.

 

For TLA, the signing adds to a tennis client group that includes the Bryan brothers and Sloane Stephens, last year’s U.S. Open winner.

 

In fact, it was the endorsements TLA secured for Stephens months after she won the Open that impressed Dimitrov, said Chris McCormack, a TLA vice president of sports marketing.

 

“We have a big sales team to push him out,” McCormack said.

 

McCormack worked with Dimitrov at Team8 until May 2017, and his departure suggested the 27-year-old Bulgarian would move on when his contract expired. TLA hired McCormack two weeks ago as part of the planned


Dimitrov signing.

 

Dimitrov, who has won eight ATP titles and $15 million in prize money, wears Nike, a contract that expires later this year. He also has deals with Wilson, Rolex and Häagen-Dazs, among others. He would like car and financial services deals, McCormack said.

 

Cilic, 29, won the 2014 U.S. Open and has been managed his whole career by Vincent Stavaux. CAA is well known for repping players from team sports, so Cilic would represent a big signing. CAA did not reply for comment.