Do the math: Agencies negotiate $2.3 billion in NBA free agency deals
Priority Sports & Entertainment, fueled by its heavily sought-after client Gordon Hayward, has been the big winner in this year’s NBA free agency, leading all agencies in the total dollars negotiated so far this summer.
Eleven agencies negotiated 71 deals with a total value of about $2.3 billion since free agency started July 1, according to SportsBusiness Journal research (see chart). Chicago-based Priority led the pack with $354.6 million negotiated for nine different players.
|The Celtics gave Gordon Hayward a four-year, $128 million deal to leave the Jazz.
“It was a gut-wrenching decision for him on what to do,” he said. “But ultimately you can only pick one team and you put so much into trying to do the right thing for himself and his family.”
Priority was followed by Landmark Sports, a firm founded by former agent and now Los Angeles Lakers general manager Rob Pelinka and Brandon Rosenthal, in the rankings of total dollars negotiated. Landmark negotiated only three contracts, but one was a mega-deal — guard James Harden’s four-year, record $228 million extension to stay with the Houston Rockets. Since joining the Lakers, Pelinka is no longer associated with the agency.
Excel Sports Management ranked third with 13 deals valued at $267 million, headed up by forward Blake Griffin’s five-year, $171 million extension with the Los Angeles Clippers.
ASM Sports was fourth, with $235.5 million in contracts for six players, including guard Kyle Lowry’s three-year, $100 million deal to return to the Toronto Raptors.
Rounding out the top five is Octagon with five deals worth $228.3 million, the pivotal one being guard Stephen Curry’s five-year, $201 million deal to remain with the Golden State Warriors, the designated player maximum.
Specific commissions for the agencies could not be determined, but the maximum fee NBA agents may charge on any contract is 4 percent of the contract value, under National Basketball Players Association regulations. So, agencies charging 4 percent would receive $4 million commission on a $100 million contract.
Free agency is not over and more deals could get done and change the totals.
“Most of the players who will begin the season on final NBA rosters have been signed except for restricted free agents,” said Christopher Reina, executive editor of RealGM, a website that tracks free agency in the NBA and other sports. “There are seldom any signings of consequence by the middle of August until the start of training camp in late September with the exception of restricted free agents.”
He declined to share RealGM’s estimate of the total dollars spent in this year’s free agent market. ESPN reported the total dollar volume of about $3 billion, down from $5 billion last year. Some agents blamed the salary cap, which came in at $99 million, which was lower than expected and a much smaller increase than last summer’s massive $24 million bump, which came as a result of the NBA’s new media deals taking effect.
“There was a large spike last year,” said veteran NBA agent David Falk, founder and owner of FAME. “Some teams treated last year like the Oklahoma Land Rush. There were a lot of very, very average players, a lot of backup players, that signed deals that were not only grossly over-priced, but very, very long.”
Evidence of the dynamic market is young agent Jason Glushon, who launched Glushon Sports Management just last year. This summer, his agency negotiated three deals for a total value of $160.4 million, including guard Jrue Holiday’s five-year, $126 million max extension with the New Orleans Pelicans, that could be worth $150 million if certain incentive targets are met. Glushon is the eighth-ranked agency by total contract value.
Glushon noted the different marketplace, as last year, he represented one client, forward/center Al Horford, who moved from the Hawks to the Celtics in a four-year deal valued at $113 million, cashing in on the flush free agent market. This year, while he had more players, it was softer.
“Last year there was so much money that teams had to spend that Horford had the choice of so many options at the maximum,” Glushon said. “This year, while there are a lot of teams in need of a point guard, the market changed rapidly.”