With a career as a sports agent, you can make excellent money. Typically, he or she receives a percentage of an athlete’s deals, with the percentage varying based on the type of deal negotiated. Two of the major sports leagues, the NFL and the NBA, have fee regulations as dictated by their player associations, at 3% and 4% respectively. MLB and the NHL do not command a limit on agent commissions. Experts estimate that MLB agents earn between 3% and 5% on contract negotiations. What does this mean in actual dollars? USA Today approximates the 2008 league payroll at $2.6 billion, up from $2.2 billion in 2005. At 3% commission, baseball agents collectively made over $74 million – and that’s just a low estimate! What’s more, this figure represents a 60% increase over estimated agent earnings in 2000.
While player contract commissions tend to be at the lower end, endorsements earn the agent a much higher cut. Endorsement contracts are more work for the agent because there is a greater amount of marketing, prospecting, and negotiating involved. With differing opinions on a player’s marketability, the agent has to work as a promotional expert, communicating his or her client’s ability to sell products. The commission range is anywhere from 3% to 20%, with most sports agents earning an average of 10%. Many marquee athletes have the potential to make more money in endorsements than from their playing contract. This is especially true in the NFL and NBA where salary caps are in play. In his hometown of Akron, Ohio, the Beacon Journal reports that LeBron James’ contract extension with the Cleveland Cavaliers in July 2006 for $60 million over three years, is dwarfed by over 100% by his current endorsement deals worth $130 million. Clearly, an agent with high revenue clients can enjoy a very lucrative lifestyle.
On the flip side, the majority of agents earn a modest living, often splitting time between athlete representation and a second profession. Common professions include law, accountancy, marketing, and financial planning. Pat Linden, an experienced agent and lawyer with clients in the NFL and professional skiing, and current general counsel of the National Pro Fastpitch women’s softball league, is the perfect example of a working agent who makes his living in multiple facets. In a recent interview, he points to the NFL’s 3% commission and the fact that most players only make the league minimum as limiting factors:
So, if you figure a $500,000 minimum salary (would be the minimum for an NFL player, for example, with about 3-4 years NFL playing experience) or $275,000 minimum for rookies, you would only get $15,000 for each year of the contract (most are not guaranteed contracts), or $8,250 in the case of a rookie. As you can see, you would have to have a voluminous number of clients to make a full-time living off of football representation alone.
Linden’s example helps to paint a realistic picture of sports agency careers. Adding to the reality check, former agent, Kevin Rainge, cites industry statistics that estimate up to 60% of registered NFL agents do not have a single client. As an aspiring agent, it is important that you understand these realities. For every Leigh Steinberg and Scott Boras, there are hundreds of agents who work incredibly hard to maintain a small handful of clients, earning a very respectable living without the fame and notoriety.
SPORTS AGENT SALARY INFORMATION