Business World How $ To Negotiate Great Deals

Sports Agents

Commonly, the terms ‘sports agent’, ‘player agent’, ‘sports or contract representative’ and ‘contract advisor’ are used interchangeably ( Each term, whether identifying a lawyer or a non-lawyer, depicts a delegate who performs basically the same service ( It is the duty of these professionals to represent, counsel, advise and assist a professional athlete in the negotiation, execution and enforcement of the player’s contract ( As of April 1993, two hundred seventy three major league baseball players earned a salary of one million dollars or more and agents usually receive four percent of the player’s salary as their fee ( This has caused a dramatic growth in the number of persons desiring to represent athletes (

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There are countless definitions of athlete representatives, but the bottom line is this, to be a good sports lawyer, one must first be a good lawyer ( A sports lawyer is frequently a business or corporate lawyer who adds the zealous ingredient of sports law to the lawyer’s area of expertise ( Sports law is an astonishing combination of many legal specialties ( Contract negotiations is one particularly prominent and profitable subset of sports law ( Some sports lawyers specialize in negotiating contracts in the interest of a player, while others may represent a team in player contract negotiations ( The services granted by law firms that are primarily involved in contract negotiation vary greatly in range ( These services extend from the singular act of negotiating a contract to a full-range package involving negotiating, legal counseling, securing endorsements, financial planning, career planning and counseling, marketing the athlete and resolving disputes over employment contracts (

Becoming a Respected Player Agent — What Does It Take?

The key to being a highly regarded player agent is to ascertain the client’s best interests and to endeavor to achieve those objectives ( There are numerous factors, which determine an agent’s distinction: integrity, background, experience, expertise and preparation ( Even though it is not a requirement for an agent to also be an attorney, the athlete would be best served (and generally is) by an attorney-agent because of the added security of the attorney’s code of professional responsibility ( Also, the professional athlete is better served by an agent who upholds a low public profile, rather than by an agent with a reputation for confrontational, public negotiation or by an agent with a reputed as causing clients to miss preseason training ( This is not to lessen the substantial value of favorable publicity, for there are some successful confrontational agents ( There are, however, hazards to negotiating in the media, rather than directly with the team ( For example, a marginal player in danger of losing a job, might be placed in particular danger by a confrontational agent ( Additionally, a team faced with a choice between ten players of comparable ability who are competing for two or three slots may lean toward those with less confrontational agents ( It is very easy for management to decide to keep players represented by a low-profile agent rather than those represented by a confrontational agent (

Registration and Certification Requirements

Registration with or certification by the various players’ unions is a prerequisite to entering the field of representation ( Certification may not be granted if the agent cannot be reasonably expected to perform the responsibilities of representation ( The unions mandate that all agents attend annual seminars on current updates relevant to the agent’s duties ( A benefit that certified agents enjoy is that they have access to the valuable salary information of union members, as well as access to the scouting information on college seniors (

An athlete’s representative may have to register, pay a registration fee and post a bond. This can be expensive, as posting bonds of up to $100,000 in various states requires substantial resources ( A representative should carefully ponder the number of states in which to register balancing the facts that registering in too few states will result in limiting the states in which the representative can work, while registering in too many may place an undue financial burden on the representative (

Contract Negotiations

There is no sure-fire proven method to successfully negotiate a contract because each negotiation varies in particulars and in contexts ( However, there are three vital characteristics, which are shared by successful negotiators ( First, the representative must be fully conversant about the negotiations. Second, the representative must determine the client’s needs and objectives ( Third, the representative must select an effective strategy and negotiate industrious to achieve the client’s goals ( It is often easier to negotiate a sports contract than most other contracts because there is extended data available to the negotiator ( This information is accessible from a number of sources including the union, other players and agents, the media and from the team ( Such information will include salary data, which is compared by tenure and position and players’ statistics ( The agent must assimilate and integrate the information from these sources to understand the sport and its organizational structure ( Familiarity with the basics of the particular sport in question is also essential ( The agent must be familiar with the teams, the players, the injury propensities of the players, the minor league prospects, the attitude of the drafting team’s fans surrounding the desire to sign a blue chip player, the economic state of the teams and the teams’ requirements ( Moreover, the agent needs many levels of knowledge concerning a variety of league and NCAA governing documents, regulations and operating manuals (

Despite the quantity of information available to the representative, the most important data does not come from the written page ( The representative must become familiar with the athlete’s needs, objectives in life and economic discretion or extravagance from the athlete him or herself ( The representative’s first priority is the athlete’s economic needs as it is commonly the client’s most urgent worry ( For example, if the client requires money promptly, the agent may endeavor to negotiate a large signing bonus or a front-loaded contract ( If the player is either injury-prone or older, there is incentive for the representative to seek a guaranteed or a no-cut, long-term contract with injury insurance ( The agent should be conscious of the fact that guaranteed contracts are extremely rare in the NFL, but somewhat common in the NBA ( The agent must also reflect on the use of incentives, particularly in light of the player’s physical and psychological ability to meet those goals ( Finally, the agent must cautiously consider the effective marketing of the athlete, particularly in the area of endorsements (

Despite the abundant information available, the agent must understand the art of negotiation in order to be an effective representative ( An agent should understand how to support a player’s salary objective with statistical and other relevant data to “package” a planned contract and classify not only the needs and objectives of the player, but also the tax implications of a successful negotiation ( A keen agent will recognize the impact of those needs and objectives on management, on the tax strategy of the owners and on the other players ( The hallmark of a successful agent is designing contracts that conciliate the needs of both parties ( That kind of business vision can expeditiously build substantial respect for the agent by management and players (

One of the first commandments of being a sports agent is, ‘Thou Shalt Communicate with Thy Client’ ( A sports agent must endeavor to formulate a merited reputation for credibility and integrity ( A reputation for credibility and integrity may arise through friendship, personal contacts or by recommendation from players, management or coaches ( Further, a representative’s reputation may arise by virtue of knowing reliable people in the sports field ( A sports lawyer must learn how to keep clients content and informed ( Communication is, therefore, very of the utmost essence. Further, treating each player/client, as a respected and intelligent individual is also important ( While some player-clients may be very smart and sophisticated, others may be poorly educated and inexperienced. However, all clients deserve respectful treatment ( Informing clients as to the particulars of their contract is also important, as some players may not fully understand some of the standard provisions of the contract ( Without appropriate communication the representative-client relationship is at risk, with the client suffering the adverse consequences ( An ever-growing number of states are regulating agents in contract negotiation ( An issue raised by these statutes is whether they are unconstitutional and whether proposed federal laws will constitutionally preempt the field (

How To Enter Into the Field of Sports Agent frequently asked question is how does a lawyer become involved in the field of sports law and athlete representation ( A variety of firm or individual contacts may offer inroads into the field ( Connections arise from a number of sources, including representing parents of players, representing unions and representing team doctors ( Lawyers may also represent persons holding an equity interest in the ownership of a team ( There are innumerable ways to become involved either primarily or incidentally in sports law matters ( Sports law is a broad legal discipline ( Lawyers and agents desiring to enter the field must know they face intense and sometimes unprincipled competition (

Fledgling sports representatives will likely have to augment their income with other legal work that will provide regular income unless and until the agent contracts with several successful clients ( A customary method of obtaining clients is by using personal contacts, friends and other athletes to meet professional athletes ( The more sports figures you know, meet and represent, the better the chance of engaging some as clients ( Knowing college coaches is an obviously beneficial way to obtain clients ( Success and good publicity also broaden avenues of opportunity for sports lawyers (

The best way to obtain clients is by developing a reputation for integrity, diligence and availability, fostered by satisfied clients who provide favorable recommendations to others ( Most important, however, is the acquisition of the first client ( If the first client is pleased with the lawyer’s service, that client can in good conscience recommend the lawyer to colleagues in the sports industry ( Remembering the principle that preparation is the most significant element in player representation can save a sports lawyer’s practice ( A negative recommendation from a player can be very harmful ( Therefore, it is important to represent the first client diligently and to keep the client informed ( The process for retaining sports clients is not all that different from standard legal practice ( However, in the field of player representation, a client expects the lawyer to be radically available ( The urgency of obtaining or retaining clients and the intense competition may pressure the lawyer to violate NCAA regulations, fiduciary obligations, ethical standards and a number of state sports laws. However no amount of pressure can excuse a breach of a lawyer’s code or the law (

Prospective sports lawyers may track one of several career paths ( One course is to be hired by a law firm often involved with sports law ( Another avenue is to be engaged by a player-agent firm, or by an individual agent, whether the agent is a lawyer or non-lawyer ( The office of the university’s general counsel, the union’s office, the team’s office and the league and commissioner’s offices are other possible leads for employment ( A young lawyer should become an expert in a particular area to expand the lawyer’s value to the employer ( He should devour reading material on negotiation techniques, the sport and its players ( A sports lawyer should also become familiar with the organizational structure of the Canadian and American minor leagues and the European and Japanese professional leagues as an option to an unsatisfactory drafting team or an inadequate salary offer ( In the area of professional basketball and now professional football, a thorough knowledge of the salary cap and the options for players not able to survive the “cut” is essential ( Further, a sports lawyer must master the special tax ramifications of foreign income and potential irresponsible conduct by the foreign team’s management ( The objective for an aspiring sports agent is to become as informed as is possible (

Future Direction and Developments in the Field

In conclusion, the sports law field requires the competence of a first-rate lawyer, expertise in a variety of disciplines, and knowledge of the various remedies applicable in a sports context ( Ample room in the field of sports law and in the field of player contract representation exists for diligent, ethical lawyers ( However, sports law will undergo engaging and interesting changes in the years to come ( Professional sports are undergoing a transformation, as the nature and economics of the games change (

The outcome of this shift is uncertain ( It is unclear how profitable professional sports are in current economic conditions or in the future ( Current evidence surrounding this issue is inconsistent ( For example, recent NFL antitrust cases describe a multi-million dollar salary payment to one owner while significantly underestimated profitability for some teams ( Additionally, the evidence also shows that a number of franchises are losing money based on fair accounting evaluations (Macnow, 1992) while on the other hand, the recent sales of the Baltimore and San Francisco baseball teams, the record breaking sale of the Philadelphia Eagles and the competition for new franchises despite their cost, reflect that significant value still exist in sports franchises (

Regardless, players and agents should still concern themselves with recent trends and events in the professional sports industry ( For example, there has been a growing trend among sports agents to limit their representation activities to one sport or one type of athlete (

Other trends such as the enormous increase in salaries, free agency, labor stoppages, and the rapidly emerging limits on TV revenues, ticket prices, sky boxes and other revenue constitute significant considerations for NFL players and their agents ( Further, the growing unavailability of municipal funds for stadium or arena improvements and construction, and the increasing use of deferred compensation, (kelly, Vogel, 1990) should act as both a warning for players and an area of grave concern for agents ( Furthermore, teams from small cities have made broad use of deferred compensation as a means of competing with the salaries offered by teams situated in large cities ( The amount of deferred compensation combined with the financial difficulties of some teams has reached notable heights ( Accordingly, a player’s representative must consider seeking the personal guarantees of financially reliable owners and the use of escrow for the player/client’s full compensation when representing blue chip players ( These concerns aside, sports law is still a fascinating and ego-sustaining field offering great opportunities and even greater rewards (

Advice From A Sports Agent Working In the Field: Interview Excerpt

Q: What distinguishes Steinberg’s sports-representation practice?


Negotiations are a part of everyday life and they need to be handled with a clear focus and a principled philosophy. The goal is not to destroy the other side. The goal is to find the most profitable way to complete a deal that works for both sides. I insist that my clients look at their negotiations, and at their athletic careers, not just as tests of talent but as tests of character as well. I also encourages them to “give back” part of their huge paychecks to their community — by establishing foundations or by contributing to causes (

Q: Is there an art to effective negotiation?

A: Everyone Is a Negotiator. We’re always negotiating, every day of our lives and in every kind of situation — whether it’s a boyfriend and girlfriend deciding which movie to see, a husband and wife deciding which city to live in, a customer looking to buy an automobile, or an employee trying to get a raise. We all negotiate. But many of us still have a fundamental fear of negotiation. That fear can make us act meek and obsequious — which means that we’re likely to end up with our goals unmet. Or it can make us behave aggressively and angrily — which could break down the discussion altogether. Anybody can learn to negotiate. There is no magic. What you need is an understanding of human psychology and an open mind. You need to be able to listen and to have respect for the other person in the negotiation. You don’t need to be the stereotypical tough guy. You need to look at negotiations as a process that can be exciting, as an opportunity to improve your condition or to enhance your situation, rather than as a terrifying confrontation (

Q: How do you Deal with Deadlock?

A: There is an absolutely predictable point in all negotiations when you appear to be deadlocked. And the question arises: Now what? First, when you’re preparing to negotiate, you should assume that this moment would come sooner or later. When it does, don’t be surprised, and don’t get frustrated. Simply assume that in any negotiation process, a schism, a chasm, a seemingly unsolvable problem will occur. Second, the key to getting through that situation is emotional resilience. You have to face the seemingly impossible deadlock, and then step back — for five minutes, for an hour, or for a couple of days. It could involve simply taking a short break, going for a walk, or moving away from the point that’s produced the deadlock, or it could involve shifting to a new setting and changing the context of the negotiation. When you and the other party get back together, you’ll both return with new and creative ways to solve the problem. Both sides can use the break to refocus on the value that they offer each other. They can stop focusing on the specific issue that they’re deadlocked over and instead start focusing on the valuable end point of the negotiation: Someone will have a job that he loves, and someone will have an employee whom he will treasure. The goal should be to get back to the original purpose of the negotiation (

Q: Any advice on Closing a Deal?

A: There are a few things to keep in mind about closing a deal. Most people — especially on the employer side — will have concessions that they’re willing to offer to get the deal done. So the concept of “if it will make the deal” is always worth keeping in mind. One way of doing a deal can be first to agree on a general framework that’s still somewhat sketchy, and then to work out the rest of the deal — because at that point, conflict has been replaced by partnership, and both sides have dropped their defenses.

But you can’t allow the feeling of exultation, or of relief that the process is almost done, to dull your senses. There are critical points at the end that need to be negotiated and documented. That’s when you should draw on your mental discipline: You shouldn’t be concerned with what time the last flight leaves. You shouldn’t start thinking of what it would be like to surprise your wife by being home half a day early. You must remain focused until the very end. This is another part of negotiating that you need to anticipate: As a deal comes to a close, there will again be seemingly unsolvable problems. One side or the other is very likely to look at some part of the deal and say, “If that’s what you meant, then the whole deal is off.” At that point, it’s important for you to provide motivation. You may need to buck up people on the other side, to encourage them to stay with the process — “Look, we’re almost done. This always happens at this stage” — because at the very last minute, charges of bad faith can surface. You started with wariness, but then you worked through it to achieve what you think is a partnership, and now, as both sides let their guards down, something arises that seems to threaten the whole deal. As hard as it may be, that’s the time for you to stay rational (


Bullets Sign Gugliotta.” USA Today. 20 Oct. 1992: C5.

Garbarino, Robert. “So You Want To Be A Sports Lawyer, Or Is It A Player Agent, Player Representative, Sports

Agent, Contract Advisor, Family Advisor or Contract Representative?” Villanova Sports & Entertainment

Law Journal. 1994. Villanova University. 29 Nov. 2002.

Kelly, Kevin & Vogel, Todd. “The NBA Is Paying out Like There’s No Tomorrow.” Business Week. 5 Feb. 1990:

Macnow, Glen. “1990 Was a Good Year for Braman’s Eagles.” Philadelphia Inquirer, 19 Aug. 1992: C5.

Webber, Alan. “How to Get Them to Show You the Money Leigh Steinberg, The Most Powerful Agent in Sports,

Tells Free Agents In The Business World How To Negotiate Great Deals – And How To Deal With Their

Fear Of Negotiation.” Fast Company. 1998. FC. 29 Nov. 2002.

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