The sports agency business is booming as ever-increasing media rights deals continue to pour profits into professional sports leagues, raising salaries and making seven-figure athlete contracts the norm. The firms featured in Forbes’ 2018 ranking of the World's Most Valuable Sports Agencies have negotiated a collective $45.7 billion in current professional athlete contracts, netting more than $2.35 billion in commissions, an increase of almost 10% over last year.
Leading the way for the sixth consecutive year is Los Angeles based Creative Artists Agency (CAA), whose $9.3 billion in contracts under management is more than double its next closest competitor. With a $900 million uptick in deals over the last year, the agency now stands to earn $348 million in commissions from its clients — a $30 million increase from 2017. Perhaps more impressively is the rise of CAA's individual practice areas: the agency's football ($4.1 billion), basketball ($2.3 billion) and hockey ($1.9 billion) divisions rank No. 1, and its baseball ($1 billion) division ranks No. 3. CAA's football division by itself would be the fifth most valuable agency in the world.
CAA once again lands 11 agents on the World’s Most Powerful Sports Agents list, including three in the top 11: No. 9 Pat Brisson (hockey), No. 10 Todd France and No. 11 Tom Condon (football). Among CAA's biggest deals include Robinson Cano's $240 million deal with the Seattle Mariners, Karl Anthony Town's $187 million deal with the Minnesota Timberwolves, Matt Ryan's $150 million deal with the Atlanta Falcons, and Sidney Crosby's $104 million deal with the Pittsburgh Penguins. In total, CAA has sixteen clients signed to contracts worth more than $100 million.
Moving up to the No. 2 most valuable agency this year is
Wasserman lands five agents on this year's World’s Most Powerful Sports Agents list, including No. 12 Joel Wolfe and No. 18 Adam Katz (baseball), No. 29 Thad Foucher and #46 Darren Matsubara (basketball), and #42 Doug Hendrickson (football). Among the agency's top deals are Giancarlo Stanton's massive $325 million contract with the New York Yankees (the largest deal in all of professional sports), Russell Westbrook's $233 million contract with the Oklahoma City Thunder, and Andrew Luck's $124 million dollar contract with the Indianapolis Colts. Wasserman also expanded its soccer division with the purchase of European agency Mondial Promotion, giving it the strongest soccer division of any multi-sport agency in the world. Likewise, it has increased its hockey practice by acquiring equity in No. 31
Moving down a spot to No. 3 on this year's list is
This year's top 10 includes an equal split between large conglomerated multi-sport agencies like No. 4
There are three new agencies in this year's rankings: No. 19 YouFirst Sports, No. 33 Key Sports Management and No. 40 Tandem Sports + Entertainment. YouFirst Sports, a European soccer agency, acquired the remnants of ASM, the agency which came under scrutiny during the FBI's investigation into college basketball corruption. One of the biggest climbers in this year's agency rankings is
The 41 agencies featured in this year's rankings represent more than 3,600 clients, which equates to some 60% of all professional athletes in the four major US sports leagues (NFL, MLB, NHL, NBA). In fact, the five largest conglomerated sports agencies in the world (CAA, Wasserman,
Methodology:
The valuations in these rankings were compiled through extensive research into the client rosters and contracts negotiated by each agency in the team sports of basketball, football, baseball, hockey and soccer. The total contract value under management for each sport was then multiplied by the maximum agent commission (or average where no maximum exists) as allowed by each respective players’ association. Such rates are as follows: NFL (3%), NHL (4%), NBA (4%), MLB (5%), FIFA (10%). Thus, agencies are ranked in order of the maximum commissions obtainable from the negotiated contracts, instead of the total value of the contracts. In tennis and golf, sports agents do not make commissions from their client’s on-court/course earnings, but only from the marketing dollars they help generate, for which they receive an average of 20%.
While agencies also earn income from negotiating marketing and endorsement contracts for their clients in the big five sports, the overall value derived from any such deals is negligible for the average player. While no concrete data exists, Forbes estimates that average professional athlete may make an additional 1% to 2% of their overall player contract in endorsement earnings, and their agents earn just 20% to 25% of that.
Full Coverage: World’s Most Powerful Sports Agents and World’s Most Valuable Sports Agencies
Jason Belzer is Founder of GAME, Inc. and a Professor of Organizational Behavior and Strategy at Rutgers University. Follow him on Twitter @JasonBelzer.