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A celebrity is someone who can be easily recognized in the society. A celebrity is often referred to as a "celeb" in popular culture. In a layman's language, a celebrity is an individual who generates significant mass and media attention through events in his/her personal and professional life. There are a number of ways in which people may become celebrities - their profession, personal and social interactions, media appearances, accidental and infamous behavior. Celebrities come from every walk of life. Most noteworthy of them are professional sportsmen through national and international representation, cinema and the entertainment industry personalities, fashion designers and models, politicians, the corporate honchos, literary and creative geniuses, humanitarians and national TV and radio personalities.
When an individual/group becomes a celebrity in a very short period of time, the expression often associated with them is "Instant Celebrity". On the basis of the attention generated by the celebrity, the gossip tabloids categorize each one of them as A-Lister, B-Lister and so on in the decreasing order of their reach. It has often been the case that a celebrity who is globally a B-Lister or C-Lister might actually be a Superstar in his home country. The cases of cricketers from Bangladesh and Zimbabwe and Scandinavian politicians along with Latin actors fit the case in question. Whereas, some celebrities possess equal reach throughout the globe such as Angelina Jolie-Brad Pitt, J.K.Rowling, Sachin Tendulkar and Barack Obama. Hence, celebrity management is of the essence and more so in sports as they speak a universal language of entertainment and emotion.
Sports Agents and agencies
Sports are often described as competitive and organized physical activities where the winner is decided on a set of pre defined criteria. However, it is the roller coaster of emotions an individual undergoes during the course of the sport, as a participant and as a spectator that truly gives sports a global appeal. And the sportsmen who possess a talent almost magical can leave the spectators enthralled and in a state of trance. A whole host of sportsmen coming from different countries can be considered as celebrities and in order to allow them to focus on their skill and to truly master it, sports management firms take care of them financially and on the media front. It is only when a professional sportsman concentrates solely on his craft can he truly master it. Sports management firms look after these needs.
What do they Do
Sports Agents work for sports personalities. They negotiate the most beneficial contract for the player with the player's employers and also generate substantial publicity and create a brand out of a player. Some agents and agencies extend their services from career management to managing the client's finances, investments and tax filings.
Top professional athletes and sports personalities have sports agents who represent their interests when negotiating contracts and business deals. The professional sports arena is a glamorous and lucrative one. A sportsman's career in professional sports can be short. So it is imperative to have a representative who knows the legal and business side of the sports industry and who can negotiate contract details and publicity/marketing activities in a manner that will be most beneficial for his client. Sports agents not only negotiate the highest salary possible but also try to arrange for the best playing and living environment and other additional perks. Regular sports contracts clearly state the duration of the contract, compensation, performance standards, personal conduct, injury provisions, and termination details. Bonuses, sports equipment, and travel gear are other perks that are frequently negotiated into the contracts. Players' unions provide some standard draft contracts that clearly state some of the terms and conditions to be considered in contractual negotiations between agents and athletes. Sports Management Agencies recognises the true value of each client and does its best to bring out the best in the prodigy on a regular basis.
Many sports agents have a 4-year college degree in Law or Business. A lot have an undergraduate degree in sports management, sports administration, or sport and recreation management. There are more about 200 colleges and universities that offer undergraduate and graduate degrees in sports administration and management. Almost all of these programs offer internships that turns out to be a valuable source of experience and developments in the field. Students may also major in business, marketing, public relations, finance, or accounting. Some sports agents benefit just as much from the contacts they make while involved in college athletics as they do from their academic activities and projects.
Services offered by sports agents and agencies
Scouting: Sports agents invest a lot of their time scouting talent. A lot of sports agents are former professional sportsmen who were active in college sports or who were in the professional ranks. This phase of professional sports help such agents in acquiring a good understanding of the game and in developing valuable contacts that help them in locating genuine prodigies and sports talent.
Selective pursuit of clients is recommended. There are instances when agents invest a lot of their time and money in a sportsman that is not a genuine talent or a sporting talent goes on and signs off with another agent. The best talent comes at a premium and the best sporting personalities need to be looked after with respect to their air fare, meals and accommodation and entertainment even during the wooing stage.
Contractual Agreements: Sports Agents represent their clients in contract matters and ensure that the terms and specifications made in the contract are upheld. They represent the client's best interests and benefits in cases of disputes with team management and the client's employers.
A specimen of the player's contract as drafted by Globe Sports Management Inc. With FIBA is given below.
FIBAÂ PLAYER-AGENT CONTRACT
This contract is made and entered into â€¦., 2008, by and between Globe Sports Management Inc. residing at 840 Bergen Avenue in New Jersey, USA, represented by its president in Europe and licensed FIBA agent Maarten Herman van Gent, residing at Sõpruse Pst. 222-59, 13412, Tallinn, Estonia (hereinafter mentioned "Manager")
__________________________, (Who will be referred to as the "PLAYER").
In considerations of the mutual, agreements and undertakings between the parties hereto, agree as follows:
This Contract is based on a master agreement provided by FIBA (Federation Internationals de Basketball) pursuant to FIBA's Internal Regulations governing Players Agents.
1. SERVICES RENDERED
Player hereby appoints the Agent as his exclusive Agent and representative of the term of this contractÂ when dealing with with negotiations of the player's contract with an organisation that manages and runs professional sport teams (will be referred as "Club").
The Sports Agent agrees to use his skills to acquire the most lucrative deal for Player.Â
The Parties agree that their relationship under this contract, in particular their respective rights and duties shall be governed by the FIBA Internal Regulations governing Players Agents (will be referred as the "FIBA Agent Regulations") as modified from time to time; the current version of these Regulations is attached hereto.
In particular, the parties agree to be entitled to and bound by the respective rights and duties provided for in the FIBA Agent Regulations.
Globe Sports Management Inc. ___________________
2. AGENT FEE
a. The Agent shall receive a fee of 10 % of the total salary of the player for his negotiation and deal making efforts.
b. All costs that the agent has to make should be in accordance to the negotiations and agreed upon before with the player in writing.
c. The payment of all fees for services rendered by the agent are payable in accordance with the following:
3. METHOD OF COMPENSATION
The agent will have the right to receive all payments directly from the Club and to deduct its fee, before paying over the leftover amount to the Player and the Player hereby authorises the Club to make the payment directly to the agent, hereby appointing the agent the Player's law consultant to receive and receipt for such payments.
If the Player receives promptly payments from the Club, the Player will remit to the agent the compensation provided for in paragraph 2a of this agreement.
c) If an individual other than agent carries out the services that would understandably be handled by the agent under this agreement, without the prior written approval of the agent, the agent shall be at liberty to receive the compensation provided for in paragraph 2a. If the player negotiates with the organisation directly, than the player is obliged to pay the fee to the manager as stipulated in article 2a.
4. PLAYER'S SPECIAL TALENTS
The Player accepts that he possesses unique and exceptional talents, and that if he were to provide services under any establishment, or the player himself, other than that of the agent, the agent would experience irreversible damage. Accordingly, the agent shall have the right to a restriction, in addition to the other rights it may have due to the breach of this contractual agreements.
5. NO OTHER MANAGEMENT ARRANGEMENTS
The Player understands that he has the right to enter into and perform pursuant to this accord and that he is forbidden from doing so by any other agreement or arrangement.
Globe Sports Management Inc _________________
6. The Manager will render services to the other professional athletes, some of whom may compete with the Player. The Manager is not obliged to render exclusive services to the Player.
7. DURATION OF AGREEMENT
This professional union shall be in effect for duration of two (2) years from the date here stated. After the completion of the stated period, the arrangement shall continue on a yearly basis, unless it is terminated by either party on sixty- (60) day's prior written notice.
Any dispute arising from or related to the present contract shall be submitted to the FIBA Arbitral Tribunal (FAT) in Geneva, Switzerland and shall be resolved definitely in accordance with the FAT Arbitration Rules. The arbitrator shall decide the dispute ex aequo et bono. Awards of the FAT can be appealed to the Court of Arbitration for Sport (CAS), Lausanne, Switzerland.
a. If any of this provision of this agreement shall be invalid, the remainder of the agreement shall continue to remain in effect.
b. This agreement shall be the entire agreement between the parties regarding the subject matter hereof, any representations, warranties or conditions not expressly incorporated herein shall not be binding upon either party.
c. This agreement shall supersede all prior understandings, agreements and contracts and contains the entire agreement between the parties.
d. No oral agreement is binding upon the parties.
Both parties agree to use the English language for this agreement
Â THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE EXECUTED AND SET THEIR HANDS AND SEALS ON the â€¦ th Day of â€¦. 2008.
Signature: Globe Sports Management Inc.Â ________________Â Â
The PlayerÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â ________________
As stated in the contract given above, the manager acquires a fee for his negotiation services and is liable to receive it directly from the club. In most sports, the fee varies to about 3-5% of the contract fees with the club. However, the percentage goes up significantly when the deals made are for the player to be associated to a particular brand of product and service (Celebrity-Brand Associations). However, player contract managements are the most common service performed by Sports Agents. Some sports agents work independently while most of the others work for reputed agencies. A manager performs most of the functions that a sports agent performs and a fine line of services divides the two.
Celebrity-Brand Associations: Celebrity endorsement is widely considered to be one of the most popular tools of advertising and brand building in recent times. It has become a fast paced trend and assumed as a sure shot win for product marketing. Choosing a celebrity is easy but it is difficult to establish a strong association between the product and the endorser. Most sports agents use their contacts and negotiate endorsement vistas and contractual agreements for their clients. Sportsmen promote sports and fitness equipments and gadgets, apparels, footwear, consumer products and eatables, beverages and energy drinks, cars and bikes, and many other products. The endorsement contract may require the sports celebrity to sign autographs and make public appearances. Popular athletes, such as Michael Jordan and Tiger Woods, may earn hundreds of thousands of dollars a year in commercial endorsements. Sports agents work to see that the media notices their clients and promotes them in the right light. Sports agents arrange for local and national interviews and try to garner positive exposure on television and radio. This exposure brings the athlete into the public eye. A popular athlete is in a better position when it comes time to negotiate a contract with the team or league. Positive media exposure also paves the way for future lucrative endorsement opportunities. In our own backyard, Mahendra Singh Dhoni (Indian Cricket Captain) is every brand's favourite as far as endorsements are concerned. With endorsement revenues topping Rs. 80 Crore he is the firm favourite toppling Sachin Tendulkar and Bollywood Superstar Shah Rukh Khan. One of the main reasons for Sports Agents to push for celebrity endorsements are:
1. Standing out Shorthand
3. Celebrity values re define and refresh the brand image
4. Celebrity add new dimensions to the brand image
5. The Celebrity is still in the game
6. PR coverage
Out of the huge basket of products put forward to the sports stars in every country, the four prime jewels (B) in brand endorsements are considered to be Shoe (Footwear companies like Nike and Adidas signing leading football players like Christiano Ronaldo and Lionel Messi and basketball players like Kobe Bryant), Car (Andre Agassi for Kia Motors), Apparels and Soft Drinks (MS Dhoni for Pepsi). On most occasions, a sports agents' salary is based on his commission. The commission generated is a function of the figures negotiated by the Sports Agent for his client. The higher the figures, the more will be his commission. The endorsement avenue provides the agents to acquire compensation upto 25% of the negotiated figure for the client. Hence, most sports agents jump on the endorsement bandwagon. The effect is often measured using
S: Successful Brand
P: Effective Product
D: Distinct Identity
AV: Added Value
Tax and Investments: Many sports agents handle their clients' tax and investment needs. Sports agents offer tax advice or contract the clients with an independent tax firm to offer tax advice, file tax returns, arrange tax withholding from pay checks and anticipate the tax obligations and deductions of investments. Agents may contract with financial planners to identify investment opportunities and to develop investment plans that best suit their clients. Some agents arrange for the bill payments of their clients. They may also arrange for real estate management and insurance services and counselling. The these 3 revenue streams along with the associated PR activities and event appearances involving the media and social organizations form the basis of the functioning of the Sports Agents and Sports Talent Management Agencies. The diagram (A) represents the revenue model of sports agencies.
Analysis of the contractual revenue model
1. The percentage based fee model seems to be the most popular model for player-agent contractual payments. However, all fees that any attorney charges must be tied to the amount and type of work involved and the results obtained. Percentage-based fees are generally the most expensive but it puts the player's ambition of ensuring a high salary with the sports agent goal of higher commission on the same page. Although a commission fee arrangement does not seem appropriate in a player-agent relationship. A contingency fee is accepted by the lawyer as the client is incapable to pay the hourly rate or the fixed rate. Here, the lawyer bears all of the economic expenses and risks throughout litigation. However, the lawyer will recover a greater sum if the sentence passed is in favour.
2. The hourly fee model works well as the client pays the agent on the basis of the work hours put in by the agent. Here, the payment is based on the time and presumably the effort put in by the agent. However, the major drawback of this model is when the contract negotiations fall through and the player and the club cannot reach and amicable settlement. Here, the player is visibly upset due to his loss. But the agent has made the effort and therefore deserves a fee. It is a predicament of double loss for the player.
3. The fixed fee model is the third alternative model where the player is clearly aware of the expenses to be born and can clearly plan out the economic sources from where to gather the fee. Here, the agent needs to clearly understand the scope of the service required from him and charge accordingly. Here, the topic of dispute is the player accusing the agent of not making the effort.
On the basis of the factors explained in the three models, we can draw a table
The Sports Agent
Percentage based fee
A sports agent can excel in the world of professional sports management if he possesses the following skills:
1. Good Communication skills
2. Strong Negotiation skills
3. Financial, Tax or Law background
4. Awareness of current sports events
5. Business and presentation skills
7. People oriented skills
8. Flexibility and high levels of self motivation
An Indian perspective
The current scenario of sports personality representation and sports agent is a highly disorganized one. A large number of sports personalities come from Tier 2 and Tier 3 cities. It is not unheard of to find a cricketer's family struggling to get two square meals a day before the son struck it big with his talents. It's a similar story to the blacks in the National Basketball Association and the National Football League of America. An inspiring rags-to-riches story might make the family a little more apprehensive to leave the economics and the finances in the hands of the professionals. A large number of sports stars still have their fathers, uncles and first cousins as career managers and agents. However, the professional agents coming from noteworthy agencies like Professional Management Group, IMG, Rhiti Sports, Kwan and Percept Talent Management push their clout through their contacts and manage to negotiate contracts for salaries and large sums of money for the clients. The pay check for the Indian cricketers is going through the roof and celebrity endorsements generate Rs.3-4 Crores per brand for A-List Sportsmen. A large number of boxing winners at the Commonwealth Games and the Asian Games have managed to confer lucrative deals with firms through career management services and brand associations. However, the average celebrity in India is still considered to be an A-List cricketer in a Dhoni or a Sachin or is understood to be a Bollywood Superstar in Shah Rukh or a Hrithik. The professional and multi-national Sports Agencies might carve a new path to prosperity for hitherto unknown sports stars.
Despite the influx of multi-national Sports Management agencies in India and growth of some of its own sports talent management firms, India still remains in the background of sports management activities. With more than 80% of professional athletes registered with an agency/agent in the United States and Europe the most lucrative market still remains the West. Less than half of the Indian athletes and sportsmen have an agent who is not a family member or a relative. India still has a lot of catching up to do in order to manage sports and sportsmen's careers in an organized and professional manner.
"All About Sports Agents" by Michelle Hill, www.sportsnetworker.com
Chronicle Guidance Publications (CGP), "Sports Agents", Brief 679