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Top NFL Prospect Launches Player Representation Agency
University of Michigan defensive lineman Rashan Gary, who will forego his senior season to enter the 2019 NFL draft, has announced plans to form his own sports agency. Licensed NFL player agent Ian Clarke will join Gary at Rashan Gary Sports (RGS) and will be responsible for team contract negotiations during the player’s NFL career; DSA Media Group will handle player marketing. The decision to launch RGS will make the projected top-10 selection the first American athlete from a Big 4 sport to own a player representation agency during an active playing career.
Howie Long-Short: Players (see: Lamar Jackson) have opted to represent themselves and lean on the rookie wage scale in lieu of hiring an agent, but the decision is typically driven by the athlete’s desire to avoid paying a 3% agent fee (usually accounting for a few hundred thousand dollars), not to retain control of their future. Don Povia is a sports marketing veteran and the founder of Transition Sports & Entertainment, a strategic business consulting agency for athletes, entertainers and brands. I asked Don to explain what’s driving players to stray from the typical agent-player relationship?
Don: It’s all about empowerment and taking ownership in the process, rather than defaulting to the status quo; which is tilted against the players. Jackson knew he was a first-round pick, knew salaries were slotted and knew he’d be paying an agent for something that ultimately, he had primary control over. People laughed at him, but I thought it was brilliant. Gary has chosen to be much more encompassing. As an agency owner, conceivably he’ll earn on both ends. But his thought process is the same as Jackson’s in the sense of “why am I giving away more than I should to someone who likely views me as little more than a vehicle to their own professional and financial advancement?”
Gary’s wise to be preparing for life after football with the average NFL career just 3.3 years and 78% of players (NFL & NBA combined) eventually going broke. I asked Don why more players aren’t thinking critically about their short earnings window and acting accordingly?
Don: Players don’t know, what they don’t know. They come out of college and think that the first thing they need to do is find an agent, because that’s what they saw everyone before them do. The agents aren’t looking to change the status quo (because they’re cashing in) and the players adversely effected (see: those with short-term careers) by the existing system, don’t know it needs to. The highest profile players make enough money that agent fees are not a concern; lower profile ones don’t have the sense that they can thrive without an agent.
Setting up his own agency is just the latest business savvy move from the 21-year-old, The Sports Biz’ Darren Heitner reported that the former #1 overall recruit (Class of 2016) has been awarded a trademark on his name and has since filed for trademark registration on his personal insignia, for use with sale of apparel. Fans of the Michigan star will be familiar with Gary’s RG logo, he’s branded his various social media channels with the logo throughout the ’18 season.
That said, Rashan Gary Sports is no lock to become a success, particularly if Gary struggles in his transition to pro football. I asked Don what Gary’s worst case scenario would look like?
Don: Gary can be a terrible player that washes out, but if he sets this thing up right with the right professionals around him, he may be able to parley it into a viable business. Worst case scenario would be him selecting the wrong business people to run it; remember, his focus will be on football. There are a lot of untalented people that glom on to athletes and appreciate the glamour of working in sports without recognizing the hard work needed to be successful. Gary needs to model this thing after non-sports agencies. Take sports out of the equation. Take sports people out of the equation. If he loads it up with the same old rehashes, he’ll be setting himself up for a high-profile disaster. He needs to set this up and position it, not as a competitor to existing agencies, but as an alternative model. Don’t go head to head, because you aren’t really the same thing and you won’t win a game fixed to see you fail.
Financially speaking, it seems as if Gary has little to lose. Whatever investment costs are associated with launching the agency will likely be largely offset by the its keep in the agent fee on his rookie contract; and remember, if he would have pursued the typical agent-player relationship, he still would have been on the hook for $340K (1% of the total value of his rookie contract).
Fan Marino: On the field, Gary’s 2018 season is over; the freakishly quick lineman won’t play in the December 29th Peach Bowl against Florida. Instead, he’ll head to Texas to begin training at Michael Johnson Performance. Assuming his shoulder checks out (he missed parts of 5 games this season with injury), Gary should be a top 5 selection; ESPN’s Todd McShay has him as the #2 overall prospect in the draft, behind only Nick Bosa (Ohio State).
Should he be selected 2nd overall, Gary can expect to sign a contract worth nearly $34 million; meaning Rashan Gary Sports’ first contract negotiation will be a million dollar one (assumes he’s not looking to cut down the standard 3% agent fee, typically top prospects pay closer to 1%), $1,020,000 to be exact.
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JohnWallStreet, located at the intersection of sports and finance, is a destination for the educated sports fan.
While we won’t be publishing “hot takes” on LeBron’s relative greatness to Jordan, we will be offering up the most relevant sports related business news, in easily digestible bites, with commentary from both the sports money and sports fanatic perspectives.
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Howie Long-Short and Fan Marino will be providing their expert opinions on each story. They have slightly different areas of expertise. Fan Marino is a firm believer that the SEC is the premier football conference. Howie Long-Short knows it as the Securities & Exchange Commission. Fan Marino lives and dies with the college selection of 5 star, blue chip recruits. Howie Long-Short spends his days analyzing blue chip stocks. Howie Long-Short knows that Black Monday occurred on October 19th, 1987. Fan Marino swears it happens every January after Week 17. You get the point.