CAA Breaks The Bank For Its Baseball Clients – Forbes
Creative Artist Agency’s legacy dates back to 1975 when a handful of William Morris agents, including Michael Ovitz and Ron Meyer, broke out on their own. A-list clients from Hollywood and the music world signed on to the burgeoning agency. Yet, it took three decades before CAA took the plunge into sports.
CAA has built a massive sports business practice over the past decade with $8.5 billion in contracts under management – more than the next three biggest agencies combined. CAA lands the top spot in FORBES’ annual look at the most valuable sports agencies.
CAA Sports gets recognized largely for the massive deals it’s done in football for its cadre of elite quarterback clients like Peyton and Eli Manning, Matt Ryan, Matthew Stafford, Drew Brees and more. Tom Condon, Jimmy Sexton and Todd France lead the football division and are three of the most influential agents in the sport.
But the baseball business has also built a dominant position using a three-headed leadership team of Nez Balelo, Jeff Berry and Brodie Van Wagenen. Other baseball agents might make more headlines, but CAA Baseball clients inked $2.2 billion worth of deals since 2012 (Boras Corp ranks second at $2.04 billion).
Momentum at CAA Baseball has been even stronger over the past 12 months with $503 million in MLB contracts, nearly $200 million more than the next closest agency (ACES did $308 million in deals). It included four of the top seven contracts signed with Yoenis Cespedes ($110 million), Will Myers ($83 million), Ian Desmond and Jean Segura (both $70 million). Cespedes was the seventh $100 million MLB contract done by CAA.
Most baseball agencies operate with one lead agent, but CAA’s trio all credit their unique structure for the success of the division. “Collaboration and teamwork are at the core of our culture of success,” says Berry. He says that the any of the three of them might have a stronger relationship with a particular club and that ultimately benefits the CAA client.
The business of baseball has changed dramatically on and off the field to the benefit of the larger agencies with scale. “Information has always been power in any industry and it is certainly true in baseball and contract negotiations,” says Van Wagenen. “The people that are capable of analyzing that data in a more sophisticated way are the people that have had the opportunity to succeed.
CAA developed a value above replacement model last year for Cespedes’ free agency. It measured on-field value, as well as his contribution to revenue generation in 2016 and going forward. Cespedes’ $110 million deal was 28% higher than any other contract inked over the past 12 months.
CAA Baseball has more than 100 MLB clients and has gone to the mats for many of them. After catcher Buster Posey’s 2011 season was cut short by a collision at the plate, Berry lobbied MLB and the player’s union to limit home-plate collisions and MLB added a rule three years later to protect catchers. CAA’s internal legal team mounted a defense for Ryan Howard and Ryan Zimmerman when they were accused in 2015 of using performance-enhancing drugs in an Al-Jazeera documentary. MLB cleared both players, but both filed libel lawsuits.
Most recently, CAA called for changes after Adam Jones was subjected to racial taunts at Fenway Park in May. The Boston Red Sox implemented a fan conduct policy where hate speech results in a lifetime ban from Fenway.
CAA is primed to continue its spot near the top of the sport with young stars like Noah Syndergaard and Trea Turner on its roster. CAA is the only agency to represent a top-five pick in each of the past three MLB Drafts. Hunter Greene was picked second overall this year by the Cincinnati Reds and set a record for a high school pitcher with a $7.2 million signing bonus.
CAA Baseball’s most famous client has never thrown a pitch or taken a swing in the major leagues. Former NFL quarterback Tim Tebow has been a CAA client since 2012 and the agency handles his on and off-field activities. Tebow had not played organized baseball since his junior year in high school before he started training last year for a baseball career after a decade away from the game.
Van Wagenen is overseeing Tebow’s entry into the sport, which included the New York Mets signing the 2007 Heisman Trophy winner last September after a workout with 46 scouts in attendance. Tebow played for in the Mets’ minor league system this year, sparking attendance boosts all summer.
Tebow is working out in Los Angeles with the goal of continuing his baseball career. “He is working with a hitting instructor to continue to make strides on his swing so he can make 2018 his breakthrough year,” says Van Wagenen. “I think he has proven to people there is prospect value and there is talent that can be developed and hopefully one day make a major league impact.”
It is a good time to be an MLB player with the average salary north of $4 million, but it is an even better time to be an owner with the average franchise worth $1.5 billion. Profits are at record levels with player costs well below the 50% threshold that players in the NFL and NBA receive. Baseball is working on its three decades of labor peace, but changes could be coming to the current system. “Players have identified the business is very good and headed in a positive direction,” says Balelo. “Players are not looking to steal any money. I just think they are looking to be treated fairly and create some equality in what the owners are getting and what they are getting.”