Has Social Media Killed The Sports Marketing Agent? – Forbes

Many people have figured out how they can leverage their social media followings for economic gain.  In fact, the growth of Facebook, Instagram, Twitter Twitter and other social networks has led to the creation of the “social media celebrity” — an individual who is able to leverage his or her followers in engaged communications with either overtly sponsored material or undisclosed, paid posts.

Teenagers are purportedly more enamored by YouTube stars than Hollywood celebrities, but it goes further than that.  Millennials often care more about logging on to Instagram and looking at pictures of “fitness models” than reading about a new endorsement deal signed between a brand and a traditionally more recognizable professional athlete.  What does this all mean for the sports marketing agent?

“Social media has killed the sports marketing agent,” claims former professional athlete marketer Evan Morgenstein.  ”The athlete market is dead.  Sports agents are losing so many deals that they used to get as full endorsement deals to ‘celebrities’ just willing to lend themselves on social media.  [There is] no need for appearances or traditional advertising.”

Houston Rockets guard James Harden is one of those “top 5%” athletes who can command big marketing dollars from brands that no longer hand out money. (AP Photo/Ben Margot)

The more traditional forms of endorsement agreements may contain provisions that require an endorser to make appearances for the brand, use a product exclusively as part of a particular category of goods and provide a grant of rights to a brand that allows the brand to form an association with the endorser in the brand’s own marketing and promotional endeavors.  The 49-year-old Morgenstein says that the top 5% of athletes are still going to earn those types of deals and that the terms are going to be even more rewarding, because those athletes and celebries can deliver an audience through social media.   The 13 year, $200 million offer from Adidas Adidas to Houston Rockets guard James Harden is proof that marketing budgets have expanded for superstar athletes.  However, Morgenstein feels that the market below those in the top 5% has completely collapsed.

“The first question asked by PR people is, what’s your social media numbers?  What’s your engagement numbers?  What kind of sell-through are you getting?  These are the questions that sports agents never had to answer in the past,” explains Morgenstein.

Another issue is price point.  A strictly social media deal comes at a major discount from a full fledged endorsement deal.  Morgenstein makes two points about these agreements: (1) they include easy obligations that commonly pay in the low five figures, which are hard for athletes to pass up; and (2) the strong brand marketers are reaching out directly to athletes (via direct message or otherwise) and many athletes are not compensating their agents for these types of tasks.  Morgenstein says agents are not going to start arguing with their clients about the small loss of compensation or else those clients will be on to the next representative.

“In the past, if you were on the Chicago Bulls, New York Knicks or Los Angeles Lakers, you would have those high paying endorsement deals,” says Morgenstein, who broke into the business representing professional basketball players.  ”Now companies don’t need that anymore, because the global nature of social media has precluded the necessity to have someone in those major cities.  When I got into the business, you had a paid shoe deal.  Not true anymore.  Manufacturers are discouraged from doing that, because the opportunity to hyper-focus their dollars with different social media has given them a different take on where to spend their dollars.”

Morgenstein, who now focuses his efforts on representing social media stars like Instagram fitness model sensation Jen Selter, says that the new climate of buyers no longer wanting or needing to spend an exhaustive amount of time and money on traditional deals will kill the sports marketing agent.  He has shifted from being an athlete representative to discovering individuals with massive social media followings who reached the point where self-representation was manageable.

“The market has now told agents to [expletive] themselves.  We aren’t going to talk to you anymore because you are a pain in the ass.  We will go find social media stars — 20, 30, 50 of them — and pay them a fraction of the cost,” says Morgenstein.

Darren Heitner is a lawyer and the Founder of South Florida-based HEITNER LEGAL, P.L.L.C., which has a focus on Sports Law and Entertainment Law.

Follow @DarrenHeitner