The World’s Most Valuable Sports Agencies 2017 – Forbes

CAA

CAA lands an incredible 11 agents on this year’s most powerful list, including, from left, No. 21 Jimmy Sexton, No. 9 Pat Brisson, No. 41 Aaron Mintz, No. 44 Steven Heumann and No. 16 Nez Balelo.

With escalating media rights deals, rising salary caps and massive infusions of cash into professional sports leagues, athletes’ contracts are bigger than ever, and the sports agency business is booming. The firms featured in Forbes’ 2017 ranking of the World’s Most Valuable Sports Agencies have negotiated a collective $43 billion in current professional athlete contracts, netting more than $2.1 billion in commissions, an increase of almost 10% over last year.

Leading the list once again is Creative Artists Agency (CAA), whose $8.5 billion in contracts under management is more than the combined total of the next three agencies. Those deals ― including almost $1 billion in the last year alone ― will earn the agency $318 million in commissions.

Even more impressive is that each of CAA’s divisions is itself dominant in its sport; the agency’s football and hockey divisions rank first, its basketball division ranks second and its baseball division ranks third. In fact, CAA’s football division alone has negotiated some $3.5 billion in NFL contracts ― more than any other agency on the list.

On a per-agent contract basis, though, CAA’s hockey group takes the cake. Managed by just two primary agents ― No. 9 Pat Brisson and No. 17 J.P. Barry ― the division represents more than $1.82 billion in player contracts, surpassing No. 9
Newport Sports Management
as the most valuable hockey practice in the world.

It should be no surprise that CAA lands a record 11 agents on this year’s World’s Most Powerful Sports Agents list, including five of the top 20. Among CAA’s biggest contracts are the record-breaking five-year, $135 million deal Matthew Stafford recently signed with the Detroit Lions; the Seattle Mariners’ 10-year, $240 million deal with Robinson Cano (signed in December 2013); the Chicago Blackhawks’ eight-year, $84 million deal with Patrick Kane (signed in July 2014); and the five-year, $124 million deal that Carmelo Anthony, a new member of the Oklahoma City Thunder, signed with the New York Knicks in July 2014.

Solidifying itself as the No. 2 most valuable agency is
Excel Sports Management
, whose $3.4 billion in contracts represents a $300 million increase over last year. Founded by Jeff Schwartz in 2002, Excel is now home to the No. 1 basketball, No. 2 baseball and No. 2 golf practices. Schwartz himself is the world’s top-ranked basketball agent, managing a roster of more than 60 NBA players, including four ― Blake Griffin, Kevin Love, Andre Drummond and C.J. McCollum ― with deals for more than $100 million.

Casey Close, a partner, is the No. 3 baseball agent, having negotiated a portfolio of deals that includes Clayton Kershaw’s seven-year, $215 million contract with the Los Angeles Dodgers (signed in January 2014) and Masahiro Tanaka’s seven-year, $155 million agreement with the New York Yankees (signed the same month).

Mark Steinberg, the No. 1 golf agent in the world, represents Tiger Woods, Justin Rose, Matt Kuchar and Justin Thomas for Excel while Alan Zucker handles marketing for some of the biggest names in sports and entertainment. While Excel is substantially smaller than CAA, its per-agent and per-client revenue is significantly higher, proving that it is possible to build a highly successful multi-sport agency practice while maintaining a boutique business model.

Excel

The Excel Sports Management partnership group includes, from left, Mark Steinberg, Jeff Schwartz, Alan Zucker and Casey Close.

Moving up one spot, to No. 3, is Los Angeles-based Wasserman, with some $2.7 billion in contracts and $135 million in commissions. Wasserman includes the No. 3 basketball, No. 5 golf and No. 6 baseball practices. Wasserman also recently acquired European soccer agency Mondial Partners, which combined with its domestic soccer division gives it the strongest soccer division of any multi-sport agency in the world. And Wasserman is home to a fledgling NFL division that represents Indianapolis Colts quarterback Andrew Luck and his five-year, $123 million contract (signed in June 2016). Wasserman lands three agents ― No. 14 Joel Wolfe, No. 27 Adam Katz and No. 50 Darren Matsubara ― on the most powerful list.

Making up ground from last year is No. 4
Independent Sports & Entertainment
, which has $2 billion in total contracts under management and is home to the No. 5 football and baseball practices, as well as the No. 6 basketball practice. Like Wasserman, the agency ranks three agents on the most powerful list: No. 24 Fernando Cuza, No. 29 Mark Pieper and No. 40 Doug Hendrickson.

There are five new agencies in this year’s rankings, including three firms specializing in soccer: No. 18
Unique Sports Management
, No. 21
Base Soccer Agency
and No. 25
Lian Sports
. They are joined by No. 34
Klutch Sports
, run by basketball agent Rich Paul, and No. 36 
KO Sports
, managed by hockey agent Kurt Overhardt. The biggest mover on this year’s list is Houston-based football agency
Select Sports Group
, which rose 11 spots, to No. 29, with more than $700 million in negotiated NFL contracts.

The 40 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, Excel Sports Management, Wasserman, Independent Sports & Entertainment and No. 5 
Octagon
) by themselves represent more than one-third of all professional athletes, proof of the incredibly high barrier to entry in the sports agency business.

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: The World’s Most Valuable Sports Agencies and World’s Most Powerful Sports Agents

Jason Belzer is Founder of GAME, Inc. and a Professor of Organizational Strategy at Rutgers University. Follow him on Twitter @JasonBelzer.