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Is Breaking Into The Sports Agency Game Worth It — Or Even Doable?

today02/09/2024

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The $10 billion-a-year sports agency business is almost as hard to break into as the big leagues themselves — the gatekeepers are entrenched and powerful, and the cost of competing with them can be prohibitive. Right now, though, a growing disconnect between athletes and agents — players want their agents to find them lucrative ways to leverage their fame, while agents want to focus on the high-dollar contracts — is creating opportunities for entrepreneurs to disrupt the business. Some of them are coming from the music industry, leveraging their own cultural cachet to find clients and opportunities, including Jay-Z, whose Roc Nation includes a sports agency business; Young Money APAA Sports; and Quality Control Sports. More music stars are on their way this year too.

The business is now dominated by five firms — CAA Sports, Wasserman Sports, WME Sports, Excel Sports and Octagon — which together generate half of the $6 billion in commissions that the top 20 firms collected, according to Forbes. On the surface, these companies operate a bit like music and film/TV agencies, where executives identify opportunities for their clients and negotiate on their behalf. But the vast majority of the money comes from long-term player contracts that deliver giant commissions, and many athletes think this leads agents to ignore sports-adjacent opportunities and investments. Roc Nation and Rich Paul’s Klutch Sports, built on their reputation for combining sports and entertainment, used this to challenge the entrenched players, successfully enough that they are now ranked No. 7 and No. 9 by revenue, respectively, according to Forbes.

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Does that mean other musicians and music executives will follow their lead — or even that they should? Launching a sports agency is expensive — it can take between $40 million and $50 million, according to Forbes, which is a big bet even for most stars. So that usually means finding additional investors, in the form of financial backers or other entrepreneurs, plus athletes who are either looking for an agent or a new one.

Roc Nation, which had a rock-solid source of both cash and credibility in Jay-Z, entered the sports business in 2013, five years after the company’s launch, with four-time All-Star Yankees second baseman Robinson Canó. Its sports division now has 190 clients, including Charlotte Hornets point guard LaMelo Ball and New York Giants running back Saquon Barkley, and about $2 billion in player salaries and another $500 million in sponsorships and nonsalary deals, according to Forbes, which estimates that the company’s sports operations generate $203 million a year. (Roc Nation declined to comment on its finances.) Klutch Sports, where Paul is agent and manager for LeBron James, as well as a board member for Live Nation Entertainment, generates about half that.

That kind of success brings competition, including from music executives Kevin “Coach K” Lee and Pierre “P” Thomas, who launched Quality Control Sports in 2019, four years before HYBE purchased their company. Their agency’s clients include New Orleans Saints running back Alvin Kamara and Kansas City Chiefs wide receiver Richie James. The Lil Wayne-owned Young Money APAA Sports has also put points on the board by signing University of Miami’s Leonard Taylor III ahead of the 2024 NFL draft.

That doesn’t mean every venture succeeds, though. Jeezy started his Sports 99 agency in 2019, but it closed during the pandemic, and Kanye West’s Donda Sports, launched in 2022 with basketball players Aaron Donald and Jaylen Brown, imploded within months after West made a series of antisemitic comments.

The fast-paced evolution of both the sports and music businesses may continue to tempt musicians with money and influence, but anyone who enters the sports agency business, no matter how famous, will probably do so as an underdog.

This story will appear in the Feb. 10, 2024, issue of Billboard.

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