A sports agent procures and negotiates employment and endorsement contracts for an athlete.
Agents are responsible for communications with team owners, managers, coaches, and other individuals. Primarily, agents are used to broker and negotiate contracts for their clients. Also, they are responsible for making recommendations in regards to the athlete's options. In addition to finding income sources, agents often handle public relations matters for their clients. In some large sports agencies, such as IMG, Creative Artists Agency, and Octagon, agents deal with all aspects of a client's finances, from investment to filing taxes.
Sports agents may be relied upon by their clients for guidance in all business aspects, and sometimes even more broadly. For example, hockey agents start recruiting clients as young as 15, allowing the agent to guide the athlete's career before the NHLdraft, which happens usually at 18 years of age.
Due to the length and complexity of contracts, many sports agents are lawyers or have a background in contract law. Agents are expected to be knowledgeable about finance, business management, and financial and risk analysis, as well as sports. It is important for a sports agent to follow trends in sports. Other skills an agent must possess are excellent communication and negotiation skills. Agents must be highly motivated, willing to work long hours, and have the ability to multitask. It is very common for agents to be in negotiations on behalf of several clients at one time.
Some agents are part of large companies, and some are on their own. The number of clients an individual agent can handle and how many clients his or her employing agency can handle in total are interdependent variables.
Before the 1990s, most soccer players did not use agents. In some cases, they used their fathers as agents. Because of most parents' naivete about the football business, these young footballers were often given less-than-stellar contracts by football clubs, which yielded lower salaries than they thought they deserved. In Sweden, there were only three licensed agents in 1995. As of 2002, there were 33. According to FIFA, there were 5,187 licensed association football agents world-wide, with 600 agents in Italy alone. Since 2001, agents have not been licensed by FIFA. Instead, agents are now licensed directly by each association.
Sports agents generally receive between 4 and 10% of the athlete's playing contract, and 10 to 20% of the athlete's endorsement contract, although these figures vary. NFL agents are not permitted to receive more than 3%, and NBA agents not more than 4%, of their client's playing contracts.
Colleen Howe (deceased): ice hockey, late president of Power Play International and Power Play Publications managing hockey careers and business interests of her husband Gordie Howe and their sons Marty and Mark Howe.
There have been some efforts to transform the sports agency business from an individual, entrepreneurial business, to more of a corporate structure. These experiments met with varying degrees of longevity and success.
360 Sports Agency: – Community based sports agencies supported by a centralized corporate office that provides certified contract advisors with resources necessary to feasibly pursue contracts with athletes.
Creative Artists Agency: "CAA" – acquired various pieces of the sports agency business of SFX (see below), starting with football.
Elias Sports Agency: "ESA" – Full-service sports agency, services including, contract negotiation, endorsements, marketing, draft and combine training, media relations consulting, post career counseling, personal one-on-one attention.
XL Sports Management- Full service agency that handles NFL players. Negotiates contracts, draft and combine training,media,post career, personal one-on-one attention to each player. Owned by Marco Marciano, and agent Frank Gaitan, and Big Irv Smith from the New Orleans Saints.
Some sports agency firms were once prominent, but are now gone or reorganized:
Assante Corporation – Canadian public company that acquired the Steinberg, Moorad & Dunn agency, then acquired other than agencies including Dan Fegan & Associates and Maximum Sports Management in an unsuccessful effort to build multi-sport corporate agency.
SFX Entertainment (now Live Nation, a publicly traded company) – in 1998 SFX agreed to pay up to $150 million in cash, stock, and bonuses for F.A.M.E., the sports agency run by David Falk, the agent for basketball players Michael Jordan and Patrick Ewing. SFX also acquired two other major sports agencies, Arn Tellem's agency (Tellem & Associates) and the baseball-oriented firm run by Randy Hendricks and Allan Hendricks. SFX would later reverse course, and sell off the pieces of its large sports agency business.
Steinberg, Moorad & Dunn ("SMD") – a multi-sport agency sold in October 1999 for reported $120 million to Canadian financial firm. Defections of principals, and litigation, followed. Originally led by entrepreneurial agents Leigh Steinberg and Jeff Moorad.