Agents receive a maximum of three percent of a player's contract. At first, it seems like the agent business can be a gold mine. Help sign a player to a 5 year deal worth $3 Million per year, and receive $90K each year of that contract--for work already done! However, that player only receives the majority of that money if he stays on the team and plays. Injuries and being cut from the team can ruin a deal. Additionally, many NFL players get paid less than that example. The average salaries are thrown off by the large superstar deals.
Where a lot of agents make money is doing player marketing. The market for athlete endorsements has also increased. In a recent issue of The Sports Business Journal, John Slusher, VP of Nike Sports Marketing says, “Our strategy hasn’t changed [due the the economy]. We are buying as many athletes, if not more, but at a better price” (as cited in Lefton, 2010, p. 25). While this might mean less endorsement dollars for an individual athlete, it also means more athletes have endorsement opportunities. Although there was a slight decline from 2009 to 2010, Nike shows over a 100% increase in endorsements commitments over the last five years (1.6 billion in 2006 to 3.8 billion in 2010) (Lefton, p. 32). This means there are endorsements to be had for players of all caliber. The days of superstars being the only ones with marketing ability have passed.
Agents make a much larger percentage on endorsements. Between 15% and 25% is the industry norm. To make money as an agent it is beneficial to offer both services, contract negotiation and marketing.
Lefton, T. (2010). Endorsements remain buyers market. Street & Smith’s Sports Business Journal, 13(21), 25-32.
NFL Player Salaries. (2009). Xomba. Retrieved from www.xomba.com/nfl_player_salaries_list_and_discussion
