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The $10 billion-a-year business of sports agencies is almost as difficult to break into as the big leagues themselves — the gatekeepers are entrenched and powerful, and the cost of competing with them can be prohibitive. For now, though, a growing disconnect between athletes and agents — players want their agents to find them profitable ways to capitalize on their fame, while agents want to focus on big-dollar contracts — is creating opportunities for entrepreneurs to cease business. Some of them come from the music industry, using their cultural package 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 as well.
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 collected by the top 20 firms. 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 bulk of the money comes from long-term player contracts that yield huge commissions, and many athletes feel that this leads agents to ignore opportunities and investments adjacent to the sport. Roc Nation and Rich Paul’s Klutch Sports, built on their reputations for combining sports and entertainment, used this to challenge established players, with enough success that they now rank at No. 7 and No. 9 in revenue, respectively , according to Forbes.
Does this mean other musicians and music executives will follow their lead – or even should? Opening a sports agency is expensive – it can take between 40 and 50 million dollars, according to Forbes, which is a big bet even for most stars. So this 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 very strong source of money and credibility in Jay-Z, entered the sports business in 2013, five years after starting the company, with four-time All-Star Yankees second baseman Robinson Canó. Its sports division now has 190 clients, including Charlotte Hornets 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 non-salary deals, according to Forbes, which estimates the company’s sports operations generate $203 million annually. (Roc Nation declined to comment on its finances.) Klutch Sports, where Paul is LeBron James’ agent and manager as well as a board member for Live Nation Entertainment, generates about half of 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 bought their company. Their agency clients include New Orleans Saints running back Alvin Kamara and Kansas City Chiefs running back Richie James. 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.
However, this does not mean that every venture succeeds. 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 anti-Semitic comments.
The fast-paced evolution of both the sports and music businesses may continue to tempt musicians with money and influence, but anyone entering the sports agency business, no matter how famous, will probably do so as an underdog. .
This story will appear in the February 10, 2024, issue of Billboard.