Creative Artists Agency (CAA) in Los Angeles, CA recently reached an agreement to acquire International Creative Management Partners, a sports and entertainment agency. This deal could change the way sports business is conducted.
It is the latest move by CAA into sports management. In February it acquired a Los Angeles-based full-service basketball talent representation agency. Last year, it absorbed Base Soccer Agency, a company that represents 300 international football players, coaches, and managers.
This begs the question is a concentration of power in the hands of a few agencies a positive or negative for the game.
According to a Forbes article, published in December of 2020, CAA already led the rankings with a total of over $8.8 billion in contracts management value and $419 million in commissions.
CCA was followed closely by Wasserman. Wasserman brought in 5.7 billion for their contracts and $331 million in their commissions. The article credited this in part to the absorption of a number of smaller agencies including Top Value, Mondial promotion and Key Sports.
Ranking third was Excel Sports Management bringing in 3.9 million in commissions.
ESTABLISHED PLAYERS MAY BENEFIT
Established players and managers may consider these conglomerates to be a positive change because they reduce the competition in the market. This may help drive up fees for both them, and in turn the agency.
The newly created agency does not have a monopoly. There are still many other established agencies that clubs deal with. Additionally, there are individual agents and small to medium sized agencies that cater to clients.
But, for the young footballer who is hoping to be discovered, it may be more difficult to find good representation. The sad fact is that football, at the top level, is a very competitive business and that out of the hundreds of young players that sign professional contracts with football clubs, around five out of every six will be deemed surplus to requirements by the age of 21.
Most often, the buying club pays the agent during a transfer. Typically, commission rates are between 5% – 10%. With another large agency involved, the value of transfer deals may inflate.
Many young players who are dropped try to find lower level clubs to join, with the hope that they can work themselves back up. Will it be more difficult to find a reputable agent to help them if the large conglomerates do not wish to cater to this group?
How can a small agency or the single agent hope to compete with these monster agencies? At best, an agent may be able to direct their players to a limited set of clubs. It is highly unlikely they will have contacts to the same network as their larger counterparts.
Will this further the divide between the player who is already in the sights of clubs and agents and those talented youngsters who have not been found.
It makes one wonder, if more agencies merge or are absorbed, how will it effect player negotiations? And more importantly, how will this affect the young footballers who arent backed by these behemoths.