Why hire 3rd party management? The case for and against.
The truth to the matter is, you never HAVE to.
The time that an athlete has to maximize their potential is a small window in their life. When you are looking at the professional lifespan of an athlete is it never as long as people think. Most people will bring to mind Tom Brady or Michael Phelps as the norm. However, those athletes are the anomaly, and not the bell of the curve.
To maximize career earnings potential you have to look at the sport exposure and in the mirror. The reality is the NFL is a juggernaut and those athletes are at the top of the food chain for exposure, potential, and ease of conversation. However, the athletes in Olympic sports, for the most part, are on the complete opposite end of the spectrum. They are in events that only share the spotlight every four years and NBC has to create an infographic to explain what is going on. This is why they choose to air vignettes of athlete stories instead of a more ESPN style of sport only broadcast.
The other part, and probably the most important, is the mirror test. When you look in the mirror can you see yourself navigating the ins and outs of self representation? There are tons of athletes that have shown that they passed the mirror test and have been successful. Richard Sherman is one name that comes to mind and he was able to bet on himself with his deal structure and make it work. For me, it always comes down to math of my sport. Are the hours I am going to have to put in justify the net result.
Let's look at one example for an Olympic Sport athlete looking to secure a $10,000 sponsor for their upcoming season. Bear in mind as we work through this, these are all hours that are dedicated on top of sport training, pre-hab, recovery, travel, meal prep, and physical training. This is what most athletes believe securing a modest sponsorship looks like:
-Identifying Brands that align with sport and athlete philosophy 40hrs
-Prepare custom presentation and research solution points 15hrs
-Company gate keeper conversations (assuming first contact yes) 3hrs
-Execution of contract responsibilities (speaking, autographs, etc) 6- 12hrs
-Event responsibilities (tickets, meet-n-greets, etc) 6 - 12hrs
Total Per Hour: $118 - $142 per hour
That per hour ROI looks great on paper, but that would be the ideal situation where the first company you spoke with said Yes right off the bat. When I was on the US Bobsled team I acted as my own representation and kept spreadsheets of my efforts, I have always been a data driven person. I went back and pulled up a summer and here is the actual data that I pulled from attempting to get ONE category sponsor.
-Identifying Brands that aligned with me in one category
- 123 companies vetted; 37 companies aligned; two weeks of research 73hrs
-Prepared modular presentation that could be updated; unique per company 38hrs
-Called/Emailed each relevant company contact; also research contacts within
-Effort spread over 30+ days (calls, VM, Emails, 2nd emails, etc)
-22 not interested; 15 more information; 5 additional presentation 117hrs
-Create/modify Letter of Agreement or Contract (includes revisions) 6hrs
-Execution of contract responsibilities 10hrs
-Event Responsibilities 12hrs
Total ROI $39 per hour
The only challenge with this model showing revenue is the hours cost are about 30 days worth of 8 hour shifts.
Here is the model using a 3rd party agency that charges a 10%++ fee for easy math.
FULL DISCLOSURE: This is the 208Agency model.
-Initial meetings to learn about athletes goals and philosophy 1.5hrs
-Presentation of opportunities 1hr
-Execution of contract responsibilities 10hrs
-Event Responsibilities 2hrs
-Agency fee + Expense (legal review, etc) $1,500
Total ROI $1,545 per hour* *Hour plus a gain of 225.5 hours in the off season
At the 208Agency we also have an advantage of being small. When you come to visit you will not be blown away by our office building since we do not have one. Our meetings are going to go to be at my favorite taco place and have a great conversation over dinner. By staying lean and agile we are able to keep our operating costs at a minimum. We have a great team of writers, graphic artists, social media, event support, and legal experts. They are just contracted on a as needed basis, so we are not forced to pass their salaries on. This allows us to support athletes that normally would not be picked up by a larger agency. We are also able to secure smaller deals for our clients because our cost of acquisition is substantially lower.
Funding your season or capitalizing on your earning window is always the goal, how you get there is ultimately up to you. The same drive that allowed an athlete to reach the highest level of their sport will sometimes make them just as successful in the boardroom. However, if the person in the mirror needs the support of an agile agency that understands the challenges of training and securing sponsorship deals/events, there is always help to achieve the goals.