Jay-Z, Lil Wayne and many more artists who have invested

Jay-Z, Lil Wayne and many more artists who have invested

Breaking into the $10 billion-a-year sports agency business is almost as difficult as the big leagues themselves — goaltenders are tough and powerful, and the cost of competing with them can be prohibitive. Today, the growing relationship between athletes and agents — players want their agents to find profitable ways to capitalize on their fame, while agents want to focus on high-dollar contracts — creates opportunities for entrepreneurs to disrupt the business. Some of them come from the music industry, using their cultural assets to find clients and opportunities, including Jay-Z, who has a sports agency business at Roc Nation; Young Money APAA Sports; and Quality Control Sport. More music stars are on the way this year as well.

Five firms currently dominate the business — CAA Sports, Wasserman Sports, WME Sports, Excel Sports and Octagon — and together they generate half of the $6 billion in commissions collected by the top 20 companies. Forbes. On the surface, these companies operate somewhat like music and film/TV agencies, where executives identify opportunities for their clients and negotiate on their behalf. But the vast majority of money comes from long-term player contracts that command huge commissions, and many athletes feel that this causes agents to ignore opportunities and investments adjacent to the sport. Roc Nation and Rich Paul’s Klutch Sports, building on their reputation for combining sports and entertainment, have used this to challenge established players, with enough success that they now rank 7th and 9th in revenue. Forbes.

Does this mean that other musicians and music executives will, or even should, follow suit? Starting a sports agency is expensive – it can cost anywhere from $40 million to $50 million Forbes, that’s a big bet even for most stars. So this usually means finding additional investors in the form of financial backers or other entrepreneurs, as well as athletes looking for an agent or new one.

With a source of both cash and credibility in Jay-Z, Roc Nation entered the sports business with four-time All-Star Yankees second baseman Robinson Cano in 2013, five years after the company launched. Its sports division currently has 190 clients, including Charlotte Hornets point guard LaMelo Ball and New York Giants running back Saquon Barkley, and about $2 billion in player salaries and another $500 million in sponsorship and non-salary contracts. Forbes, estimates the company generates $203 million a year in revenue from its sports operations. (Roc Nation declined to comment on its finances.) Klutch Sports, where Paul is LeBron James’ agent and manager, is also a board member of Live Nation Entertainment.

That kind of success brings competition, including 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’s clients include New Orleans Saints running back Alvin Kamara and Kansas City Chiefs wide receiver Richie James. Lil Wayne’s Young Money APAA Sports also put points on the board by signing University of Miami’s Leonard Taylor III ahead of the 2024 NFL Draft.

This does not mean that every initiative succeeds. Jeezy Sports 99 started his agency in 2019, but it closed during the pandemic, and Donda Sports, which Kanye West launched in 2022 with basketball players Aaron Donald and Jaylen Brown, imploded within months after West made a series of anti-Semitic comments.

The rapid evolution of both the sports and music businesses may continue to lure musicians with money and prestige, but anyone entering the sports agency business, no matter how famous, will likely find it tenuous.

This story will appear in the February 10, 2024 issue Billboard.

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