Tuesday, May 10, 2005

For Sports Agents, often your best is never good enough

When is enough not enough? For LeBron James it would seem Aaron and Eric Goodwin who have negotiated more then $100 million in endorsement agreements for LeBron, but for LeBron results are not good enough. LeBron reportedly has fired the Goodwin brothers, in favor of Maverick Carter, James' close friend and a former high school teammate. Carter will become the leader of a team that will take over deal-making responsibilities for the Cleveland Cavaliers' rising star, who ranks as the fourth-highest-paid athlete endorser in the world.

According to ESPN.com’s Darren Rovell only golfer Tiger Woods ($90 million per year), Formula One driver Michael Schumacher ($50 million) and soccer star David Beckham ($35 million) are paid more off the playing field.

"I'm stunned by everything that is happening," Aaron Goodwin said in an ESPN.com report. "We did everything for LeBron to help mold him off the court and become the next big icon in sports. If what we did over the past two years led him to believe that he no longer needs an agent, then I guess we didn't do too badly."

Two short years ago (May 13, 2003) Aaron Goodwin became the toast of the basketball agent world when LeBron selected the Seattle based agent as his agent.

"I was looking for the best individual to guide me through some critical steps in my upcoming pro career, and Aaron Goodwin is my choice," James said in a statement released by his publicist at the time.

Goodwin wasn’t a well known agent at the time. His only NBA clients of note were Gary Payton and Damon Stoudamire. In LeBron, Goodwin saw the opportunity of a lifetime, a chance to sign an athlete who could propel him to the top of the agent field. Goodwin was a regular at James’ St. Vincent-St. Mary High School games, attended the April 25, 2003 press conference when James announced he would make himself eligible for the NBA draft and sat courtside with his mother, Gloria, at the 2003 Jordan Classic All-Star game in Washington.

James’ looked for an agent who would has he suggested ‘guide me through some critical steps’. Goodwin did that and a great deal more. He negotiated what was then considered a landmark $90 million agreement with Nike and a $12 million contract with Coca-Cola. In the Coca-Cola deal, which has four years remaining on it, James has appeared in Sprite and Powerade commercials as well as on the packaging. He was due an undisclosed bonus if Powerade's market share increased, which it did by 3 percent. The Goodwins also negotiated a memorabilia deal with Upper Deck and a chewing-gum deal with Cadbury Adams for Bubblicious.

His choice of a former high school teammate is going to raise several issues. Maverick Carter has spent the last two years working for Nike (the key company LeBron has a contractual agreement with) and Carter is not is not currently registered as an agent with the NBPA. According to ESPN’s Rovell it would appear Carter doesn’t have any immediate plans to become a certified NBA agent.

Carter and James' road manager, Randy Mims, will be part of a group that will pursue future business transactions for James. James who has just turned 20 has two years left on his current contract with the Cleveland Cavaliers.

On nearly ever level this is disturbing. Just what did LeBron expect of his agents and what did they fail to deliver to an athlete who has just turned 20? Short and sweet the Goodwin brothers did everything that was expected of them, and then were shown the door by their client. It seems as if athletes who live in the stratosphere LeBron James, $100 million isn’t enough. As for the Goodwin brothers, one can only hope they ensured they will be paid the commissions they’ve earned, likely between 10 and 15 percent for the agreements they negotiated in good faith on James’ behalf. Agents are paid a fraction of that percentage for contracts but are usually paid a much higher percentage for endorsement agreements.

The NBA desperately needs LeBron James to succeed both on and off the basketball court. They need LeBron to help restore their fractured image. Gone are Michael Jordan, Larry Bird and Magic Johnson. Shaquille O'Neal was never really interested and Kobe Bryant’s image imploded in the summer of 2003. If David Stern and Company were counting on LeBron James they would best be advised to continue their search.

Will corporate America be interested in talking to LeBron’s “Boys from the Hood”. A high school teammate taking over the business affairs of a 20 year old basketball player sends the wrong message. It suggests LeBron James is much more interested in hanging out with his high school buddies, then he is the advice and guidance two NBA established NBA agents who committed the time and the effort to ensuring LeBron James would make the right business decisions offered him.

It sends the worst possible message about where LeBron James headspace is. It will cause the current roster of companies he endorses to take pause, except one, Nike the company Maverick Carter has spent the last two years working for. It’s well worth considering if Nike and Carter are not in a conflict of interest position in regard to the decision James has made to drop the Goodwin brothers in favor of an employee (Carter) of the biggest product he endorses.

"LeBron as the immediate phenom was a benefit to both Aaron and LeBron," said Sonny Vaccaro, a veteran shoe company executive familiar with negotiations with James' agents in the ESPN report. "What is happening now is just a sign of our times, because everyone wants to be with and grow a company or business with their own people. This was the natural offshoot. It's not like this is an illegitimate group that is raiding the coffers."

Carter is "the ultimate young people person," Vaccaro said in the ESPN report, and he will be afforded ample time to learn the ropes of the business since most of James' endorsement deals are done.

The well respected Vaccaro’s comments aside, The Akron Beacon Journal reported that Def Jam Recordings has taken an interest in James, and James is reportedly near an agreement with McDonald’s. McDonald’s will be a true litmus test for Carter. He’ll have to deal with one of the world’s biggest companies, who up until this week had been negotiating with the Goodwin brothers in what is likely a contact that could be in excess of $15 million. McDonald’s could move forward with the groundwork laid by the Goodwin brothers, they could take advantage of Carter’s inexperience (and negotiate a better agreement suiting their needs) or they could walk away from LeBron.

What happened to the Goodwin brothers happens everyday to sports agents. In a highly competitive industry where it’s a take no prisoner mentality, losing star clients comes with the territory. As an agent you often feel ‘violated’ after delivering so much for your client only to realize that another agent is going to benefit from what you’ve accomplished.

The good news for the Goodwin’s the have proven themselves under the toughest of circumstances and have added several major names to the list of NBA players they now represent: last year's No. 1 pick, Orlando Magic forward Dwight Howard, as well as Boston Celtics guard Gary Payton; New York Knicks guard Jamal Crawford and forward Shareef Abdur-Rahim; and Portland Trail Blazers guard Damon Stoudamire. The Goodwins also are representing University of Washington junior guard Nate Robinson, who is expected to be a late first- or early second-round pick in the upcoming NBA draft.

As for Lebon James new team of Maverick Carter and Randy Mims they can be excited they are the ones with the golden goose, but they should realize if LeBron was quick to drop the agents who negotiated agreements in excess of $100 million for him, job security better not be foremost in their planning.

For SportsBusinessNews.com this is Howard Bloom. Sources used in this report, ESPN.com’s Darren Rovell