IN MY VIEW: Player Agency By Numbers
First published on Running Rugby.
Recruitment and retention of rugby talent has become a significant and valuable part of professional rugby union.
Premiership rugby clubs claim to have spent collectively £2.5m in agent fees each season. It’s a round number that conveniently sits at 5% of the £4.26m wage bill allowed by the salary cap multiplied by 12 clubs.
On a similar basis, it is fair to assume that the Celtic Pro12 clubs represent at least another £2m in fees each year. There may be another £0.5m accounted for by agent activity in lower leagues, but the activity is much less consistent and hence harder to estimate.
That’s potentially £5m up for grabs by individuals and companies who guide the movements of the best players in the UK and Ireland. That seems like a ripe harvest until you compare it to the record £96m paid by Premier League football clubs to agents last year.
The RFU introduced an agent registration scheme four years ago that gave us all a clear view of those operating in the market place for the first time. An enthusiastic response saw the number registered on the scheme soar to over 130 individuals, some acting in groups and an equal number acting alone. That number has shrunk to under one hundred recently as the bar for entry has been adjusted and business expectations have flattened.
Premier Rugby Limited (PRL) claims that just five companies represent half of their collective costs. I’ve been working as a rugby agent for more than a decade, and I would hazard a guess at those five being: Essentially, Top Marque, Big Red, ABC and Phoenix.
The UK and Irish markets do not exist in isolation and many of the higher value signings come from the southern hemisphere. There is a directly comparative movement of agents’ fee value – often a 50% share – to a SANZAR agent who represents the particular player but does not have the contacts to place him at a club in Europe.
Equally, player export from these shores (to France for example) often comes with a similar extra cost and may not be as lucrative as it first appears to the agent. A UK or Irish agent may receive a greater fee if his players stay at home on a lower salary than splitting his earnings with an overseas associate.
The average player salary has dipped since the economic collapse of 2009. Estimates point to a Premiership average of around £65k per year. However, there are very few players who earn the mean. There are likely to be three or four players at each club over £200k with more than a dozen first team squad members at some clubs on less than £25k. An agent earning a 5% fee would need a host of players at the lower end of the pay scale just to pay his bills.
Recruitment of player clients has become very competitive. A 19-year-old academy player will appoint an agent these days, although it’s arguable whether he needs one until his value is a matter of negotiation and that only tends to happen when he has contributed to the first team squad.
But – like the clubs – the agents are keen to sweep up potential talent even if there is a high degree of “wastage”. The trend has been for young “Jerry Maguires” to hang out hopefully at Monday night games looking to fuel the ego of an aspiring pro or their parents. Inflated expectations – and ultimate disappointment for most – may be an ugly side-effect.
Does a larger agency represent better value for their clients? There’s certainly an entry level of experience as well as quality and quantity of clients that a prospective player should be wary of. “How valuable is this guy’s time and how much of it can he afford to spend on me?” are the two key questions.
Shared market information is the currency of the trade. A group of two or three individuals co-operating with each other is no bad thing. But what happens when those agents have players of similar qualities and values vying for the same jobs? And that’s bound to happen when three or more agents get together. Arguably, most of the economic benefits of a larger agency are for the company to enjoy more than the player client.
There are a few agencies earning well from off-field commercial opportunities. But they are as few as the players who attract all the attention. Each international side is likely to boast two or three “go to” or “marquee” players who might expect to earn in excess of £50k each in media, sponsorship and events. The total spend in UK and Ireland on off-field activity for rugby union players may well be less than £1m. At an industry standard 20% fee, that’s £200k in the agents’ pocket – only one twentieth the size of the value of club contracts.
Dave Williams has represented players for 13 years and runs Big Bug Sports. He also owns and manages runningrugby.com.
By Dave WilliamsDate published: 23 December 2013