Players need good agents, period

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At a time when a rumor is making the rounds that a prominent member of the media was unofficially giving cornerback Richard Sherman free advice on his negotiations with the 49ers (Sherman may have gotten his money’s worth), I’m prepared to give all players free advice on this topic. (And they’ll definitely get their money’s worth.)

Here’s the advice: Hire a good agent.

Players who think they can save a few bucks on the commission by simply hiring a contract lawyer to spend 30 minutes reading the final document simply don’t understand what the job entails. The job entails maximizing the player’s take-home pay, taking into account non-monetary factors like where the player will be living, who he’ll be playing for, and his chances of individual and team success on that roster. Because those factors are unique to every player, the following observations apply only to the goal of putting the most money in a player’s pocket. Because Sherman’s deal is the most recent player-negotiated contract, these observations are tied directly to his situation.

1. The $2 million per-game roster bonuses.

Over the past decade or so, per-game roster bonuses have become an important part of the NFL player compensation landscape. It’s a pay-as-you-go term, giving players money based on their ability to suit up and play in a given game.

In most cases, the per-game roster bonuses total less than $1 million. Aaron Rodgers, for example, has per-game roster bonuses totaling $600,000 per year. Last year, his broken collarbone resulted in more than $330,000 in lost income.

Sherman’s contract carries a whopping $2 million in per-game roster bonuses. Few players have ever had that much ($125,000 per game) tied to being on the game-day roster. It’s believed that the 49ers sold Sherman on such a significant amount by pointing out that Colin Kaepernick had the same amount of per-game roster bonuses.

That’s accurate. But current 49ers quarterback Jimmy Garoppolo, the highest paid player in NFL history, has only $800,000 in annual per-game roster bonuses.

Assuming that a good agent could have at least cut that amount in half, with the balance becoming base salary, Sherman would have been assured of earning another $1 million not tied to the number of games he actually plays.

2. The negotiations with other teams.

It’s undeniable that this deal came together quickly, with Sherman visiting the 49ers facility a day after being cut by the Seahawks and not leaving. If Sherman had a good agent, that agent could have been working the phones with any and all other interested teams in an effort to find out whether they’d offer as much or more than what the 49ers offered. Even if Sherman had still signed with the 49ers, a good agent could have squeezed better terms out of the 49ers if the agent had been able to persuade them that other teams were seriously pursuing Sherman, with competitive terms.

3. State income taxes.

Let’s assume the Lions (who were very interested in Sherman) would have given Sherman the same deal the 49ers did, with a base package of $7 million for 2018, $2 million in per-game roster bonuses, $1 million in playing-time incentives, and a $3 million incentive tied to making it to the Pro Bowl (which actually could be the All-Pro team). Michigan has a tax rate of 4.25 percent. If Sherman had unlocked all incentives, he would have paid $552,500 in Michigan taxes. In California, where the tax rate for the highest earners is 13.3 percent, he’ll pay $1.729 million.

That’s a difference of $1.117 million. A good agent would have pointed that out to Sherman. It’s unknown whether anyone did. It’s unlikely that the 49ers did.

4. The upside of making it to the Pro Bowl.

If Sherman makes it to the Pro Bowl, a total of $16 million in salary for 2019 and 2020 becomes guaranteed. That’s fine, but a good agent likely would have requested a voiding of the final two years of the deal based on making it to the Pro Bowl, allowing Sherman to parlay a Pro Bowl season into much more on the open market than a total of $16 million guaranteed over two seasons.

5. The 49ers’ reputation.

49ers executive Paraag Marathe has a well-earned reputation as being a shrewd negotiator. Every good agent knows this. Most players may not. Whether or not Sherman knew this isn’t known. Regardless, the final numbers on the deal are currently expected to show that Marathe negotiated a team-friendly deal.

6. The bottom line.

Players are tempted to negotiate their own deals because of one thing and one thing only: They don’t like writing checks to their agents. If, like state and federal income taxes, the fees were deducted from the players’ game checks, the players may be less salty about paying their agents. (Anyone who pays quarterly taxes out of money already earned understands this dynamic all too well.)

But it’s not about the check the player writes. It’s about the check the player gets. Sherman has a practical guarantee for 2018 of $7 million. Under the maximum fee of three percent, he would have paid $210,000. Thus, a good agent would have had to negotiate a base deal worth $7.21 million for 2018 to pay for the agent’s services.

A good agent may have been able to get Sherman a base package of much more than $7.21 million. Along with the ability to get back to the market next year. Along with a more favorable state income tax situation.

Sherman made his choice, and no one expects him to admit that he may have made a rash decision at an emotional time without the best advice possible. Other players, who may be under the misimpression based on the erroneous initial report that Sherman is getting a firm $13 million per year, need to realize that the commission they separately pay is worth every penny — assuming the money is being paid to a good agent.

Here’s the part where some of you will bang out comments suggesting that I’m making these points in order to help out agents. Before you do, you’re absolutely right. I am.

I’m also trying to help players. Good agents make money for themselves and more money for players. In turn, this takes more money out of the coffers of billionaires who would love nothing more than to see this still-isolated quirk become a trend, and for that trend to then become the norm.

74 responses to “Players need good agents, period

  1. Give me a reason to read all that … You must believe a player that can learn an NFL playbook can’t possibly be intelligent enough to have an entirely separate skill set of contract understanding, contract negotiation, and most of all a total understanding of what that player is expecting.

    You do realize players aren’t just dumb jocks (as stereotype would have) … Tell us how you really feel about Eric Winston. Do you think Eric would be able to negotiate a contract at the player level?

  2. “Michigan has a tax rate of 4.25 percent. If Sherman had unlocked all incentives, he would have paid $552,500 in Michigan taxes. In California, where the tax rate for the highest earners is 13.3 percent, he’ll pay $1.729 million.

    That’s a difference of $1.117 million.”

    I think that difference is overstated. Half of Detroit’s games would have been played outside the state of MI. So half of his per game checks would have been taxed in other states. Michigan’s rate is fairly low compared to other states.

  3. And how much would Sherman have had to pay said agent for things you just told him for free? What makes you think he did not have the same advice earlier (also for free) and decided he is fine with the potential 39mil in SF? How come I get the feeling you are more interested in helping agents get work rather than other players with this piece?

  4. silverhornet says:
    March 11, 2018 at 4:18 pm
    “Michigan has a tax rate of 4.25 percent. If Sherman had unlocked all incentives, he would have paid $552,500 in Michigan taxes. In California, where the tax rate for the highest earners is 13.3 percent, he’ll pay $1.729 million.

    That’s a difference of $1.117 million.”

    I think that difference is overstated. Half of Detroit’s games would have been played outside the state of MI. So half of his per game checks would have been taxed in other states. Michigan’s rate is fairly low compared to other states.

    ________

    And some of his games would be played outside Calif so his taxes of $1.7mm wound be lower.

    But I agree players not using agents are being penny wise and pound foolish. Agents bring leverage which brings more competition and higher salaries.

    I don’t understand the comment about owners getting richer. With a salary cap and minimum spending don’t they pay the same total amount of salaries.

  5. OKAY … you said it enough.

    Tell us who the “Good Agents” are, so we don’t pick them as our agent.

  6. I’m sure Sherman is smart enough to work his own contract. It’s the fact that agents spend all of their time negotiating contracts, working over teams and have experience in getting the best price. That’s the advantage.

  7. If Richard Sherman got screwed, all I can say is that it couldn’t have happened to a more deserving guy. He keeps reminding everyone that he went to Stanford but I haven’t seen yet any evidence that it did him any good.

  8. Plus, he’s from California. He may have been willing to sacrifice a little money to be where he wants. It’s not always about the money
    Florio.

  9. Soft argument in my opinion. May be true from some players. Sherman is a CA kid, went to Stanford. He has made more than $36m playing football and I’m sure that number is higher when you factor in endorsements. He is not sweating saving $210,000.

    Maybe he felt the situation in SF was a good fit and that DET is a team going nowhere. If he pressed for more, they could turn their sites to other CBs in the draft or FA?

    Lastly, many professional athletes in the Bay Area have the opportunity to invest in tech and other industries that many players outside this area do not get a chance to do. It is compelling to some. Patrick WIllis for example will do very well post his playing career.

  10. States have NO right to tax other teams players. It should all be based on where the team is located and the checks are written. BAM. Over. If states don’t recognize that then screw em. Lawyers make laws that make you need to hire a lawyer to understand the laws the lawyers wrote so they can get their cuts. It’s all b.s.

  11. Florio has been a Seahawks’ homer forever. He’s not concerned for Richard Sherman. He’s upset that Sherman will be lining up against his favorite team, and that the Seahawks’ “window” has slammed shut.

  12. Florio is all about spending other people’s money and that seems quite typical seeing as how he both a lawyer AND a liberal. The cap money is a finite thing that changes every year. What Florio refuses to acknowledge is that every dollar given to player x means 1 less dollar player y and player z can get. You will only see him argue for one player at a time and only as a collective entity in general terms regarding CBA issues because he is all about the “us against the man” narrative. It is always “pay that man…and pay that man too” There is very little critical thought put into these arguments because he intentionally omits the factors that must be considered by every team in the league. This mindless mantra is getting old. Here’s a thought, maybe Sherman was actually happy/content with the deal he got. Would you rather be happy making $7M or miserable making $8? Bear in mind that Sherman has already made enough money that he can never work again and still live very comfortably.

  13. This entire post assumes that Sherman did not pursue any of the items his contract did not get, and/or that an agent would have. MAYBE THIS WAS THE BEST POSSIBLE DEAL he, or anyone, could have crafted. Also, the fact that you think there is even a chance that Richard Sherman didn’t consider the different state income taxes when it comes to contracts shows that this piece wasn’t grounded in reality.

  14. Yeah…I am not paying an agent to explain state income taxes to me. I have been faced with this discussion in my own career (strangely between CA and MI) and with all due, I didn’t need a recruiter to explain that 13.3 is bigger than 4.25. I already knew I didn’t want to live in MI, and I am assuming that Sherman didn’t want to play there either.

    Sherman went to Stanford. His contract could be worth more than he had with the Seahawks, but everyone is being real that he also may not come back strong from his injuries. Seems to me he is banking on himself and allowing the team to absorb less risk in the process. I wouldn’t have hired an agent either. And I negotiate for a living.

  15. Silly story. Players like Sherman who don’t use an agent like Sherman are not using them as agents however they are using attorney who are registered agents to negotiate the fine print.

    it’s a common practice in entertainment and sports to be able to pay an agent per hour vs a percentage of total earnings.

    to imply these athletes are clueless and missing the boat is ridiculous. Sherman is simply flexing his brand, which allows him to do this

  16. collectordude says:
    March 11, 2018 at 4:07 pm
    You think Florio wants to be an agent?

    =======================================

    No because if he wanted to his law degree qualifies him to do so and he’d probably be doing it.

    azcm2511 says:
    March 11, 2018 at 4:34 pm
    Spoken like a true lawyer…..the rest of us will never be smart enough to negotiate a good deal. Shakespeare was right.
    ================================================

    Or maybe it has more to do with being trained and experienced in the field. You probably take your car to a dentist to get fixed and and seek medical advice from a plumber though right?

  17. None of this is as complicated as Florio makes it out to be. If Dick Sherman and/or an agent hassled the Niners about the things Florio pointed out in this post, the overall contract value would obviously be less, if not much less than $39 million. Dick is taking a calculated risk on his health and ability to try to reach the incentives to earn an amazing amount of money for someone who is 29 and coming off the Achilles injury. It’s called risk/reward – you don’t need to go to law school to understand that.

  18. It would be satisfying if Richard Sherman became an agent once his playing career is behind him.

  19. The other thing that most people aren’t mentioning is that both John Lynch and Sherman went to Stanford, and are both DB’s. So, they may share a bond that is worth trading for a few extra bucks.

  20. Where was the article about how Jimmy G and his agent are idiots for not playing in Texas or Florida? How much is he paying in California taxes with an agent?

  21. Aren’t “good agents” the reason there are all these contingencies and clauses were added in the first place? It was a way to inflate the potential numbers of the deal to make themselves look good, even if a sizable portion of the overall contract would never be paid out.

    That same complexity that creates confusion only strengthens the argument that players need an agent. They’re even doing it now with the rookie deals which were supposed to be slotted and pretty boiler plate by questioning language, etc., like with Joey Bosa. Bottom line is agents care about agents, and if a player is comfortable with a deal they work out on their own, more power to them (just don’t turn around in a year and complain you’re being underpaid).

  22. or maybe he realizes the 9ers are on the way up and wants to stay in the same division to stick it to the seahawks for not letting him be a lifer. And he’s coming off an Achilles Tear so it’s not like he can ask for the best.

    and do YOU have a good agent????

  23. Michigan has a tax rate of 4.25 percent. If Sherman had unlocked all incentives, he would have paid $552,500 in Michigan taxes. In California, where the tax rate for the highest earners is 13.3 percent, he’ll pay $1.729 million.
    ______________________________________________________________________________________
    But, He would have to live in Detroit…

  24. I think this is more a case to forbid all the financial shenanigans going on, and make the compensation packages straight up and easy to understand.

    Everyone would be better off.

    Except, of course, the agents.

  25. MAYBE….
    Seattle cuts Sherman
    Sherman announces Seattle says they might want me back.
    Seattle mentions at what salary range they might want him back.
    Sherman maybe ponders, if not Seattle, where else might I like to play?
    Sherman is contacted by SF and other teams.
    Sherman maybe ponders, SF is my first choice other then Seattle.
    Sherman goes to SF and negotiates a deal with his first option and is maybe happy with the result.
    Sherman maybe concludes the SF deal/situation beats what Seattle would/could offer.
    Sherman maybe sees no reason to see if he can make more in Detroit (or anywhere else), as the money is not going to be that much different.

    Sherman maybe does need an agent. Period.

  26. You probably take your car to a dentist to get fixed and and seek medical advice from a plumber

    Some of us work on our own cars in most cases and do our own plumbing in all cases. I think if some players want to cut out the agent, good for them. Tedy Bruschi did it until he had the stroke.

  27. azcm2511 says:
    “Spoken like a true lawyer…..the rest of us will never be smart enough to negotiate a good deal. Shakespeare was right.”

    azcm2511 is alluding to Shakespeare’s line ”The first thing we do, let’s kill all the lawyers,” said by Dick the Butcher in ”Henry VI,” Part II. However, azcm2511 is misinterpreting it. Shakespeare was a monachist. Dick the Butcher was part of an attempted rebellion by Jack Cade, who wanted to put himself on the throne. Shakespeare was actually praising lawyers as bulwarks of law and justice.

    P.S. This item is the first time I ever heard that sports agents get 3%; I always thought the standard agent’s fee was 10%. The players are crazy if they’re not willing to pay 3% to a good agent.

    P.P.S. I’m not a lawyer nor an agent.

  28. “Save a few bucks” on a $39M contract is going to be approx $1.2M (give or take) with the NFL’s limit of 3% commission cap. Guessing Florio’s idea of a “few bucks” is a bit different than the average working man.

  29. Not all players need agents. It is public knowledge what other players are getting. All a player has to do is research and try to get a better deal. It is pretty simple. Of course there is the fact that a good number of players are illiterate and only made it through High School and College because they can play football. I guess most of these idiots need someone to negotiate for the.

  30. thetooloftools says:
    March 11, 2018 at 4:40 pm
    States have NO right to tax other teams players. It should all be based on where the team is located and the checks are written. BAM. Over. If states don’t recognize that then screw em.
    ————————————-
    The Supreme Court long ago declared that states can tax non-residents on income earned in the state as it met requirements of the due process clause so long as the tax imposed was consistent with the tax imposed on residents.

  31. So you’re saying we need more agents because they selfishly drive up market values in attempts to milk higher salaries that pay their fees, just so players can give them a percentage of their salary to do so?

    So how much extra salary cap would be available league wide for all the players if there weren’t these markups to pay for just because they’re told by the guys who get paid that they have to pay them?

    A lawyer DEFINITELY wrote this article. As if even a semi-educated man can’t look up state tax codes and decipher what number is bigger than another. “Maybe nobody pointed that out to Sherman” he says. Or maybe the Bay Area was Sherman’s first choice destination and wanted to be there regardless of the $1.117 mil that he may or may not have been able to negotiate for in Detroit with an agent. Maybe his first choice worked out exactly the way he wanted to and didn’t care one bit about Michigan’s tax code.

  32. This is what happens when you have a habit of sharing a bunch of ill informed opinions in front of a microphone and continuously remind people that you went to Stanford…you start to believe you are smart enough to negotiate your own contract. Sherman isn’t any smarter than the rest of the dim bulbs in the NFL, though the professional a–kissers at ESPN and other outlets would have you believe otherwise.

    He’s a great CB, but two Achilles surgeries in one off-season? Oh that’s right, John Lynch went to Stanford, so he must be really smart too.

  33. some baloney here. the owners will actually pay out MORE to players if agents are not involved. they pay out the cap as specified in the cba, no more no less. no agents and the players get it all without the agent skim. the players are actually negotiating against their team mates, not the owners. so if you want to make argument that they need an agent because their team mate has one, fine.

  34. TheWizard says:
    March 11, 2018 at 5:39 pm
    You probably take your car to a dentist to get fixed and and seek medical advice from a plumber

    Some of us work on our own cars in most cases and do our own plumbing in all cases. I think if some players want to cut out the agent, good for them. Tedy Bruschi did it until he had the stroke.
    ———————————————————————————
    Actually, I do my own dental work, although it gets pretty tricky using that little hand-held circular mirror at times. I still have the dental hygienist clean my teeth because I have a crush on her — I figure that any woman who has her hands in my mouth for an hour, well, it’s like we have a relationship.

  35. Standard agreement is 3% of contract value goes to the agent. They get paid nothing if you don’t get a contract. Too cheap to not use an agent.

  36. Richard Charmin has a serious injury, and there is no way of knowing how many games he will actually play in 2018. Therefore a big per game bonus is a good insurance against him not playing too many games. The money the 49ers save on the games he misses will go towards hiring a replacement. Even if he has a good agent, the 49ers may still want to put that in his contract. Ultimately it is the player, not the agent, who will decide which particular contract provision is acceptable or not.

  37. I will ask this question again.
    Do agents really do ALL of those things you listed Mike?
    Or do most agents just get the highest contract to get a higher commission?

    Why would an agent give a rats rear end about where a player lives?

    My guess is most agents do very little on the things you listed.

  38. Sherm is from
    1. California and his family will be near
    2. He is a well known player What he can get in commericals and endorsement is much higher in California than he can get from playing in Detroit where everyone one is fleeing.
    3. He signed with Seattles biggest rival and gets to play them twice a year
    4. With Garrapalo the 49ers have a chance to win
    5. He knows good and well teams like the Browns would have paid mad money for his services but then he’d have to play for teams like the Browns

  39. have the dental hygienist clean my teeth

    I’ve lucked out with an attractive hygienist too. At my age, a good dental cleaning is on level with sex anyway.

  40. Make millions of dollars and live in California, or make slightly more millions of dollars and live in Detroit.

    Yeah, I don’t think the guy that’s from California, and went to college right up the street in Palo Alto, was all that turned off by state income tax.

  41. Your game checks are taxed in the state the game is played. So only 9 or so games a year in California as a niner (8 home plus one Rams road game). Same for Michigan, 8 games under Michigan tax, 8 in other states with higher taxes.

  42. I was wondering why his contract seemed a little weird. I would have thought the #1 CB over the last 5 years would have received more guaranteed money considering his Achilles isnt the type of injury that is cause for concern. Players routinely come back from that. This article clears that up though, Sherman thinks he’s smarter than he really is. Good football player, smart but negotiating NFL contracts is a professional skill as well… especially NFL contracts. NBA contracts are more cookie cutter and he could have gotten away with it in the NBA. I like that he ended up in SF, maybe he has enough money and just wanted to stick it to the Seahawks twice a year?

  43. Sherman’s home is still in Seattle. Seattle has ZERO state tax. Sherman did good. He’s not some player who did not know the ropes. All this speculation about more money somewhere else. Sherman wanted to stay on the West Coast, near his family in LA. Sherman having graduated and played for Stanford already knows the SF area, so it’s no change for him really. Sherman knows better than anyone what’s best for Sherman. Good luck to you RS!

    Seattle

  44. Boy I really do hate agreeing with Florio, but I got to on this one. I have not seen any big player negotiated contract yet that was worth the paper it was printed on. I get that Richard was injured, and whatever he got was going to be incentive based, but this one looks like a loser unless S.F. gets the Richard of old. Now he may believe he gets there…….but don’t they all? Who watched his back in case the old Richard don’t live there no more?

    Sorry, the old thing about the lawyer who represents himself has a fool for a client, is not wrong. Richard may be smart being a Stanford grad……..smart rarely stops people from doing stupid things. Sometimes you need a professional, and yes they get paid very, very well for a reason. And don’t give me that crap about Teddy Bruschi’s doing his own………ever looked at it? Look it up, not that hard to find and it was pretty vanilla, and all the way back in 2008. A whole lot has changed since then. Doubt you could get someone now of his caliber for about 2 mil a year. The salary cap is a whole lot more complicated, and teams and players have no choice but to work within that framework.

    So pretty much if you represent yourself, no matter how smart you think you are or who issued your diploma, you are probably going to get screwed. Looks to me like Richard is not as smart as he thinks he is.

  45. Pretty sure that the difference in taxes from team to team is actually negligible, given that nearly half of all games are always played out of state, things even themselves out pretty well. for example, players in Detroit pay an effective tax rate of 46.1%, while players in Santa Clara pay an effective rate of 49.4%. When were talking about tens of millions of dollars, the difference is not negligible, but still, it is small enough to look over if you prefer the one team over the other. For example, you may want to stay on the west coast, where you grew up, where your family is at. You may want to play against your old team whom you felt disrespected you. You may see a young up-and-coming QB and great management and coaching staff that you are confident will be contending for championships for years to come. You also might be a Stanford grad smart enough to figure out what the average contract is for a player league-wide, and willing to bet a little bit on yourself.

  46. Worse than taxes is that the 49ers had no pass rush. I think CB would be more likely to earn all-pro and pro-bowl if he had a great pass rush.

  47. Listen to yourself. “Sherman could have earned more money that is not tied to the number of games he actually plays.”

    You think players are entitled to money without even setting foot on the field. Newsflash: players not making money for not playing is not a travesty.

  48. “I don’t think any agent in the business could have done a better job of negotiating this contract,” Sherman said. “As long as I’m content with what I’m making, nothing else matters to me.”

    – Richard Sherman

    “Richard came into the meeting with us having read all the contracts for all the top cornerbacks past and present,” Marathe said, adding that Sherman “studied our contracts and knew who we’d given real guaranteed money to.”

    – 49ers VP of Football Operations, Paraag Marathe

    Safe to say, Sherman also got his money’s worth from this column.

  49. Richard Sherman is a football player. These guys are not terribly smart by definition.

    Now, I’m sure he’s intelligent. But he’s obviously not smart.

  50. I never hear Sherman talk about going to Stanford, but the media mentions it quite a bit. It’s interesting how many folks are adamant that he couldn’t possibly be smart. I don’t think going to Stanford makes you smart, just like going to Harvard doesn’t make you smart. But I’ve never seen anything from Sherman to make me doubt he’s an intelligent guy.

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