How Do Agents Make Money?
There are many factors that go into how much money a sports agent can make. I touched on the various ways that agents can make money in part one of this series. If you didn't get a chance to read that yet, you can revisit that first.
As a refresher, an agent can generate revenue for and from their clients from a handful of different avenues. But for now we are just going to dive into the commission made from playing contracts.
We will split this lesson into three parts - NBA commission, international commission, and source of commission.
Part One: NBA Contract Commission
The rules that NBPA player agents need to abide by are discussed in both the NBPA Bylaws and also in the Collective Bargaining Agreement (CBA). The NBPA Regulations Governing Player Agents are pretty self explanatory. These are the set of rules that were designed to protect players' rights and monitor agents. The CBA is a contract between the NBPA and the NBA, which dictates the rules for player contracts, trades, salaries, anti-drug policies, revenue distribution, the NBA Draft, and much more.
A NBPA agent can charge a fee between 2% and 4% of their client's contract.
--> If a player is making a minimum salary, the agent can charge up to 2%
--> If a player is making above the minimum salary, the agent can charge up to 4%
Part Two: International Contract Commission
The rules that FIBA agents need to abide by are discussed in the FIBA Bylaws. Similar to the function of the NBPA Regulations and the CBA, the FIBA Regulations Governing Player Agents are the set of rules that were designed to govern all activities in the international transfer of players or coaches. These rules cover the rights, duties and sanctions for players, clubs and agents.
A FIBA agent may accept payment on behalf of the club which does not exceed 10% of the value of the contract.
Part Three: Source of Commission
It's important to note the difference between who actually pays the agent fee for NBA contracts and who pays the agent fee on an overseas (FIBA) contract. As mentioned above, the agent fee here in the states comes out of the NBA players salary.
If a NBA player is making $1,000,000 (which is above the league minimum), the agent can receive up to $40,000. This would come directly from the player.
The agent fee overseas is different. That fee comes from the team in addition to paying the players salary.
If a player is making $1,000,000, the agent can receive up to $100,000. In this scenario, the club would pay the player's salary (typically in 10 monthly installments), and on top of that, they would also pay the agent directly.
If you like what you've been reading, and still want to learn more, check out the Sports Agent Educational Journey!
During "The Sports Agent Educational Journey" You Will:
Understand the basic framework of a day in the life of a sports agent
Comprehend the business models and strategy of sports agencies
Learn where to go and how to apply for your agent certifications
Identify where your skill sets can add value to an agency
Be given access to tools used by current sports agents
Differentiate yourself from other aspiring agents
and much more...
If you missed the previous parts of this series, check out the links below: