Turmoil in the football division at Creative Artists Agency (CAA), the sports and entertainment management agency that has $5.6 billion in sports contracts under management and was recently rated the No. 1 most valuable sports agency, could impact market trends and lead to opportunities for other firms.
Forbes’ Darren Heitner has suggested that the unprecedented shakeup at CAA indicates that agency will be “at least partially dismantled.” With a such a big player in flux, agents and clients will be closely monitoring the representation market for new trends.
CAA’s bread and butter is its football division with $2.8 billion contract value under management, more than all sports of any other agency. But its position is no longer certain with the termination of agent and co-head of football Ben Dogra in early November. Though the reason for Dogra’s release has not been publicized, it has been widely reported that the termination was for cause.
Now, a Fox Sports report indicates that the other co-head of football, Tom Condon, may be leaving CAA for Roc Nation, Jay-Z’s growing sports agency that has retained an exclusive partnership with CAA. Condon denies the report.
Whether or not Condon is leaving, the implications for CAA and the industry are staggering. This uncertainty comes barely two months after a major cash infusion in the agency from TPG Group. The investment group’s 35 percent acquisition for $225 million to $250 million, combined with a previous ownership stake, makes it the majority owner of CAA.
With significant financial backing, industry observers predicted that CAA would be looking to buy smaller agencies to grow its client roster as well as marketing groups such as Infront Sports & Media. The sports representation market is cyclical, with agents leaving major groups to start their own firms while established agencies look to make strategic acquisitions. CAA’s cash infusion seemed to indicate that the industry was preparing to go through another wave of acquisitions, with CAA Sports Co-head Howard Nuchow admitting as much: “We are, 100 percent of the time, looking for strategic fits for us.”
CAA’s precarious position also provides smaller shops with significant opportunities. Athletes are averse to agent instability – the story of NHL player Jack Johnson’s bankruptcy reminds us just how important reliable representation is – and some of CAA’s clients may look elsewhere. While small agencies don’t have the frills or clout of powerhouses such as CAA, they can provide athletes with more individualized representation and avoid political and financial gamesmanship.
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