Penn State Athlete Unhappy With Agent Decides to Open Up His Own Shop (While Still Playing!)
In-depth breakdown of the Penn State situation and how much money agents can make from NIL deals.
For new subscribers, I like to take interesting sports business stories and break down the money behind it and analyze what’s really going on. Today’s post is the perfect example.
Ever since NIL went live I’ve been curious as to how college athletes feel about agents. It seems as though I’ve finally gotten some answers.
Penn State super-senior quarterback Sean Clifford announced on Monday that he is launching his own agency, Limitless NIL, to represent college athletes and help them maximize their endorsement opportunities.
So far the agency has 3 clients:
Penn State safety Ji’Ayir Brown
Penn State women’s basketball player Anna Camden
Kentucky tight end Brenden Bates
But why did Clifford launch an agency while he’s still playing?
Apparently his idea came from bad experiences with agents last year. He made more than $100,000 but wasn’t pleased with the assistance (and probably the fees as well).
So what is the goal of Limitless NIL?
“It’s the agency that I was looking for that I couldn’t find,” Clifford told ESPN. “It’s for the players, by the players. I wanted to do something to leave even more of a legacy than just on the field.”
Ok I can see where he’s coming from…
But I decided to talk with two agents and hear what their perspective on the situation is.
Agents Opinion on Limitless NIL
Both wanted to remain anonymous.
NIL Agent #1:
“Sean started his own agency because he realized he wasn’t making nearly as much money from NIL as he originally thought he would. He needed to bring in other people to boost his own pockets and image.”
NIL Agent #2:
I think it’s really cool to see a student-athlete being innovative in the field and I wish them the best… All it really comes down to is whether or not he’s going to be willing to put in the effort, which is obviously tough given the rigor of a student-athlete’s schedule.
Both agents view Clifford as competition — and also the fact that being an agent is a full-time job, which might make it kind of hard for Clifford considering he’s still in school and playing football.
Before I break down the financial implications and profit potential from an NIL agency, here are my thoughts:
The Potential Is There (Maybe)
I think Sean is smart for going down this path, as in 1 years time, he will most likely be retired from football and ready for the next phase of his life.
Having two seasons under his belt in the NIL era gave him an array of unique experiences:
dealing with agents
talking with collectives
negotiating with brands
discussing pain-points with teammates
building an agency
Most student-athletes (especially ones at Penn State) would probably prefer to work with someone like Sean and his agency over outsiders.
Because of the familiarity, accessibility, knowledge, and most importantly the trust.
Sean might have a million dollar agency on his hands by the time he graduates, but the only question is if players are willing to work with him — knowing he’s still playing.
If I was at Penn State, I would be uncomfortable having another player in the locker room know all of my business dealings, while also earning a percentage of my money.
If I was at another school, I wouldn’t like the fact a current college athlete is getting 15% of my deals.
I don’t know who Sean Clifford worked with before, but if they did their job better then he wouldn’t of had to create his own agency to begin with.
Earlier this year, former Ohio State QB Cardale Jones tried to do something similar and his agency hasn’t turned out to be as successful as people thought it would.
Something else to note…
Bigger agencies will throw the war-chest at Clifford’s potential clients and do everything in their power to prevent Sean from taking away their business. Does he have the time and resources to compete?
If I was Clifford, I would take on a few clients at Penn State and then put the rest of my attention towards signing the top high school players.
This will put him in a position to negotiate with NIL collectives, which will entail the largest deals.
15% on a $1 million contract is $150,000.
Which actually leads me to my next point.
How Much Do Agents Charge?
Sports agents generally receive between 4-10% of an athlete's playing contract, and 10-20% of an athlete's endorsement contract.
But isn’t name, image, and likeness only endorsement contracts?
But what NIL collectives are doing is truly a contract, not an endorsement.
So how will agents decide to charge athletes?
Is it the 4-10% or the 10-20%?
My guess is that agents will try to get as much as they can. They will state that NIL collective deals should be classified as endorsement contracts (which legally is true).
This would be a huge fee to athletes: $150-$200k on a $1 million dollar deal.
However, most deals with NIL collectives are technically contracts (disguised as endorsement deals). Insider sources have told me that most of these deals are structured similarly to how a pro athlete’s contract would be.
Come to school at _____ and we’ll pay you $250,000/yr for 3 years with bonuses if you win the _____ championship and score _____ touchdowns in a year. You must attend 2 charity events a year and transferring will void the contract….
Athletes (especially star players in high school or the transfer portal) need to be able to rectify with their agents that NIL collective deals are contracts, not endorsements (5-10% in fees is up for grabs).
There are a lot of opportunities for everyone thanks to NIL. But keep in mind, a lot of the money is being made on the management side, not the agency side.
Stay smart out there — agents and athletes alike.
Yesterday, Kentucky basketball player Oscar Tshweibe met with Senator Mitch McConnell in order to get the Senator to help push for the changing of federal immigration law to allow foreign college athletes to participate in NIL deals.
Earlier this year, Tshweibe (Democratic Republic of the Congo) was given the green light to start signing NIL deals after months of legal battles.
But even cooler…
After receiving his first deal, he flew his mom from Africa to the United States to watch him play.
His agent, Nate Conley, revealed that his client already has a multi-million dollar offer on the table if he returns for the 2022-23 college hoops season (amateur sports don’t exist anymore in case you were wondering).
I expect to see him back in a Wildcat uniform next year — with his pockets a little fatter. Good for him, he’s earned it.
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