How Agents Make Money Out Of Rookie Contracts

September 26th, 2014

(originally posted elsewhere) The general rule for agents is that their earnings off of negotiated player contracts are capped at 4% of the player’s salary. Indeed, 4% is an assumed amount unless otherwise agreed upon, as outlined in section 3(B) of the Standard Player Agent Contract: If the Player receives compensation in excess of the minimum compensation applicable under the CBA for one or more playing seasons, the Agent shall receive a fee of four percent (4%) of the compensation received by the Player for each such playing season, unless a lesser percent (%) or amount has been agreed to by the parties […] In practice, this 4% is rarely deviated from. 4% is the norm, and rarely is it any different, especially in contracts involving the more powerful agents. There was an intriguing case involving Antoine Walker and agent Mark Bartelstein some years ago, in which Bartelstein had agreed the fairly unusual concession upon Antoine’s signing of a contract with Atlanta of lowering his standard fee from 4% at the time of signing to 3%, at the player’s discretion, if it was felt that Bartelstein ‘wasn’t doing a good job’. (The case went to arbitration over a disagreement over quite what that phrasing meant, and of how much Walker had to pay him. It was not in dispute that Walker owed Bartelstein, but merely how much, based on the arbiter’s findings of whether Walker was entitled to pay only 3% or not. Bartelstein won the case and was awarded a judgement of $671,373.) But this case stands out for its novelty, and is certainly not par for the course. However, the same handbook adds a few other criteria. In section 3(A) immediately preceding the previous paragraph, it states this: If the Player receives only the minimum compensation under the NBA-NBPA […]