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How 'Jerry Maguire' ruined the sports agency industry

Courtesy of Tristar Pictures

Twenty years ago Tuesday, the film "Jerry Maguire" landed in theaters. The story of a sports agent who was reduced from 72 clients to one after his revelation to be more honest and serve fewer clients was rejected by the big management company he helped found, was an instant hit.

It had all the elements of a perfect Hollywood plot. A flawed lead (Jerry); a competitor (agent Bob Sugar); someone to fight over (a full Rolodex of athletes including future No. 1 draft pick Frank "Cush" Cushman) and a love interest (Dorothy Boyd).

Factoring box office receipts into today's dollars, it was the second-highest grossing sports movie of all time, only behind the original Rocky, which came out 20 years before (1976). Just as impressive, "Jerry Maguire" earned 43 percent of its box office revenue outside the United States which is unheard of for a movie about American football.

And six months after the movie was released, its broadcast rights had been bought by Fox and the initial video release sold nearly 10 million copies.

Despite the fact that the film shows so many unflattering parts of the sports agent business (Jerry calls it an "up-at-dawn, pride-swallowing siege"), the film touched a nerve with high school and college students, including me. I was in my freshman year at Northwestern University. If we weren't going to make it as pro athletes, we all wanted to be sports agents.

"Jerry Maguire" opened our eyes to the game behind the game like we had never seen it before. Many of us loved every bit about it.

"I had gone to law school to become a sports agent and I came out in 1996," David Canter, a veteran agent who represents Baltimore Ravens safety Eric Weddle and New York Giants defensive end Olivier Vernon, among others, said. "The amount of people who wanted to be sports agents after the movie was insane, so many had fallen in love with the celebrity of it all."

Over the next five years, the full impact of what the movie inspired became clear. Five years before the movie, there were roughly 400 registered NFL agents. Five years after? More than 1,000 and that was even as the NFL Players Association more than doubled the fee to certify and agent.

Sure, businesses mature and more people were going to come into the business because players were getting paid more money. But the reality is "Jerry Maguire" completely screwed up the sports agent industry by providing an avenue paved with fool's gold.

It led to the first generation of kids growing up wanting to be sports agents, which led to more sports management programs.

In the early 1990s, there were few sports management programs, though notable ones at Ohio University, the University of Massachusetts and the University of Oregon. A decade later, there were more than 100 programs, including some programs that were starting online.

Industry insiders like Dallas Mavericks owner Mark Cuban panned the programs for the false promises they offered, including the fact that placement into the industry versus placement in other industries became virtually impossible.

"Sports management is new rocks for jocks," Cuban told the MIT Sports Analytics Forum in 2012, noting that he saw thousands of people with the degree applying for the same jobs, which came with little pay.

It didn't help that, at the same time "Jerry Maguire" hit theaters, "Arli$$," which featured Robert Wuhl as a sports agent, began its six-year run on HBO.

"Some of what happened to the agent industry would have happened without 'Jerry,' but definitely not as fast as it did," said Peter Schaffer, who has been a sports agent since 1988 and represents Cleveland Browns offensive tackle Joe Thomas and Denver Broncos running back C.J. Anderson.

The awareness provided by the film and the show led to big companies like SFX and Assante buying firms, which allowed agents to protect themselves from new blood in the business with big budgets that affected recruiting, and allowed the offering of jobs to family members and marketing guarantees. This kept the business from maturing because new, and perhaps better negotiators faced an uphill battle. It's why two out of every five certified NFL agents represents no players.

As the players got more guarantees, the money actually declined. Why? Because all of the competition spawned insanely low commission fees. What used to be a four percent fee on a contract was reduced, in some cases, by half. Some agents forced fees even lower in order to score big-name athletes. That means that the money on some of the deals would have had to have been four times as much, or more, to make up for the players' increasing demands for agents to take a smaller piece of their financial pie. Pretty soon, the athlete representation business didn't even make sense to the big acquirers, who eventually spit them out.

The joke of this is that "Jerry Maguire" wasn't about a successful agent. If you pay attention, you'll realize Jerry has to be broke, as his assistant and later wife, Dorothy (Renee Zellweger), revealed to Rod and his wife. In fact, Maguire's new business after leaving Sports Management International actually didn't seem to make a single dime.

Maguire receives a contract offer for Rod Tidwell from the Arizona Cardinals, a three-year deal worth $1.4 million (1997 base salary: $350,000, 1998 base salary: $450,000, 1999 base salary: $600,000), but he rejects it and lets Tidwell play out the final year of his contract so that he can become a free agent.

In order to make some cash to keep the business afloat, Maguire sets up Tidwell with a marketing deal (of which agents normally take 20 percent). But when Tidwell doesn't want to ride a camel for the local Chevrolet dealer and walks off the set, Maguire doesn't get his money.

In the final minutes of the movie, Tidwell is with Roy Firestone on ESPN's "Up Close" when Firestone informs him that he has been given a four-year, $11.2 million deal with the Cardinals, but the film ends without us seeing Tidwell sign it.

"Jerry spent all this money bankrupting himself by flying around the country traveling to see Rod at games," Canter said. "And then he gets this big contract at the end. So many didn't realize, if you do the math, and Jerry takes four percent on the deal Rod got, he winds up with a gross of $84,000 a year. Think about that."

When the movie opened, CNN aired a piece on the film and discussed its possible effect on the industry.

"The movie will focus more attention on sports agents," correspondent Sean Callebs said. "But some wonder whether that's a good thing."

It wasn't a good thing. The funny thing is it actually wasn't Jerry Maguire's fault. He tried to warn us how difficult this business was. We just didn't listen.