The Score: Kelley Drye Snags NFL Stars with Agent Hires
Working at a large firm, rather than being out on his own like many sports agents, allows Bakari to offer his clients a wide array of legal services. One of the reasons Bakari believes many NFL players and those in other sports find themselves in financial straits is an over-reliance on traditional agents for "jack-of-all-trades" advice, which doesn't help them deal with complicated legal issues like the "jock taxes" that can affect earnings for those playing in certain states.
"If a player comes to me to help him on his first contract, and he’s also in the process of getting married, I can send him down the hall to our trusts and estates or tax lawyers," Bakari says. "Many of these guys go broke after a divorce—they don’t have prenuptial agreements."
While at Dow Lohnes, where Bakari made partner in 2010, the same year fellow lawyer-agent Whitney left his own solo practice to join the firm, the sports group held an annual retreat for clients to help teach them the business skills necessary to succeed off the field.
Sports Illustrated wrote about Dow Lohnes’s retreat last year, and over the past few years there has been an increased focus on the lives of current and former NFL players. In part, that’s been due to a high-profile suit against the league by hundreds of retired players, who claimed the NFL looked the other way by failing to inform them about the potential long-term consequences of concussions and other forms of head trauma.
Earlier this month, the NFL and its lawyers from Paul, Weiss, Rifkind, Wharton & Garrison reached a $765 million settlement in the consolidated concussion cases thanks to the mediation efforts of Irell & Manella litigation partner Layn Phillips. The settlement sum will reach nearly $1 billion when accounting for the roughly $200 million in fees for plaintiffs’ lawyers led by Seeger Weiss that the NFL has also agreed to pay. (The league, which discloses its own outside legal fees due to its status as a registered nonprofit, will also likely pay a tidy sum to Paul Weiss.)
None of Bakari’s clients were part of the concussion litigation. When asked about the settlement, which has been criticized in some player circles, Bakari credits DeMaurice Smith, a former partner at Latham & Watkins and Patton Boggs now serving as executive director of the NFL Players Association, with making player safety a "paramount issue" and putting a greater emphasis on boosting benefits. Smith has also put into place new rules regulating how agents can recruit potential clients.
The NFLPA examined the recruitment of New York Giants wide receiver Victor Cruz by the sports agency launched earlier this year by Shawn "Jay-Z" Carter and industry giant CAA—a union that upset many NFL agents—before clearing the rap mogul of wrongdoing in late May. (Kimberly Miale, a registered NFL player agent and former associate at Boston’s Heifetz Rose, has been hired by the joint venture called Roc Nation Sports.)
Other NFL agents doubling as financial planners for their clients have come under scrutiny in recent years due to potential conflicts of interest, while some agents have been given prison terms for defrauding their former clients.
Nonetheless, the sports agent business remains a highly competitive field—Bakari says the most common Jerry Maguire-esque misconception about agents is that they're all about the glitz and glamour of the red carpet—even though the profit margins in negotiating nonguaranteed NFL contracts remain low. The maximum fee an NFL agent can charge for negotiating a standard contract is 3 percent and for other types of contracts it can be a mere 2 percent. (As noted by former agent Andrew Brandt, who last year took a position at the Villanova University School of Law, those fees are payable over the lifetime of a players' contract with agents frequently undercutting one another to sign new clients.)
At a large firm, Bakari has the option of hourly billing, and he hopes that the platform provided by Kelley Drye will help him expand his practice into handling other matters for players not subject to any fee restrictions. He wants to hook up his NFL clients with Kelley Drye’s robust advertising and marketing practice, which can put them in touch with companies that pay top dollar for celebrity endorsements. (Commissions for marketing deals can range from 15 to 30 percent.)