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Thursday, May 29, 2008

Stephen A. Smith Condones the "Street Agent Payola" System

Click here and read it for yourself.

I can't tell whether he really believes what he wrote or whether he's trying to gather attention and revive a slipping career. I'll give him the benefit of the doubt, though, and say that he really means that people should turn a blind eye toward agents paying street agents to funnel money to star athletes with the hope of landing them as clients, because the kids usually are poor, they sometimes need money for theirs or their families' well being, and, yes, because it's a multi-billion dollar industry so what shouldn't these kids get something to wet their beaks?

It's hard to know where to begin, but to start with ethics, corruption, doing the right thing, taking the road less traveled, resisting temptation, building character, trying to get through without owing something to the wrong people (who could hurt you literally and figuratively). What Stephen A. overlooks is that for every O.J. Mayo, there are dozens of kids who get caught up in a vortex of corrupt behavior that can spiral out of control and have them make terrible decisions. Such as: where to go to high school, which AAU team to play for, what shoes to wear, what money to take or not to take, and many more. Mayo's high-school history was checkered to say the least, but he was smart enough and good enough to figure out a path that now leads him to the NBA lottery.

Most kids aren't that smart or that lucky, and the agents and street agents are praying on their hope. Make no mistake about it, many these folks will say and do almost anything to get a client. It's just a business to them, plain and simple, and the money that they dole out is an investment. They don't care about the kids, but they do care about a return on their investment.

Here's a possible business model for Joe Agent. I work in Los Angeles, I'm starting to build a book of business after having apprenticed for someone else, and I have a $150,000 bankroll per year (my wealthy uncle loves me and supports my endeavor). I figure I'll spend $15,000 per on each of ten high-profile kids around the country. Some will take the money and screw me, some will remain loyal, and perhaps one or two might pan out, mindful that I need to watch and coddle them not only through some of their high-school years, but also through their college years. Oh, yeah, they'll get a scholarship to college because of their talent, but I'll take care of their needs. And, if they hit the first round, well then I'll get my 5 to 10% of their three-year deal and then, if they succeed, I'll get the same percentage off the six-year max deal that they'll sign thereafter. Say that deal is worth $105 million to the player, well, then, do the math.

Of course, there can't be that many Joe Agents, because the return on investment for say 20 Joe Agents spending $150,000 per year can't be that great for each of them. Well, that's probably okay, because not every business is destined to succeed. In fact, it's probably the case that some of the agents with the best books of business dole out even more money to lock down the top talent.

It's an interesting way to spend an adult life, spending your money on 17 year-olds with an overdeveloped sense of entitlement and their relatives, who cultivate expensive tasts fairly quickly and frequently. And without any guarantees that at the end of the day they'll stick with the agent who greases them for five or more years. And, of course, you have to deal with the street agents, too. Do you give them a Form 1099 for their work? Or are they on your payroll and do they get W-2's? How do you book the cash payments? As business expenses? Probably.

But in Stephen A. Smith's mind this is okay because payoffs have always gone on somewhere, we shouldn't sit in judgment of relatively poor kids, and because given how much money is made, they deserve their share. Given how wonderful the system is, that's compelling reasoning, isn't it?

Thanks, ESPN the Magazine, for giving a forum to this controversial viewpoint.

And then ask yourself the question: are you part of the solution or part of the problem?


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