“I’ll Be Representing Myself” – Are Agents Becoming Obsolete?
In today’s newsletter:
- “I’ll Be Representing Myself” – Are Agents Becoming Obsolete?
- Fun Fact
- Global Recession Fears, The Housing Market, and Coffeezilla’s Legal Woes
- Are the Shepherds for Sale or Not? New Book Creates Conflict Among Christians
Harrison Butker, the top-tier NFL kicker for the Kansas City Chiefs (and something of a Christian celebrity), has just secured a record-breaking 4-year contract extension worth $25.6 million, making him the highest-paid kicker in history.
Yet that isn’t what is most amazing about the story.
Harrison Butker represented himself in the negotiations. He had no agent negotiate the contract for him, and he will be paying no agent fees.
Now, it’s worth mentioning that Harisson Butker still has a booking agent for speaking engagements, and it seems that he also has an agent who handles brand endorsements – something sports agents in particular often do. But with his historic salary agreement, Butker decided to go it alone.
Far from being suckered, Butker secured an enviable deal. 70% of the salary is guaranteed, under the terms of the contract, and he’s saved himself a good deal of money by forgoing the agent.
But it isn’t just football, it seems. Across industries, some are questioning the formerly unquestioned value of using an agent, which is having real-world effects as we speak. But is it wise to do away with your agent?
Read on.
What Does an Agent Do?
Agents act on behalf of clients, typically in contract negotiations when a salary or fee is concerned, especially in arts, entertainment, and sports. Really big celebrities will often have the opportunity for brand endorsements, and agents handle these negotiations as well. Agents’ compensation is tied to the deals that they secure, and this percentage varies depending on the arena.
In publishing, literary agents typically take 15% of a book deal.
In film, an actor’s agent will take around 10% of the actor’s earnings.
A booking agent for a performing artist, particularly for musicians, earns 10-20%.
What is the take for a sports agent representing an NFL player? 1.5-3%, which might not sound like much, but in Butker’s case, he saved himself around a million dollars by cutting out the agent.
Contrary to common conception, agents usually do not go out and find opportunities for their clients. If you land an agent as a writer, for example, your agent is generally not going to set up a book tour, pound the pavement looking for new projects to get you hired on, etc. What will they do? Negotiate the contract once you have a book that’s ready to sell, and once that contract is signed, they’re typically done with their part. Managers are the ones who have more to do with career development, finding new opportunities, and bringing in work for an artist, athlete, or entertainer.
Naturally, the average actor does not have an MBA with a knack for contract negotiations, and the typical linebacker is not a JD with a background in contract law. So the fees, while sometimes high, are worth it if the agent can bring you a higher total take than if you had represented yourself and ended up with a rotten deal.
After all, the big publishing houses – or the movie studios – or the record companies – or the NFL teams – do this every day. How many contracts is one star going to have to do? Expertise and pure experience are almost always on the side of the one paying out. If the agent can level the playing field, hopefully, you can end up with a better outcome. No one is going to argue that 80% of $1 million is a lot better than 100% of $200k, for example, but 80% of $200k is obviously not better than 100% of $200k. In other words, it all comes down to the agent’s ability to increase your earnings on any given negotiation and protect you from bad clauses in a deal.
Some of the time, people question if agents are worth their commission.
Right or wrong, this line of questioning has led to some major changes, specifically in the world of real estate.
Real Estate Agent’s Commission Cut Again
When buying or selling a house, you almost always have two agents involved: one for the buyer and one for the seller. They bring to the table their expertise, their understanding of the law, their connections, and their familiarity with what is on the market right now. But with changes in access to information and technology, the value of these things has somewhat diminished in the average consumer’s eyes.
After all, a search on Zillow or LoopNet can show you what’s on the market. You can google a lender, read reviews, and make a decision without really needing a recommendation. You can even watch videos on clauses to look out for in your contract, read up on the regulations, and inform yourself all without ever leaving your couch.
And 6% of a home sale – often the largest asset a family owns, and usually financed – is a lot of money. The average home price in the US is now $500k (with the median at over $400k). 6% of that is $30,000.
When you can pull up listings in a few seconds on Zillow, is a $30,000 fee reasonable?
A recent court case says no. Things are going to change for real estate agents, as well as buyers and sellers, very soon.
A real estate agent’s compensation is a little complicated anyway – the standard used to be about 6% for home sales, covered by the seller, split between the buyer’s agent and the seller’s agent. But that’s not all, because the agents still have to give at least 1/3 of their commission to their broker – and usually at least half. Putting all of that together, a real estate agent used to take home about 1.5% of the home selling price.
That seems a bit more reasonable, but to the consumer, why should that number be multiplied by four, and all borne by the seller?
The NFL’s Top Talent
At the end of the day, the argument all comes down to ROI. Harrison Butker was able to negotiate a record-breaking salary, but also great NFL player Lamar Jackson, a fine quarterback who plays for the Baltimore Ravens, was lambasted for months for his decision not to hire an agent to represent him in his contract negotiation. The going story was that Jackson’s refusal to hire an agent had already cost him around $40M and would surely cost him more in the future.
And then, just last year, he signed a contract that made him the highest-paid player in the NFL at the time of the deal.
Lamar Jackson represented himself in that negotiation, worth $260 million, of which $135 million is fully guaranteed, with a $72.5 million signing bonus. Even sports agents are saying he did rather well.
What Lies Ahead for Agents
Travel agents are, except for a few small niches, essentially gone from the world of business. The typical residential real estate agent may be far less common in the future. It seems unlikely that sports agents will suffer the same fate, but these large, unrepresented contracts suggest that nobody should get too comfortable. Successful agents have to hustle every day to prove the value they bring to their clients – which isn’t much different than what everyone in business has to do.
People will never lose the need for representation, at least in some arenas. But as technology, culture, and information accessibility continue to shift and change, we’ll be keeping an eye on what is and is not considered an “agent situation.” But before you write off the industry, remember that the pendulum always comes swinging back the other way.
Fun Fact
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INDUSTRY INSIGHTS
Global Recession Fears, Market Watch, and Coffeezilla’s Legal Woes
Global Recession Fears
Last week, the stock market fell 5% over 5 days, including a 1,000 point drop on August 5th alone. Though numerous forces are in play, the immediate cause is understood to be the increase in interest rates from the Japanese central bank, triggering a selloff from traders that have come to rely on the yen-carry trade. This was compounded by a weak economic report in the U.S. as well, as markets tumbled last Monday. The Dow was fairly quick to recover much of the losses, but for some analysts, fears remain that this may be the first shock of a coming global recession. Others disagree, citing freight demand and possible future rate cuts. Nevertheless, the Sahm rule indicates that we are already in a recession, though some analysts maintain that the rule may not be accurate in the current economic climate. For the moment, the consensus seems to be that the threat of an immediate recession has passed, but Warren Buffet’s historic cash reserves and stock sell-off indicate that at least one legendary trader is betting otherwise. As of Tuesday, a better than expected producer price index (PPI) report was causing stocks to rise again.
The Housing Market
The average 30-year fixed mortgage fell below 6.5% for the first time in over a year, amidst a weak jobs report and volatility in the stock market, with many investors renewing expectations for a Fed rate cut. Nevertheless, the housing market remains at a record-high valuation, climbing ever-nearer to $50 trillion in value as prices continue their upward trajectory. Though rates have come down some, they remain significantly higher than they were just a few years ago, which locks many homeowners into their properties, which shrinks the available supply, driving prices up. There are competing narratives on real wage growth, but however you slice it, growth has either been very slow or negative. The Housing Affordability Index has dropped from 148.2 down to 93.3 since 2021, as qualifying income has nearly doubled. In other words: It’s getting a lot harder for the average American to afford a house. Some are more optimistic, however. The Fed of Dallas, for example, suggests that we will see a slow growth in affordability due to rising wages and home appreciation trailing inflation, rather than a dramatic bubble burst correction.
Coffeezilla’s Legal Woes
We’ve featured Christian influencer Coffeezilla in Sent to Win on more than one occasion, and now, the popular YouTuber is facing a defamation lawsuit for his (truthful) reporting. Logan Paul, an online personality/WWE performer recently filed a lawsuit against Stephen Findeisen, A.K.A. Coffeezilla, for his reporting on Paul’s “Crypto Zoo” scam that fleeced his fans of millions of dollars, and gave them nearly nothing in return. The lawsuit comes on the heels of Coffeezilla beginning to look into another one of Paul’s companies, “Liquid Marketplace,” a fractional asset ownership platform, that has recently been the subject of a fraud investigation by the Ontario Securities Commission. To make matters worse, Coffeezilla’s media insurance company is refusing to pay out his policy, which may result in more lawsuits. (Always read the fine print, and have a lawyer read the terms and exclusions. This is not legal advice.) In order to pay for his legal bills, the Internet Detective has set up a merch shop rather than a legal defense fund, so that contributors can “at least get a t-shirt.”
Sunday School
Q. Where does the first “Song of Moses” appear in the Bible?
A. Exodus 15, after the Israelites have crossed the sea to freedom. (The others are Deuteronomy 32 and Psalm 90)
“Now I know we have some differences of opinion in the congregation, so I’d like to introduce today’s guest speaker as both the greatest, most honest, and bravest man serving in ministry today, and as a liar, a thief, and a menace to society. Give him a hand!”
TIPS & TRICKS
Are the Shepherds for Sale or Not? New Book Creates Conflict Among Christians
Megan Basham, a contributor for the Daily Wire and a former contributor to World, released a book last week, which quickly became a whirlwind of controversy. The book, titled Shepherds for Sale: How Evangelical Leaders Traded the Truth for a Leftist Agenda, purports to show widespread corruption among evangelical elites at the hands of ideological capture and, allegedly, bribery.
Conservative Christian influencers have tended to celebrate the book, calling it a much-needed tell-all and a balance against the slew of left-leaning critiques of evangelicalism that have come out in recent years. The book, according to Clear Truth Media, “[chronicles] the growing chasm between many evangelical leaders and those they are supposed to shepherd.” Others, such as Ministry Watch’s Warren Cole Smith, write that Megan Basham has it all wrong. He says, in his review at The Dispatch, “Corrupting money is not on the evangelical left… but on the populist right.”
On X (formerly Twitter), Christian personalities have been arguing incessantly over whether the book is accurate or not. Pro-life activist Seth Gruber writes, “The fight happening over Meg Basham is far more important than anything happening in the GOP right now. Her book explains why we shouldn’t be surprised that a party launched to end slavery has become so weak and stupid. It’s because many [of] our evangelical bettors are hirelings.”
Others, such as Phil Vischer, the creator of Veggie Tales, refer to Megan Basham being called “a bad journalist” and says her book has “a host of factual issues.” Christian investigative journalist Julie Roys has also been highly critical of the book. She says that Megan Basham “knows how to throw red meat to rile up her base. But she does so at the expense of truth.” Roys adds to her comments that objecting to dishonesty does not make her woke.
For her part, Megan Basham says all of the backlash is a circling of the wagons of the corrupt elite that have been able to keep what’s really going on under wraps, until now.
“I have received cease and desist letters from one of the country’s most powerful law firms,” Basham posted on X. “My publisher has received letters from major ministries asking for meetings about their ‘concerns.’ Backroom power brokers have tried to discredit and derail my project. By God’s grace, they’ve all failed.”
Shepherds for Sale hit the top 10 list overall on Amazon last week, reaching as high as #5 as controversy and intrigue drive engagement.
Are her accusations true? Are major evangelical leaders sold out to a leftist agenda, or is it right-wing fear mongering? Is Megan Basham a shoddy, unethical journalist, as some claim, or a brave outsider boldly pulling back the curtain?
It depends on who you ask. And unfortunately, that is increasingly the answer to a slew of questions dividing the American evangelical church.
Quick Hits
- Sony will no longer seek to acquire Paramount Pictures, according to CNBC.
- Christianity Today highlights the top moments of Paris 2024 where Christian athletes were able to share their faith.
- Disney posted a small profit from streaming and films last quarter, but parks profitability wanes.
- Shopify outperforms Q2 expectations and looks to continue growth.
- A Chik-fil-A in Virginia is now open on Sundays… for church services to accommodate a displaced congregation. They are not, however, serving food, and drinks, or operating the restaurant on Sundays, as the fast food chain remains firmly committed to a six-day workweek.
- Starbucks swaps out its CEO for Chipotle’s top exec, Brian Niccol.
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