The burgeoning business of sports management Reply

by Matt Dawson

Sport is big business and behind almost every success story is an athlete manager, especially in sports like the NBL. Here the Melbourne Tigers versus the Sydney Kings. Photograph: Soon

Sport is big business and behind almost every success story is an athlete manager, especially in sports like the NBL. Here the Melbourne Tigers versus the Sydney Kings. Photograph: Soon

Australia is a nation of avid sport watchers. For us, sport is all about entertainment. But professional sport is also big business and behind almost every success story is an athlete manager.

It was not until the late 1990s, in the lead-up to the Sydney Olympics, that the athlete management profession really took off in Australia. Previously most athletes saw having a manager or agent as an unnecessary expense.

Apart from those engaged by international stars like Greg Norman, Kieran Perkins, Pat Rafter and a handful of footballers, athlete managers were an unknown commodity.

Wayne Loxley, owner of White Line Management, has been an athlete manager for 17 years. He started his career as a teacher, working with special needs students for seven years before moving into coaching, fitness and administrative roles at Subiaco Football Club, in the Western Australian Football League (WAFL).

It was his interest in mentoring young footballers that led him into the burgeoning profession.

“I have always had an interest in the development of young people. I started back in 1996 with a mate of mine. We embarked on managing footballers initially. We moved onto other athletes or sports people as we went along,” he says.

At the height of his career, Wayne Loxley had 25 AFL players on his books, along with a few athletes from individual sports.  Three-time boxing world champion, Danny Green is the most internationally renowned, and according to Mr Loxley, an athlete who demonstrated mental strength rarely seen.  He worked as part of the ‘Green Machine’ team for 11 years where he was responsible for Danny Green’s media and promotions.

Athletes competing overseas, such as NBA basketballer Andrew Bogut, are generally Australia’s highest paid sports people.  Mr Bogut, a 29-year-old Melburnian, recently negotiated a three year contract, reported to be worth $44 million.

However behind Australia’s sports superstars, the household names, there is a cast of thousands of athletes, many competing in Olympic sports, trying to earn enough money from their sport to make ends meet.

“If you are getting into the business purely to make money, you are getting into it for the wrong reasons. That is one of the problems with the industry now,” Mr Loxley says.

Domestically, Australian Football League (AFL) is the most financially lucrative. It is the football code with the biggest television audiences and the most teams.  There are 840 players in the AFL whose careers, on average, will last just six years. In 2012, the average player salary was $251,000.

Player managers normally take a three to five per cent cut for negotiating a client’s playing contract with a club. To manage the affairs of a middle-of-the-road AFL player, they are looking at between $7,500 and $12,500 per year.

“You might get 10 to 20 per cent of any sponsorship, marketing or media opportunities, but the only players who get those are the very good ones. The majority of players don’t get those extra endorsements,” Mr Loxley says.

Sam Maxwell, 25, who owns his own sports management company in Perth, agrees that AFL offers the best financial opportunities but can be a challenging industry.

“The flipside is that it is so competitive. It is hard to break into the industry. AFL’s a bit of a boy’s club. If you are someone who doesn’t have AFL industry experience, it can be a little bit tougher,” Mr he says.

Mr Maxwell, who studied law at the University of Western Australia, always thought he would start his career as a lawyer.

“I probably never set out to be an athlete manager. It’s not something I planned for. Because of my own sporting background and who I grew up with, I knew a lot of high level athletes,” Mr Maxwell says.

He studied law with Matt Ebden, a 26-year-old professional tennis player with a career high ranking of 61.  Certainly not a household name, Mr Ebden had his best year on the ATP circuit in 2012, earning over US$450,000 in prize money.

“He and I were good friends and coming towards the end of our law studies, I was just helping with a couple of small contracts. I really enjoyed that. One athlete went to two, and it probably wasn’t until I had six or seven on my books that I thought I could make a business or a career out of it,” Mr Maxwell says.

He manages athletes in swimming, track and field, cricket and tennis. Among them are world champions, Olympians and national representatives.

But the money he makes from managing the affairs of his 13 athletes is not enough to sustain his business. He employs two staff, one part-time, to assist him with school tennis coaching and sports event management, his other business interests.

“The only time you make a little bit as a retainer is to help the guys with their travel and competition schedule. You might do the contract between them and their coach. But you don’t take a commission on that. The only time you are actually getting paid is when they get a paid sponsorship,” Mr Maxwell says.

Australian athlete managers’ lives rarely resemble that of Jerry Maguire. It is less “show me the money” and more daily grind, ruing missed opportunities and sweating on obscure results.

In March this year, Sam Maxwell was in discussion with a 19-year-old cricketer who had been selected for the Australia A squad.

“He hadn’t signed his contract but we had pretty much agreed it in principle. When he left I said ‘don’t worry about it, don’t be pushed to sign, we’ll do it when you come back from the Australia A tour’,” he says.

The virtually unknown spinner got selected as a net bowler for the Ashes series in England. He was then picked in the First Test at Nottingham where he made 98 runs, the highest score for a number 11 in Test Match history. Ashton Agar, the star was born.

“His dad called me and said because of everything that had happened, they had decided to go with a guy out of Melbourne. After a couple of weeks everything was teed up. I guess all you can do is maintain good relationships and you never know what’s going to happen further down the track,” Mr Maxwell says.

Tennis sponsorship contracts often contain triggers for re-negotiation based on ATP world rankings.

“A lot of contracts have a trigger at 50 or 60 in world. When you get to that point, you start negotiating a pretty sizeable deal,” Mr Maxwell says.

Last year, he was left sweating on an obscure tennis match result at a tournament in the US.  A win would have meant one of his clients breaking into the top 60 and opening up substantial commercial opportunities.  However, the match went to three sets and his client lost.

Mr Maxwell says the prerogative of an athlete and manager is often different. The athlete focuses on the process of improving as a player, knowing the ranking will look after itself if they get that right.

“You want that to happen too because you know if they keep improving, they will get those deals. But especially when it’s that fine, you think, ‘well had it been that one extra result, it would have made a big difference’,” he says.

Ending a long time association with an athlete amicably is another challenge managers face.

“It comes down to the type of relationship you have had along the way. Footballers, once they get to 28 or 30, are young men who are married and have got their own lives. You are trying to get them through those earlier years where their life does change quickly because of income, fame and media interest. You are trying to help them through that transition period,” Wayne Loxley says.

Mr Loxley is currently taking long-service leave from his role as Chief Executive Officer of Athletics Western Australia.  He has managed to successfully combine this role with his athlete management work.

“I was fortunate that the Board of AWA was good enough to let me combine both. As long as you are getting the job done, that is the most important thing,” he says.

Today, his firm operates on a much smaller scale, currently looking after West Coast’s Josh Kennedy as well as four mid-range AFL players.

Sam Maxwell is currently considering a takeover offer from a large sports management firm.  The deal would give him more financial security but would result in a loss of autonomy.  His crop of athletes would sign on with the firm, which already has more than 70 athletes on its books.

Athlete managers gain a rare insight into the attributes needed to succeed in professional sport. According to Wayne Loxley, the characteristics of a champion often transcend the playing field.

“The most successful people are often the best people. They are not trying to be anything they are not. They are natural in what they are doing, they work hard but they also respect and appreciate other people and their skills. Those athletes become family friends almost; you invite them around for dinner. You get to know them on a personal level,” he says.

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