Our friend Kristian Santiago has written a very interesting piece about the current situation that basketball agents face in Europe. Enjoy the read and get some information from inside the basketball business.
The agent business in Europe is a tough business.
Getting teams to sign your player, to negotiate a deal that implements on-time payment and diverse extras such as cars, apartments and bonuses and to handle problems of players (i.e. when your player ends up in a fight in a club…) is not what you call an easy job.
It might get even tougher for these guys in the shadows during the global recession.
I recently asked several European agencies for their opinion on the financial crisis and its effects on their daily business.
The answers came in plenty and gave me a good insight on the situation of most agencies here on the old continent.
Gasper Bizjak and Goran Gramatikov of Global Sports Plaza quickly responded:
Our agency is growing year by year and world recession didn’t affect on securing our clients (players and coaches both male and female) with quality jobs much, but it sure did on player salaries and consequently also on agent fees.
The biggest problem has become tardiness in paying players and agents.
The same was recognized by another big agency:
Many teams had problems paying player salaries after January, and due to that, agent fees were on the very bottom of the priority list. Many teams who did not qualify for the playoffs tried to save a month’s salary by selling their players, but there were no buyers, only sellers.
To make a long story short: Many European teams were not able to fulfill their obligations toward their players and toward the agents.
So most agents suffered even more from the financial crisis then the players they represent, as agent fees were cut before teams decided to cut off payments to players as well.
Other agents decided to place its players in South America, where the situation appears more stable. Says Stefano Lips of Kingstone Basketball:
Lately, we have developed a stronger presence in South America where we have found good financial availability and timely payments.
What’s more interesting is that the outlook for the upcoming season in the European leagues is coupled with reduction of players’ salaries due to the immense cuts of most budgets.
Global Sports Plaza shares their view of the near future:
Recession didn’t and won’t hurt top-level players much, as they are holding their price but will surely effect medium-level players by 20% or even 50% salary cuts from previous seasons.
Lots of players will now stay in their domestic leagues, as the money offered abroad compared to the money at home will be the same or even in favor of the home-based offers. Before the 2008/09 season, we were witnesses to several transfers of NBA players to Europe (we are talking about players that played important roles within their teams) and most likely the majority of them is going to return to the NBA for the 2009/10 season. Even though they get great money here, they are just not keen on late payment.
The 2009-2010 season will be an interesting season for all of us (players, clubs and agents), as always in tough situations, only the ones survive who are able to adjust to a new situation quicker.
Another big agency writes:
For next season, we expect 10% of all European teams to vanish (they will go bankrupt and withdraw from the league). Of the remaining clubs, 90% will lower their annual budgets by 20-80%. For players, it is normal to expect a raise every year.
The combination of this expectation and the lower team budgets will lead to a very long and hot summer in which a record number of players may fire their agents (for not getting them a raise) and finding themselves unemployed when the season starts.
And finally Stefano Lips of Kingstone Basketball, who sounds more confident about the future:
I don’t see the number of transactions being reduced, maybe just modified, as some leagues are allowing more imports to play and want their national players to obtain more playing time and consideration. For Bosmans, outside of their home league, this may reduce their market possibilities. As far as contracts are concerned, it is widely known that clubs will be reducing budgets by at least 15-20%, if not more. Still, some teams want to stay competitive and will be finding a way to increase their budgets. Personally, I don’t believe we will see a big drop off.
The conclusion for me and probably a lot of you is that player salaries are supposed to drop and some clubs will be disappearing.
Not a rosy picture is being drawn by these agents. Also, expect some high-profile players to sign for significantly less to a big team at the last minute after waiting all summer for a big-time offer to appear. The value of a homegrown player is going to rise and their salaries might also do so while U.S. players are facing a drop in salary due to changes on the market which may include less use of imported players in Europe.
Also, do not expect to see another mediocre NBA player receiving larger paychecks in Europe than in the NBA, as players such as Nenad Krstic and Bostijan Nachbar, among others, faced delays in payment of their salaries, which has happened all across Europe no matter if it was Spain, Italy, Greece or Russia. This tendency is surely going to scare off current NBA players and might lead some of Europe’s finest over the ocean…
Only time will tell how teams, players and agents will handle these financial circumstances, but the coming year(s) might be crucial for European basketball and its chosen direction towards more professionalism in the sport.
written by Kristian Santiago