Why Alex Smith Needs Jerry Maguire.

By, Alex O’Sullivan-Pierce

"Show me the money!"

It is a well-established rule: everything you need to know about the world of sports agency can be found in Jerry Maguire. Even 16 years later, this rule holds true.  Take the recent story dominating sports headlines, the free agency of future hall of famer Peyton Williams Manning.

As I am sure you remember, Jerry Maguire had just one client (for most of the movie, anyway). Business in the sports world is always tough, but for Jerry it was simple, one client, one interest, one person to show the all the money. Business is far more complicated for real life sports agent Tom Condon, head of mega-agency IMG which represents hundreds of athletes and entertainers around the world including Mr. Peyton Manning.

Much like the fictional SMI, Jerry Maguire’s former agency, Condon and IMG represent a bevy of professional athletes, in addition to Peyton Manning, including New York Giants’ quarterback Eli Manning, New York Jets’ running back LaDanian Tomlinson and San Francisco Forty-Niner’s quarterback Alex Smith. On screen and in reality it is quite common for successful sports agents to build upon their client base to attract more and more top echelon athletes. Super-agent Scott Boras represents numerous MLB players, some even on the same team. Even Jerry Maguire himself represented seemingly dozens star players across different sports before he was fired from SMI and had his clients stolen by fellow agent and former mentee, the unscrupulous Bob Sugar.(See the link below for a flashback.)  As an agent Jerry had it all, and he blew it, but it wasn’t by mistake. In fact it was the culture of constant hustling and profit-driven moral compromise that had Jerry questioning his existence in movie’s opening scene. What had I become?

Simply stated, Jerry was tired of all the conflicts of interest. These conflicts were the subject of his daring mission statement “The Things We Think and Do Not Say.” See, after years in the biz, Jerry realized that agents of his ilk place themselves in situations where they cannot possibly act in the best interest of all their many clients. The same is true for IMG and Tom Condon.

Back to Jerry, who after leaving SMI in a blaze of Tom-Cruise-freak-out glory, set out into the wild with one secretary/eventual love interest and his one remaining client, wide receiver Rod Tidwell. Like any sports agent, Jerry’s success was tethered to his client’s success on the field. This commission system has the benefit of incentivizing an agent to negotiate the deal which will reward both client and agent with as much money as possible. Because Jerry was Rod’s exclusive representative, he was able to spend all two plus hours of the film fighting for their mutual professional futures. Help me, help you– this is why Rod and Jerry were hugging at the end of the movie.

Precarious moment: Rod scores, but takes a big hit.

I doubt Tom Condon and Alex Smith hug like that, and this is why: Peyton Manning. Mr. Four-time MVP says that he wants to go to a team where he can make an immediate impact and have another run at a championship. San Francisco, with a stanch defense and some appealing offensive pieces made the playoffs last year with Smith at the helm and is now among the many teams rumored to be courting one of the most coveted free agents of all time. Now, if Peyton were to begin negotiating with San Fran, Condon would represent both the incumbent quarterback, Smith, and the potential usurper, Manning. Obviously, Peyton to the Niners would be devastating for Smith’s career. Smith could be traded or demoted to back-up on the same team. His salary would stay the same, for now, but he could lose endorsement deals and bonuses and his future as a starting quarterback in the NFL would be in serious jeopardy. The exact numbers are impossible to predict, but it seems rather safe to say that Condon and IMG would place the interest of Manning over that of Smith as agent and agency stand to profit more for from Peyton Manning, even in his twilight years, than they do from the younger Alex Smith over the course of what will probably be a far less spectacular career. Spinning it the other way, Condon could also be incentivized to steer Manning away from teams, like San Francisco, where his other clients, like Smith, are already entrenched, even if it is not in Peyton’sbest interest. Either way, Condon has cannot possibly act in the best interest of both his clients.

Does Smith Need to Worry?

This is what Jerry Maguire was trying to tell us, this is why he wanted “fewer clients, less money” and this is what we think but do not say: conflicts of interest are way too common in the rarified air of professional sports.

The fact is that a small number of elite agents represent a small number of stars and negotiate with a small number of teams. Conflicts may arise even if an agent does not represent two players whose interests are as obviously conflicted as Manning and Smith. As Professor Martin Edel, instructor of the course Sports and the Law at Brooklyn Law School explains, “Because of the salary cap in the NFL, when agents represent players of the same position, and especially on the same team, there may be an inherent conflict.  That is because each agent wants the maximum amount of compensation for his player, but obtaining that amount of compensation within the structure of a salary cap may mean that another player on the same team may not get the maximum compensation.”

Professional sports have struggled with this type of conflict for years. In the 1984 case of Detroit Lions v. Argovitz a Texas court found that super sports agent of the day Jerry Argovitz violated his duty of loyalty when he negotiated a contract between player Billy Sims and the Huston Gamblers where Argovitz was also part owner of the team. Clearly, Tom Condon’s potential conflict is nowhere near as deep or obvious, but Condon’s status as the head of a prominent agency and representative of multiple players competing on and off the field for the same salary cap dollars does raise some similar issues. In the words of Rod Tidwell, “I got a shelf life of ten years, tops. My next contract’s gotta bring me the dollars that’ll last me and mine a long time. S***, I’m out of this sport in 5 years. What’s my family gonna live on? Huh?” Alex Smith might be thinking along these lines, and he might be wondering just where his interests rank among Condon’s star-studded roster of clients.

Do you know the human head weighs eight pounds? Of course. But did you also know that disclosure is the mighty antidote to conflicts of interest? The agent’s duty of loyalty is kept intact if players are fully informed of all the interests that their agents simultaneously represent before signing with them. As long as there are no hidden interests, the player can willfully and knowingly consent to go with multi-athlete agent like Bob Sugar or Tom Condon and proceed in the face of the potential conflict. But why would they? Bob Sugar’s reasoning was simple, It’s not show friends, it’s show business. Professor Edel gives a more nuanced explanation, “While one duty of an agent is to represent his client zealously, what must be balanced against that duty is the reason that clients go to an agent: clients go to agents because of the agent’s expertise.” Like many top draft choices Alex Smith chose to go with IMG when he was the first overall pick in the 2005, but the Alex Smith of 2012 looks a lot more like journeyman Rod Tidwell than superstar Peyton Manning. Smith doesn’t seem to be endowed with ego of a wide receiver, but maybe he could benefit from a little Tidwellian logic. After all, why should multimillion dollar athlete, like Alex Smith, be second, third, or lower, on his own agent’s list of priorities?

The point is this, Alex Smith needs Jerry Maguire, but since Mr. Maguire is unavailable, fictional and already representing Rod Tidwell, Smith should call me. I can guarantee that I do not represent any other NFL players. Alex, if you’re listening, you had me at hello.

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About Alex OP

Blog Editor for Arther Law's Industry Insider 3L at Brooklyn Law School

7 responses to “Why Alex Smith Needs Jerry Maguire.”

  1. Alex O'Sullivan-Pierce, Blog Editor says :

    Look, I told you! 49ers in the hunt for Peyton.
    Alex, you need a new agent!

    http://espn.go.com/nfl/story/_/id/7696945/san-francisco-49ers-worked-peyton-manning-week-sources-say

  2. Sam says :

    I’m curious about the difference between attorney agents and agent agents? Aren’t there different legal obligations there? The point about bigness leading to culture decay “What have I become” and conflict of interests cuts across many industries: see the recent editorial about Goldman Sachs, this old WSJ article http://blogs.wsj.com/law/2010/04/07/conflicts-of-interest-the-bane-of-biglaw/ robo-signed home loan documents inflating the housing bubble, etc., etc. The perception on the part of the client is bigger is better, I suppose. However, it seems like in agency and fiduciary relationships, like in sports/entertainment, finance, and law too, the more nebulous those relationships become (the natural result of profit motive) the more conflicts will arise.

  3. Sam says :

    Also, Jerry Maguire is a great movie. Pop quiz: name a bad Tom Cruise movie. Answer below.

  4. Sam says :

    Trick question: there aren’t any.

    • Alex O'Sullivan-Pierce, Blog Editor says :

      You can’t handle the truth. War of the Worlds (2005) is a horrendous Tom Cruise movie. Spielberg just lacking respect for the audience. The worst part is when Tom Cruise reaches out to his angsty adolescent son by playing an unconvincing game of catch. Cruise throws like he has never seen a baseball before.

      Makes you forget the rather believable scene in A Few Good Men when he hits batting practice. Wow, Tom Cruise is an excellent Sports-Law-Entertainment nexus.

  5. AK says :

    Thanks for the Jerry Maguire refresher.

    Alex Smith and Peyton Manning are both currently free agents. Smith signed a 1-year deal with SF prior to last season – he’s looking for a new contract and not an extension. Smith is a fairly smart guy and if he perceives a COI polluting his agents ability to negotiate a new contract – which is plain as day – then it is Smith’s responsibility to fire his agent. Condon works for Smith.

    Manning’s signing is going to be priority since his potential contract is going to be much more lucrative than a Smith signing, so a bigger payout for Condon. The fact that they’re both interested in the same position on the same team only makes Smith’s decision easier: If you want an increaed chance at re-signing with SF, fire Condon. If SF signs Manning and you need to find another starting job somewhere else, fire Condon.

    Smith is a big boy. He should be able to figure out when he’s getting hosed. If you ask me, the guy has already been overpaid up to this point so I have little to no sympathy for his situation.

    • Alex O'Sullivan-Pierce, Blog Editor says :

      Thank you for the extension/new contract correction. This makes Condon’s representation of the 2 QBs even more woefully conflicted. The question is, with Smith at such a crucial, vulnerable point at his career, should he try his luck with new, unconflicted agent or stick with the big firm that has carried him this far?

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