Conflicts of in n
Player agents profit handsomely from this country’s talent pool, reports s
PLAYERS are New Zealand rugby’s greatest commodity. From old to young, top to bottom, this country’s production line of talent is constantly sought after and exported the world over.
This highly-profitable industry benefits the athletes. So, too, their agents.
Hefty figures New Zealand player agents make from overseas deals have remained for industry eyes only – until now.
A Sunday News investigation has revealed the cut agents or their businesses receive can be as much as 10 percent of any offshore deal. It may not sound like much but is when aligned with million-dollar salaries. Significantly, they completely dwarf agent fees that can be as low as $1500 if their clients stay in New Zealand.
This eye-watering disparity in earning potential has created a natural conflict.
For the purposes of this investigation, the Sunday News spoke to four leading agents, covering all three major New Zealand companies. Given the sensitivities surrounding the specific figures and topic, only one was prepared to comment publicly.
All, however, acknowledged the conflict.
‘‘In some circumstances there is no doubt that a conflict exists,’’ Simon Porter, chief executive of CSM Sport and Entertainment, formerly Essentially, who act for the majority of leading All Blacks, said. ‘‘Whilst it is up to each agent or agency to manage that conflict as it sees fit, I amconfident that our team at CSMs’ legal backgrounds allows us to identify the conflict and manage it accordingly.’’
A transparent, robust process taking into account all factors, including money, family members and exactly what playing overseas entails, is crucial.
‘‘The grass is not always greener. Each player makes their own decision but we always want them to ask themselves as many questions as possible and one recurring one is ‘what is going to make you happier when you are 40 – a bit more money or knowing you played for your country as many times as you possibly could?’.
‘‘Each individual is motivated by different drivers. It is probably fair to say that a large part of the conflict is managed simply by working closely with the player to understand what drives them and allowing those factors to lead the ultimate decision.
‘‘We do not remunerate our agents on a commission basis. That is something we are fundamentally opposed to for the exact reason that it could give rise to allegations that your advice is tainted because of self-interest.
‘‘I have no doubt that agents’ self-interest has influenced the decisions some rugby players have made. The internet has made it so much easier for overseas-based agents who have no connection or investment in NZ rugby to contact players here and present them with ‘‘interest’’ from overseas . . . those foreign-based agents are not interested in what is right for the player, they simply want them playing in their domain so that they can clip the ticket.’’
THE OVERSEAS LURE
To understand how we got to this point, you have to understand how the market works and the sort of money that is available.
New Zealand agents acting for players heading to the UK often get a 10 percent slice of any deal in the first season, with that generally decreasing in the years to follow.
So when former All Blacks wing Charles Piutau signed a two-year deal with Ireland’s Ulster in 2015 aged 23, his agent, or company, pocketed a healthy sum in the region of $100,000. That was backed up by a lesser fee in year two.
A similar payday will be forthcoming for the agency involved in the deal for 25-year-old All Blacks and Blues loose forward Steven Luatua, who recently inked a lucrative two-year contract with English club Bristol.
Despite the weak pound at present, the UK, with its marquee exemptions to a club’s salary cap, frequently offer the best bang for buck in terms of an agency cut.
In France, where player salaries are exorbitant, agent fees are regulated along these lines: 10 percent of the first $50,000 salary, 8 percent of the next $100,000, 6 percent of next $100,000 and 4 percent of anything over $250,000.
Dan Carter, on $2.4 million perseason at Racing Metro, Aaron Cruden, Conrad Smith, Ma’a Nonu, Charlie Faumuina and Tawera Kerr-Barlow are just a small sample of All Blacks who have or will soon leave New Zealand rugby to earn substantially more money in France. And their agents or businesses prosper accordingly.
Japan, another popular, profitable destination, offers around 7 to 10 percent fee for agents.
Those fees are largely footed by clubs, and therefore paid on top of a player’s salary.
The conflict arises when comparing those figures to fees for signing a player to New Zealand.
It works differently across different agencies, but $1500 appears the New Zealand industry norm for your average, entry level Super Rugby player. That fee is paid by the player, with clubs often not required to fund any part of the transaction here. For that fee some agents provide financial planning, asset management and stepping up to assist with off-field incidents.
Most agencies charge this low fee on an annual basis. Others opt for a one-off payment over the full term of a contract.
High-end Super Rugby players and All Blacks naturally pay more agent fees but even their threshold fails to get anywhere near the global market, where deals are usually far more complex.
Ultimately, it’s this dynamic which creates unease, even among those who generally support the current model.
THE KIWI MODEL
‘‘Fees players pay in New Zealand are significantly less than they pay on the international market – and I mean significantly,’’ New Zealand Players’ Association boss Rob Nichol said.
‘‘We don’t want to sit here and say to remove that conflict we’ll allow the fees to be the same here.
‘‘We like the way our model works. The best way to deal with it has been transparency. At the end of the day the players, NZ Rugby, the agents all know the situation. We focus on, as so far as you possibly can, when a player is making a decision they’ve spoken to everyone they need to speak to.
‘‘What a coach, NZ Rugby, franchise and province are most nervous about is that the player is told something by an agent that may incentivise them into looking