And the Beat Goes On

Welcome back to the Sports Business Minute. We recently took a look at how African American athletes are literally being bought and sold. The selling frenzy involving African American athletes is not restricted to player agents selling their athlete agencies. Barry Klarberg, financial advisor to about 400 professional athletes and entertainers including, but not limited to, Shareef Abdur-Rahim, Charlie Villaneuva, and Dhani Jones, recently sold his firm to Guggenheim Partners to “give his athletes and other clients access to more resources” according to Klarberg.

If the “more resources” line sounds familiar, it is because it is the same line used by player agents in connection with the recent wave of sales of athlete agencies to agencies who “have more resources and can provide more services” to selling agents’ athlete clients. The bottom line is that the agents have reaped huge profits, failed to advise their athlete clients of their right (and need) to obtain independent counsel, and then earned handsome salaries under long-term employment contracts with the buying agency.

In 1997, Klarberg had sold his business to Assante Sports Group. Klarberg has bought back his business as the last piece of what was formerly the Assante Sports Group, which once included football agents Leigh Steinberg and Eugene Parker, former baseball agent and current Arizona Diamondback CEO Jeff Moorad, basketball agent Dan Fegan and hockey agent Mike Gillis. Klarberg would not reveal the financial terms of either deal, but Loris Ward, which was formerly Assante Corp., reported in August 2006 news release that it had sold Klarberg back his business for $5.15 million.

The player agents who represent the 400 Klarberg clients direct their spending, and Klarberg directs their investments. There are approximately 2,800 professional athletes and the 400 Klarberg clients represents approximately 15% of the total. Professional athletes collectively earn approximately $4.6 billion per year and simple arithmetic tells us that the agents and Klarberg together control approximately $690 million in athlete dollars.

Not only are agents/attorneys buying and selling African American athletes at the professional level, but African American college players continue to fall prey to sharks in blue suits. Just last week, Memphis attorney Carl C. LaMondue filed suit against former Virginia Tech player Jimmy Williams, a 2006 2nd round pick of the Atlanta Falcons, demanding that Williams and his father reimburse LaMondue about $50,000. The week before, LaMondue filed a similar suit seeking reimbursement for almost $50,000 in cash and benefits from former Memphis State basketball player, and the 2006 No. 1 pick of the Indiana Pacers, Shawne Williams. LaMondue stood to earn half a million dollars on the $100,000 “investment.”

What can we, as African American professionals, do to stop the bleeding? Rather than complain about what is happening, we at Entertainment and Sports Plus and FAIR, the FraserNet Athlete Initiative for Reform, believe that African American professionals and the African American community as a whole must come together, put aside our personal agendas and differences, and work together to provide our sons with a viable alternative. Otherwise, we will make the $40 Million Slave: The Rise, Fall, and Redemption of the Black Athlete, by William C. Rhoden, prophetic.

We can do better. Let’s stay connected and make a difference. Tune in next week to another piece of the real sports pie.

Jimmy Williams had been projected to be a 1st round draft pick before the draft

If you have questions or require additional information, please contact Everett L. Glenn, Esq. at eglenn@espsportslawpro.com or call 562.619.8460.