Sports agents represent athletes in professional negotiations for contracts, salaries, endorsements, appearances and other business agreements. They work to promote the athlete’s image, abilities and career and most often earn money from commissions based on the agreements they broker. The commission percentage an agent charges his client varies based on a variety of factors.
An agent’s commission varies, based on the sport he represents. Generally, a sports agent earns between 4 and 10 percent of an athlete’s playing contract, though some leagues place limits on what percentage an agent can charge in commission. For example, the National Football League states that an agent can't receive more than 3 percent of player salaries. The National Basketball Association places the limit at 3 percent too. Major League Baseball and the National Hockey League don't have any limits on agent commissions, however.
The amount an agent earns in commission depends largely on the average player salaries of the sport he represents. Because of salary caps, however, the highest-paid players don’t necessarily correspond with the highest-paid agents. In the NFL, players can earn anywhere from $375,000 to $20 million from a playing contract, meaning the agent can earn between $11,250 and $600,000 per player. In MLB, with no commission limits, players earn between $400,000 and $32 million, and agents pull in anywhere from $16,000 and $4 million. The highest-paid MLB agent in 2013 was Scott Boras, who earned $11,728,037 in commissions from $248,222,750 worth of player contracts – a 4.7 percent commission.
A large part of an agent’s job involves finding, negotiating and securing endorsement contracts for his clients. An agent typically earns 10 to 20 percent of a client’s endorsement contract, though the exact amount may vary by sport and type of contract. For example, track and field agents typically require a 15-percent commission on any shoe company endorsement and a 20-percent commission on all endorsement contracts outside the primary shoe deal. An agent may also set up paid meetings and appearances, for which he'll typically take between 10 and 20 percent of the earnings.
The average salary for agents representing athletes, artists and entertainers in 2012 was $96,120, according to the Bureau of Labor Statistics. Average earnings can vary by location, however. The industry’s highest earners mostly reside in California, Texas and the Northeast. The lowest earners live in the Southeast or Pacific Northwest. Differences in regional earnings may reflect the number, prestige and financial status of the sports teams in different areas. For example, California, the state with the highest-earning agents, with an average salary of $119,170, is also home to the Los Angeles Dodgers, the sixth most valuable sports team in the world, according to Forbes.com.