Basketball Agent Steven Olenick - April 16th

Steve Olenick joined the Wharton Sports Business club over lunch to discuss his career path as a sports agent. Steve is a basketball agent with Entersport, LLC, one of the top agencies representing professional basketball players in the United States and abroad. Steve works with Mark Fleisher, whose current client roster includes Mehmet Okur and Andrei Kirilenko. Steve has worked within the sports representation industry for the past 8 years as an advisor and business manager for professional athletes. Prior to joining Entersport, Steve worked as an attorney for Paul, Weiss, Rifkind, Wharton & Garrison LLP in New York City, focusing on sports and media transactions.

Steve talked about the hard work, focus and ability to cultivate relationships that has helped him succeed as a basketball agent. We discussed a number of interesting topics during a wide-ranging hour long conversation:

NBA contracts. Interestingly enough, Steve said that the first contract for a player is typically very basic. Draft pick compensation is “slotted”, so there is not really a lot of room to negotiate an improved deal. Most of the value an agent can deliver during the first contact comes from their ability to land marketing deals, etc. The second contract is typically more complicated, and this is where you can see the deal-structuring ability and creativity of an agent pay off.

LeBron’s next contract. You might have heard, but there’s a rumor that LeBron might sign with the Knicks after becoming a free agent in 2010… One WSBC member said he’d heard that LeBron is looking for an equity stake in his next deal. Steve thinks that Dan Gilbert, the owner of the Cleveland Cavaliers, should strongly consider giving him an equity stake because if LeBron leaves for a larger market in 2010, the franchise value will take a very big hit anyway.

Overseas teams. In light of Josh Childress defecting to Olympiacos Piraeus, someone asked whether or not Steve thought this would become an emerging theme. He made several interesting points. First, the style of play of a typical NBA player does not necessarily translate well to the European game. NBA players are typically great athletes, but in games predicated upon spot-up shooting their ability does not always stand out. Second, Steve thinks the economic downturn will hurt the overseas market. Many of these owners are paying for players out of pocket. Russia in particular sets the market for players. Many of the Russian owners made their fortunes in oil, so the current economic downturn has hit them particularly hard.

Niche vs. mega-agency. Entersport, LLC focuses exclusively on basketball. One member of the audience asked what the pros and cons were of the niche vs. mega-agency approach. Steve thinks that the relationships IMG has are definitely helpful. However, he explained that a large agency like IMG will actually have in-house marketing and PR departments. In his opinion, if you have a great player, you can afford to hire a player-dedicated marketing and PR staff. In the end, the strength of an agent or agency’s relationships – both within the industry and with his players – is what will determine their success.

Overall, it was a very entertaining and enlightening hour. The Wharton Sports Business Club would like the thank Steve his time and condor in describing the life of a sports agent.

Article Contributor: Robert Sebastian

Digital Media Panel - March 23rd

The Wharton Sports Business Club hosted a digital media panel and reception on Monday, March 23rd. John Ourand, who writes for the Sports Business Journal, served as the moderator for the discussion. The panel consisted of Neal Pilson (Pilson Communications and Former head of CBS Sports), Sara Jeon (VP, Content and Strategy, Sling Media), Kyle Ragsdale (VP, Business Affairs, SB Nation), and Neal Scarborough (VP, Digital Media, Versus Network 2).

Ourand wasted no time in getting started, asking Neal Pilson – the former head of CBS Sports – if the TV networks were a dying breed. Pilson suggested that, while the broadcast networks have recently been referred to as dinosaurs, they are at the very least adaptive dinosaurs. They still have the muscle and reach necessary to be dominant players. He believes networks will continue to be heavily involved in digital rights, because the coordination of broadcast, cable, mobile and internet are all still controlled and orchestrated by the broadcaster.

The follow up question was whether or not broadcast networks can effectively compete with subscriber based channels, specifically ESPN. Ourand framed the question by saying that he couldn’t remember the last time he had seen Rupert Murdoch get outbid, as he had been when ESPN outbid FOX for the rights to the BCS Series starting in 2011. Pilson agreed that ESPN may well dominate, saying he expected ESPN to be very aggressive when the next digital rights come up. It is very difficult for broadcast networks to compete with ESPN, which garners ad revenues like a broadcast network and then augments them with over $4 billion annually in subscription fees (~$3.70 / subscriber / month x 12 months / year x 98 million subscribers). CBS may look to create a competitive counterbalance to ESPN / ABC by looking at Turner, but even Turner only commands around $0.70 per subscriber – a far cry from ESPN’s premium. Pilson contended that political fall out is often the only barrier to ESPN because it can be difficult to justify airing a major sporting event on cable at the expense of the ~15mm US households that don’t get cable. That said, Pilson suggested that the NCAA would almost certainly explore its options for its hugely popular Men’s College BB Tournament contract. It has the right to opt out of this contract with CBS after this year’s tournament, and Pilson sees ESPN to be the likely top suitor.

Neal Scarborough weighed in on his experience at Versus Network. The Versus Network 2 is home to college football, bull riding, cycling, hunting and fishing and other niche sports. Currently he is focused on strengthening the brand and enhancing Verus’ online offering.

Next up was Sarah Jeon from Sling Media, creator of the popular Sling Box. Sling Media was established in 2004 and acquired by DISH Network in 2007 at a valuation of around $380 million. Sarah heads the Sling.com online effort, which is a professional-only video site that partners with content creators. Currently, Sling.com offers over 90,000 videos for free including shows, movies, sporting events and highlights. They are streaming some sporting events live, such as the Masters per an agreement with CBS. ESPN, on the other hand, does not share its content, in part because they have their own broadband sites. Interestingly, Neal Scarbrough said Versus is happy to share content with Sling.com because, at this point, they are more concerned with developing brand recognition than subscription fees per se.

Kyle Ragsdale gave us a view into the blogosphere’s role in sports while describing SB Nation. Kyle joined SB Nation after embracing the blogosphere as the associate director of media relations in the Georgetown athletics department. SB Nation was created over four years ago when a displaced Oakland A’s fan realized how hard it was to get quality coverage of his favorite team. It has since evolved into a collection of nearly 200 individual blogging communities, oriented around major professional and college teams. Each team’s blog has an editor under contract with SB Nation, whose role is to moderate content. SB Nation depends upon an ad-driven revenue model.

In response to Ourand’s question, the panelists generally agreed that they were not concerned about potential knock-on implications of newspaper’s demise. As Kyle Ragsdale put it, SB Nation’s content is going to continue whether the Kansas City Star exists or not.

Neal Scarbrough fielded a question regarding Versus’ support of nascent sports such as MMA. The question asked whether or not he was concerned about the prospect of helping grow a sport and then losing the rights to a bigger competitor. Scarbrough that, to the contrary, Versus is fully aligned with the growth of new sports they promote. Though Versus stops short of altering the content and character of a sport, they do provide advice on how to market it. Interestingly, Scarbrough’s primary concern with emerging sports was not that they would outgrow the channel, but rather that the reallocation of airtime would marginalize the sports on which Versus was built (hunting, fishing, hockey, etc.).

After an excellent panel, the panelists and attendees continued the discussion over food and drinks at a reception in MBA Cafe. The WSBC would like to thank the Wharton Sports Business Initiative for their generous support, and each of the panelists for their time and insight into the world of digital media in sports.

- Rob Sebastian WG'10

Parody As We Know It

As we conclude the first weekend of the NCAA Tournament, one thing has become increasingly clear when looking at the final sixteen teams remaining. The top programs in the country have reestablished their dominance over the 393 school landscape of college basketball. Every one of the top three seeds have advanced, and the lowest remaining seed, Arizona, is one of the preeminent programs in the country. So what happened to the Davidsons and George Masons of the world?

As far as I can remember, the NCAA Tournament has been the residence of Cinderella; the place where any team that makes it can grind out an upset that will have the whole country buzzing, delivering us images of Steph Curry and his textbook stroke gracing newspapers and websites everywhere. This year, there are no such images; instead we are given the powerhouses, five Big East teams demonstrating that they are, in fact, the consensus conference of choice.
Jay Bilas made the argument that this year is a “down” year for the mid-major teams, but that seems to go against the grain of what is happening with basketball in this country. With top college players staying in school for only one season, it would appear that the top programs would have difficulty reloading with talent as they have in the past. This would seemingly level the field and provide increased opportunities for the smaller programs to achieve the much desired upset.

In football, we all believe that the best teams come from the BCS conferences and the traditional powers. There will always be a Boise State, but in general, most agree the only programs that have a real chance at the National Championship come from the big six. In basketball, however, we have been trained to think differently. The fact that there are no mid-majors remaining in the Sweet 16 certainly must make us think twice about the reality of parody in college basketball today. Regardless of who comes out on top, it will be a program that is no true surprise; a team that countless fans, pundits, and “experts” chose before Thanksgiving.

So does this Tournament bring us true excitement? I certainly think so. While it is always nice to see a story such as Davidson, the reality is, we, as Americans, are only interested in sports at their highest level. The remaining programs have the best talent, coaches, staff, facilities, and resources. This year, decades of developing powerhouse programs have certainly paid off, as we are left with the cream of the crop.

- Andrew Chun WG'09

San Diego State Case Competition

The Wharton team had a great time at the San Diego State Business Case Competition. The task, to find a creative way to use the 2010 World Cup to promote non-profit organizations aimed at eliminating Malaria in Africa, was very timely and relevant. Although our Wharton team did not take home the trophy we really enjoyed the process. Who can complain about preparing a case while sitting in a private box at Petco Park and interacting with executives from the San Diego Padres? The competition was also a great opportunity to meet MBA students from other programs who are interested in sports; the nine teams came from all over, from Oxford to Columbia to nearby UCLA. San Diego State was an amazing host, the whole competition was extremely organized and to conclude our beautiful San Diego weekend we spent an afternoon racing two sailboats that had formerly raced in the America’s Cup! The team would like to thank the Wharton Sports Business Initiative for their generous support that made our participation possible.