Elliotte Friedman interviewed Kevin Epp, Shea Weber’s agent after the Predators matched the Flyers’ offer sheet for Weber. I found this exchange amusing:
Friedman: “You understand one thing about the CBA…for a non-lawyer, relative meathead like myself, it’s very dfifficult to undrestand at times. WHen Jarrett was on last week, he talked about the possibility of an addendum, putting a no-trade clause into the finalized contract that is not there in the offer sheet. I checked, I was told that couldn’t happen, but now today people have shown me an article in the CBA which indicates it could happen. Will you guys and the Predators put a no-trade in Weber’s deal?”
Epp: “Yeah, I mean we definitely plan to. I think as an organization, I think when you sign this kind of commitment to a player, I think it should go with the territory. I mean they’re making their commitment long-term and I think the player wants to have the same commitment that if he’s gonna stay there long term he should have a no-movement/no trade clause in the contract and you know that’s everybody’s wishes I believe.”
Friedman: “OK, so has Nashville told you they’re willing to do it?”
Epp: “Y’know we haven’t had long discussions with them today, it’s just been short and kind of sweet…”
LOLZ, as the kids say. Weber was entirely within his rights to sign an offer sheet and consider playing elsewhere. He was entirely within his rights to cause Nashville some problems by structuring a deal that pays him $27MM in the next year.
With that said, there were trade-offs, one of which was that he couldn’t force Nashville to match an NMC/NTC. “I think the player wants to have the same commitment that if he’s gonna stay there long term”? My goodness. He didn’t make any sort of commitment to Nashville, he tried to structure a contract that they couldn’t match and now he wants them to give him an NMC/NTC to show their commitment? Wow.
An interesting side point. It’s widely believed that Weber didn’t want to return to Nashville – his agents said as much. Signing this deal, which has the obvious upside of guaranteeing him $110MM, including $54MM over the next four years, came with the considerable risk of tying him to Nashville for the next 14 years, something he could have avoided by waiting a year, albeit at the risk of a worse CBA.
I always wonder about the conflict of interest that agents find themselves in on these situations if they’re being paid on commission. There was a thing a few years back, in the summer where the market was saturated with goalies, where Dwayne Roloson and Martin Biron had the same agent. Considering they were competing for the same jobs, I wondered how an agent chose as between them. What if a team said “We’ll give Roli X or Biron Y?” How do you negotiate in those circumstances?
3% commission is pretty standard for player agents. If you’re the agent who negotiates the contract, you’re guaranteed 90% of that amount, even if the player leaves you – the new agent gets 10%. I’ve always thought that this would place you in a tremendous conflict of interest. If you’re Weber’s agent, where he lives for the next 14 years isn’t really your problem. Sure, he’s a client, he’s probably someone you regard as a friend, but if he has to live somewhere he doesn’t want to live, does it really affect your life? Maybe you think it does. Weigh a guaranteed $1.62MM over the next four years against that – that’s the agent’s cut if Weber signs the deal.
If Weber doesn’t sign the deal but signs his qualifying offer, you’re guaranteed something like $230K. Sure, if you continue as his agent for his next deal, you might cash in then but everyone expects that it will be for less money, due to changes in the CBA. Worse, he might decide to change agents during the next year and then you’re left with nothing when he does sign the UFA deal. Given that your commission is relatively small, even the possibility of adding another 10% to the deal if you wait probably doesn’t make sense – you’d only be increasing your own fee by 0.3%. In Freakonomics, I think, there’s a discussion about how real estate agents are better at extracting that last $5K or $10K when it’s their own home; the financial incentive for them is greater there than if it’s someone else’s house. In hockey, the agent’s interest is probably always in doing the long term deal as soon as possible.
It’s hard to tell if your judgment is being affected when you’ve got a conflict, particularly when you’re dealing with situations that aren’t entirely black or white. Conflicts of interest do crazy things to a person. When you weigh the potential risk to Weber in terms of Nashville matching and him not having an NTC, it can cause the calculus to change slightly, as your brain imperceptibly throws the $1.62MM you make over the next four years on the scale.
These agency deals are effectively contingency agreements – the agent gets a cut. What makes them unusual is that the interests of player and agent are less aligned than they once were. The protection of the agent’s share, even if he gets fired, along with the possibility of getting fired before a big deal gets done creates an incentive for agents to convince their client to sign the big deal and take the attendant risks. Will Nashville give you an NTC if they match? “Sure; I mean they’re making their commitment long-term and I think they know that you want to have the same commitment that if you’re gonna stay there long term you should have a no-movement/no trade clause in the contract and you know that’s everybody’s wishes I believe.”
To be clear, I’m not saying that Weber was poorly advised. I don’t know what was said. The thinking on Nashville handing over an NTC/NMC seems optimistic in the extreme though and you wonder if Weber was similarly advised. If he was, he was probably not particularly well served, given that there’s no reason in the world for Nashville to limit their flexibility more than the contract already has. The other tricky thing about conflicts is that you can get away with them a lot of the time; in the sense that if nothing goes poorly, nobody really cares. When stuff blows up though – it can put you in a very difficult position, because it’s very difficult to defend the suggestion that you were affected by the conflict and preferred your own interests. It’ll be awfully interesting to see what happens the first time Weber’s in front of a camera after this.
(Incidentally, as a general rule, I think “Don’t do commission deals with people whose interests aren’t perfectly, or nearly perfectly, aligned with yours” is a good one. The beauty of the hourly rate is that you get independent advice. And, frankly, if you’re a star NHLer, you probably would pay a lot less in fees too.)