IBISWorld: Who Are Baseball's Behind-the-Scenes Agents and
As Baseball Prepares for the All-Star Game, Focus on the
'Conduits for Growth'
Baseball enthusiasts next week
will turn their attention to Pittsburgh's PNC Park for that
glorious annual rite of mid-summer, the All-Star Game.
Besides the fans in attendance at Pittsburgh's ballpark, and
the millions more watching on television, there'll be
another group of baseball loyalists routing for their
favorite players: the agents and managers who guide the
careers of baseball's major leaguers.
So who are these behind-the-scenes powerbrokers who help
shape the business of modern professional sports?
They are part of a fraternity of handlers who shepherd not
only professional athletes, but also entertainers, authors
and other public figures.
And they are a dispersed lot engaged in a decentralized
industry, according to business information analysts
IBISWorld (http://www.ibisworld.com), which offers among its
deep reservoir of industry research a number of
comprehensive reports on talent agents and managers, as well
as various other aspects of sporting, entertainment and
cultural industries.
"There are about 49,000 people in the U.S. engaged in the
business of representing and managing artists, athletes,
entertainers and other public figures. Of those, the vast
majority work for small shops with a low number of clients,"
says Richard Buczynski from IBISWorld. "Indeed, we estimate
that of the approximately 35,000 businesses in the industry,
only about 3,500 have employees. Most agents and managers
work on their own."
Average earnings for so-called "non-employing
establishments" (i.e., freelancers) was $155,839 last year,
while average earnings per employing establishment was
higher at $1.2 million.
Collectively, firms in the talent agent/management arena had
revenue of about $5.4 billion last year, up 4.4 percent from
2004. The annualized rate of growth from 2000 to 2005 was
3.7 percent.
IBISWorld forecasts revenue growth of 2.8 percent in 2006,
with an annual growth rate of about 3 percent per year
through 2010.
"Agents and managers generate earnings growth by pushing up
payments for the talent they represent," explains
IBISWorld's Buczynski. "The ability of sports management, as
well as movie studios and others, to offer increased
salaries and fees for talent is closely tied to the health
of the economy. Industry revenue growth over the next few
years will be impacted by such macroeconomic factors as an
anticipated slowdown in overall job creation and rising
interest rates. As rising inflation and higher interest
rates continue to chip away at household budgets, ten bucks
for a hot dog and a beer at the ball game may not sit well
for many fans."
Historically, the industry increased rapidly in the
mid-to-late 1990s as lucrative contracts for television
rights increased, and more costly use of celebrities for
product endorsements created a larger capital pool for
agents and managers to chase, says Buczynski.
"Our research collates the relationship between the 1990s
economic environment - characterized by increases in
productivity, employment levels, personal income and leisure
time - and the ability of agents and managers to push up
salaries and fees paid to sports and entertainment talent,"
says Buczynski.
"As we watch the game in Pittsburgh next week, it will be
interesting to keep in mind the interdependency between the
overall economy and just how much a home run slugger can get
paid," adds Buczynski. "For the talent they represent,
agents and managers play an important role in that linkage -
they are the conduits for growth."
ABOUT IBISWORLD
The 35-year-old IBISWorld provides a portfolio of business
information analysis products for a range of business,
professional service and government organizations, including
industry market research, company research, and economic and
demographic information. The company's products are known
for their breadth and depth of research and analysis
covering the entire U.S. economy, incorporating both
financial and non-financial information impacting tracked
industries and companies. IBISWorld's products are available
as reports available on the Web (http://www.ibisworld.com)
or for delivery through enterprise subscriptions for banks,
companies and government agencies.
