Making millions for NBA Stars: the high-powered world of super agents David Falk, Curtis Polk and Mike Higgins.
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"George, I'm David Falk. I just wanted to say hello," Falk says.
"Hi, David, are you in from Chicago?" asks Steinbrenner, a friend of cigar smoker Jerry Reinsdorf, principal owner of the world champion Chicago Bulls and the Chicago White Sox, with whom Falk does a lot of business.
"No, from D.C.," Falk replies.
"Oh, you're in Washington," Steinbrenner says. After a few more pleasantries, Falk gets a pat on the arm from Steinbrenner and is off into the room that provides sanctuary to celebrities and VIPs during halftime of the game between the New York Knicks and Houston Rockets, two teams in which Falk has significant interests.
"We represent three players in this game," Falk says.
The 46-year-old Falk is the founder, chairman and chief executive officer of FAME, or Falk Associates Management Enterprises. But in this room, David Falk, 6-foot-2 out of Syracuse followed by George Washington University Law, is better known as the agent to Knicks star Patrick Ewing, as well as Knicks rookie Walter McCarty. On the Rockets, FAME represents rookie Othella Harrington.
Soon after introducing himself to Steinbrenner, Falk is studying the crowd like a raptor. Not a Toronto Raptor, but one of the voracious deoxyribonucleosaurs in the movie Jurassic Park. This is not a bad thing to be in this room, where comedian Billy Crystal is holding court, Patrick McEnroe has people asking why he is no longer on the tennis court and Falk is getting something to eat because he won't be going to dinner until after the game being played on the court. Game? What game?
Falk is talking to Ken Ross, his friend and co-executive producer of the movie Space Jam, when a representative from the Nickelodeon network introduces herself and earnestly explains to Falk something about a new project that he might want to present to "Michael or Patrick." As in Jordan or Ewing. Falk is gracious. Hey, who knows? He tells the woman that he would be glad to look at the project and she should send it to him in Washington. Ms. Nickelodeon thanks Falk and is gone a matter of seconds before Andy from American Express virtually beams into her spot.
"David," Andy says, "remember me? I came down to Washington to talk to you about Michael?"
"Absolutely," Falk says, not missing a beat. "You need to make another trip down so that we can talk about Patrick."
"All right," Andy says. "Was everything OK with Michael?"
"Oh, yeah," Falk says, then pauses. He scans the room, then puts his arm around Andy and motions with his head for him to move to a quiet corner. Rob Urbach, FAME's vice president of marketing, walks over with them.
"Everybody's looking for action," Ken Ross says, chuckling and enjoying the show.
Representing so many players in one National Basketball Association game is not unusual for Falk and partners Curtis Polk, the 37-year-old president and chief operating officer of FAME as well as a lawyer and certified public accountant; and Michael Higgins, FAME's senior vice president, who turns 38 in May, who began his career as a Hollywood agent.
The three had worked together in the team sports division that Falk headed at Washington, D.C.'s ProServ, an agency that has traditionally focused on individual sports. They left in 1992 to form FAME so they could concentrate on representing athletes in team sports. Now, Falk, Polk and Higgins are the elite members of an increasingly important group in the sports world: the small cadre of financially sophisticated agents who possess marketing expertise. In a time of increasing competition for the entertainment dollar, they represent clients who have notoriously short careers and need to secure strong financial futures quickly. For the FAME partners, this all adds up to very long hours and between 150 and 200 days a year spent on the road. All three share a way to relax: they smoke premium cigars.
"I wouldn't say I'm a heavy smoker of cigars. I've probably smoked cigars on and off for about 10 years. Probably in the last three years I've gotten a good supply of up-brand cigars," says Falk, a man who, in his own field, is often instrumental in defining what the up-brands are. "It's like a good wine; you start to appreciate the better ones. I really started enjoying smoking cigars while playing cards. I'd say in the last year, I've probably smoked six a month. Normally, one or two a week. I love Cohibas and I love Hoyo de Monterreys. They're so smooth. You come to appreciate those things. Three or four years ago I wouldn't have known. I have a lot of Cohiba Robustos, and a friend gave me the longer Hoyo de Monterreys, the double corona."
While Falk doesn't smoke at home in front of his two daughters, he indulges himself on the road. He is careful, however, to pursue cigars as his own personal passion, and not merely because they have become trendy. "I'm almost fighting myself," he says, chuckling. Falk can afford as many of the best cigars that he wants, yet he says, "I don't want it to become a fad. I want to enjoy it. To me it's more like drinking a great wine. I don't drink it every day and I don't smoke a cigar every day. When I smoke them, I really enjoy them." He says smoking a cigar slowly helps him leave behind a bit of the "cutthroat world of celebrity representation."
Falk attributes the success of FAME to the diverse strengths of its partners. He considers that his major role is to bring experience, creativity and instincts to the partnership. "Curtis is my consigliere, if you will, and I think he's brilliant," Falk says. "I think he's strategic. I think he's analytical. And I think he's 100 percent committed to me and to this office. He advises, and I invariably follow his advice. I don't know that I always agree, but I invariably follow his advice.
"Then Michael comes in," he adds, referring to the graduate of the University of Southern California and Whittier Law School, who looks like an ex-football player. "Michael Higgins is probably much more of a people person than either of us." Higgins partied until 5:30 a.m. with a few of FAME's rookies during the All-Star break in Cleveland. To protect the innocent, the details cannot be reported. Falk praises Higgins' commitment and loyalty to the firm. "I'm a great believer that when you form a team, you should never be afraid to have people who have equal talents or even better talents than you do," says Falk.
No one doubts that, even though FAME is a partnership, it could easily be called "Team Falk." Basketball Digest has ranked Falk as the second-most powerful person in the NBA, subordinate only to league commissioner David Stern. Since 1991, The Sporting News has placed Falk in the top 32 on its list of the "100 Most Powerful People in Sports." And in 1995, Advertising Age named Falk one of the top 50 marketers in the United States. Falk enjoys the honors, but nevertheless believes that focusing on him sells FAME short.
"A player will gravitate to one person. It's not always to me. A lot of the younger players sort of gravitate to Mike. Like Bobby Hurley or Calbert Cheaney," Falk says, protesting that he gets too much of the credit. Then he lapses into coach language: "We present different looks. I think each of us could be successful in our own right, but to use the most overworked term of the decade, I think we have a synergy."
Synergy was very good for FAME last year. During a one-week period last summer, the company negotiated 13 salary contracts--for eight free agents and five rookies--that totaled $410 million. The players' union sets 4 percent as the maximum that agents can charge a player for negotiating a contract. At that rate, FAME's cut of the 13 contracts could be as much as $16.4 million (the partnership doesn't always charge the maximum fee).
Polk came up with the strategy and all the deals were handled from FAME's "war room." "We just set it up in our conference room and had a big chart, computers; we had all the numbers and we put up all the teams," Higgins recalls with delight. "We had six phones put in and everything. We had so many deals to negotiate. It's a discussion: 'All right, this is what's been put on the table. Are you talking to Houston?'" Each agent looked out for the interests of all the firm's clients, whether or not he had worked directly with a particular client, Higgins says. "I have a relationship with [president and general manager] Stu Jackson of the Vancouver Grizzlies who I talk to on a daily basis and who might have some [salary] cap room, and they might be interested in a Chris Gatling [now of the New Jersey Nets], and yet I don't work with Chris on a day-to-day basis. But I was talking to them about offering Chris a deal this summer, although we did a deal with Dallas."
Falk, Polk and Higgins were constantly on the phone while in simultaneous communication with each other--kind of a "three-headed monster," Higgins says.
The agents of FAME had to move fast. They did a deal for Michael Jordan first: 45 minutes, $30 million, one year. Nothin' but net. They made a pact for Bullets forward Juwan Howard to go to Miami for $101 million, then secured $105 million for Mourning with the same team. But the league later voided Howard's contract, ruling that Miami had violated the salary cap regulations. The decision left Howard without a contract and in serious jeopardy of taking a 50 percent pay cut because most of the teams by that time had considerably less room under the salary cap to match the $101 million agreement. Polk had to scramble to get a $105 million deal by which Howard would remain with the Bullets for seven years. Left out was Chapman, who had played for Miami the year before.
"We had a certain position because of the power of an Alonzo Mourning and Miami's desire to sign Juwan Howard to really leverage Miami and to force them to do Rex's deal first," Falk says. "Out of respect for Pat Riley--I said it before the thing started and I'll say it again, I have great respect for Pat Riley; there's no doubt he's one of the great coaches in the game and maybe one of the great coaches ever and he's very competitive and I respect that because so am I--I didn't want to leverage Pat Riley or [Heat owner] Mickey Arison. I think when we took the pressure off and [Riley] had a different vision of how he wanted to construct the team, I'm not sure that we brought maximum leverage to bear on behalf of Rex Chapman, so I thought I'd let him down."
Miami made offers that Chapman and Falk considered too low and Chapman ultimately landed in Phoenix with a one-year contract, still a FAME client, but not nearly as rich as he and his agent had hoped. What happened to Chapman is not Falk's first disappointment and it surely won't be his last, though usually they don't involve clients already in the FAME family.
"I would say that my greatest disappointment probably was not being selected by Grant Hill to represent him. I'm a huge fan of Grant Hill and his family," Falk says of the third-year Detroit Pistons guard. Hill's father is former Dallas Cowboys running back Calvin Hill and his mother, Janet, is a high-powered Washington consultant. Hill has done quite well in the endorsement market, and his basketball talents are often compared with Jordan's at the same point in his career.
Falk says that it was his experience with Jordan--making mistakes and learning from them--that made him want to bring his knowledge to bear for Hill. "All of a sudden you have a young player who's very special and you don't have a chance to take all [your own] special, unique knowledge-- and it is unique-- and put it to work for him. It was a disappointment. I'm not angry about it."
Polk, a University of Maryland alumnus, describes a similar disappointment with U.M. forward Joe Smith: "I thought that Joe and I hit it off and could relate to each other very well. I had the advantage of being able to spend a lot of time with him because Maryland is just down the road here. I think that his college coach likes us and respects us and knows that we're good at what we do."
Polk says he feels that the agency sometimes loses players because others around them--family and friends--lead them into bad decisions based on their own agendas. "We tend to put a lot of heart into the effort to get the kids, and you feel that if they could really look at it on the merits, we should get [them as clients]."
A second-year player with the Golden State Warriors, Smith has yet to develop a large marketing portfolio. One wonders if Falk's and Polk's declarations of regret are not just telegraphed invitations to Detroit and Oakland: There's still room for you at FAME. Grant, babe! Joe, buddy! Guys, are you listening?
Sometimes simply having so many big fish as clients can dissuade new players from signing on, although Polk insists that FAME works equally hard for all its clients. FAME serves as agent to nearly 40 NBA players and another 15 in football, baseball and overseas basketball. Of these, of course, one stands out: Michael Jordan. Falk's representation of Jordan goes back more than a dozen years, even before he started his firm. He calls Jordan the most famous person in the world. Falk should know. By all accounts, much of Jordan's fame is due to the efforts of FAME.
"Most outside observers spend hours trying to analyze: 'Did Michael Jordan carry David Falk along for a nice ride for the past 12 years?' Other people wonder: 'Did Dr. Frankenstein Falk create Michael Jordan in a laboratory somewhere?' Michael and David haven't spent three minutes in 12 years worrying about it." Sitting in an overstuffed blue leather chair in his Washington office, Falk dismisses the question. "We just concluded that it's been great. For me, it's been a tremendous honor to have a chance to work with the greatest athlete in history, with someone I have great fondness for as a human being, for whom I have great respect as a man and whose loyalty to me personally I appreciate."
Working with FAME has helped make Michael Jordan a tremendously wealthy man, and there are clear indications that the partners of FAME are also doing quite well. Agents typically receive 20 percent of the revenue from endorsements and other off-the-court deals. By some estimates, Jordan has amassed close to $200 million from Nike, Gatorade, Coca-Cola, cologne and cartoons. Two of Jordan's recent non-basketball ventures were sheperded by FAME: "Michael Jordan," the fragrance made by the Beverly Hills designer Bijan, was cited as the best marketed product of 1996 by the American Marketing Association, and Jordan's first cinematic turn came last fall with Space Jam, an animated joint venture between FAME and Warner Brothers.