While hiring one of the big companies simplifies negotiations and creates new marketing opportunities for the players, it has the potential to be extremely profitable for the corporations, too. They collect between 2 and 4 percent for negotiating the athlete's contract and another 20 percent for negotiating endorsements. It's all about content. There are 200 TV stations trying to do 24-hour programming, hundreds of Internet sites with chat sessions and video games, radio shows needing guests, movies needing cameos, and they all desperately need content. Companies such as SFX can use these holdings to offer their athlete clients the chance to get publicity in a variety of mediums.
More publicity usually means more endorsements and other money-making opportunities.
You see where the money is. This is the future. And if you can't offer these other services for your clients, you are in trouble. Falk, now chairman of SFX's sports group, said the multiservice companies offer more than just financial resources and marketing expertise. Advantage in Numbers By pooling top athletes into one vast company, they gain leverage in everything from endorsements to Internet ventures.