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The Future of Sports Management: XTS Sports

Posted Aug 25 2008 6:38pm
A couple of weeks ago, I had the pleasure of talking to agent Adam Bierman and former pitcher Jerry Merz, who is the Director of Player Development at XTS Sports. Mr. Bierman and I have talked over the past couple of months about doing interviews, and we eventually came to the subject of how XTS runs. At first, I was baffled by it. But once we started talking more I started to realize that this is truly the future of sports management. What they do takes a lot of time and requires a lot of work. Mr. Bierman works closely with CEO Justin Urbas, along with others at XTS Sports to make their agency one of the premier in the business.

Sports agents have not been around forever. For awhile, many owners took advantage of great players to continue having success. While this would help the team from a chemistry perspective, it started baseball on a downward spiral between player and management relationships. “Owners were taking advantage of uneducated players in order to make more money for themselves,” Bierman says. This is true, but what were the first steps in player representation? “Lawyers got involved and became someone a player could trust.” From there, the Union took shape and a new generation in baseball was born, as Jerry Merz put it.

So how did XTS grow to where it is today? Justin Urbas, along with Adam Bierman and others, began taking draftees and hoping they would develop into major league players. “As they grew, we grew,” Bierman says. In about five years in operation, XTS has grown to no longer taking amateur players. Yes, this is similar to how most agencies grow to where they are today, but I am going to take you deep inside XTS to find out what they are really doing.

We all know that these contracts are all based off numbers. You compare them to a player, or a position, and then you average their contracts to form a new one, in simple terms. Most agencies work out a contract for the player to get the best deal possible, and then the agent charges about 5% of what he makes over x amount of years. So, Alfonso Soriano signed an eight year deal worth 136 million dollars. His agent, Diego Bentz, will make 850,000 dollars every year off Alfonso Soriano’s contract. “So every year Alfonso Soriano will pay his agent 850,000 dollars to take him out for dinner when he is not even negotiating a contract!” Diego Bentz will be representing kids younger than me by the time Alfonso Soriano pays him 850,000 dollars for the last time. Does that sound right if Bentz is not even negotiating for Soriano anymore? XTS Sports takes a different approach.

XTS Sports charges their players hourly for the amount of time spent on a contract. They do not charge each year, just one bill at the end of each negotiation for the amount of hours spent, just like lawyers charge an hourly rate. So instead of Alfonso Soriano paying 850,000 dollars a year to his agent, he pays 1,000-2,000 dollars an hour in one payment to his agent and some of the “stat geeks” who helped develop his contract. Not only that, but they work with players off the field to increase the money they make from baseball: “We help capitalize on the opportunity and to take advantage of opportunities in business. They can lay the ground work of their business while playing, or explore it when they are done. They could even start in minor leagues.” For example, Athletics outfielder Aaron Cunningham likes tattoos. “He would love to get involved with tattoos eventually.” So what XTS will do is get him involved in some of the ventures so when he is ready, he can get involved. When I asked Aaron about it, he said, “What they are doing is taking baseball, and turning into a business. It allows you to make money, and them to make money.

One question I had about it is how much time do they have to set up a business? Rangers outfielder Mike Hernandez wants to get involved in car dealerships, but does he have the time to invest in one or learn more about it with such a demanding schedule? “That is up to the player. We work with dynamic personalities and they get involved because they want to maximize profit. So, if someone wants to get in the restaurant business or open one of their own, we will help them get it started by marketing it. We will help build it, put some value in it, and basically put the pieces in play.” So I ask the question again, why aren’t young players like Jacoby Ellsbury who are not making a lot more attracted to this type of management?

Agents try every road trip to take players away away from their agencies. One player told me they just call up to the hotel room to talk. Or they say, “I’ll be in town, let me take you out for dinner.” One player, who wanted remain anonymous sometimes takes agents up on their offer just for a free meal and has no intention of leaving the agency they are currently at. XTS Sports is definitely one step ahead of the game in terms of sports management and plan to keep growing and expanding in hopes of becoming the top agency in the sports world.
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