Super agent David Falk counsels caution in NBA’s era of mega deals

If there is anyone who has helped usher in the era of massive contracts for athletes, it is sports agent David Falk.

US sports agent David Falk: ‘I just don’t think there are as many megastars as there was 20 years ago.’

If there is anyone in sports business history who has helped usher in the era of the massive contracts for athletes worldwide — think Australian NBA star Ben Simmons of the recent five-year $243 million deal as the latest example — it is sports agent David Falk.

The man behind the “Air Jordan” brand, Falk was trusted by the basketball megastar to oversee a career that had Michael Jordan signing huge deals on and off the court as one of the world’s most marketable athletes.

Simmons has been one of the players leading the charge during this NBA off-season as contracts seem to reach stratospheric levels, particularly those — like Simmons and new LA Clippers star Kawhi Leonard, who will be paid $US35 million per year ($49.7m) — who sign maximum or “max” deals under NBA salary cap rules.

The competition has just had an off-season of frenzied free agent contract signings and player movements that created media headlines around the world.

So therefore, it seems, there is no better time than now to be an NBA superstar, one of the best in the game, getting paid huge dollars with max contracts for the best on each team equating to roughly between 25 and 35 per cent of an NBA team’s $US110m salary cap.

Not the case, says the blunt-speaking Falk, who travels to Melbourne for a sports business lunch on August 23, coinciding with the two-match series between the Boomers, featuring Simmons, and the US national basketball team.

In fact, Falk says the very best players could be doing themselves a disservice by chasing the big dollars early in their careers. He says it could ultimately see them lose out financially.

“I just don’t think there are as many superstars as there used to be,” he tells The Weekend Australian. “So the question becomes just how many of these players deserve these really big contracts.

“But it is also a case if whether the best players are, in fact, underpaid because there’s a maximum there, which in turn creates a class of mid-level players who are probably being paid more than they should within the (salary) cap.”

Falk, who was at the peak of his powers in the 1980s and ’90s and was once considered the second-most powerful person in basketball behind only the legendary NBA commissioner David Stern, doesn’t want to come across as complaining things were better in his day.

He signed huge deals worth hundreds of millions of dollars for clients such as Patrick Ewing, James Worth, Allen Iverson, James Worthy and Alonzo Mourning.

He even got Australian tennis legend Tony Roche a deal with the old World TeamTennis competition in the late 1970s.

And he still has clients across the NBA, including Malcolm Brogdon, who was traded from the Milwaukee Bucks to the Indiana Pacers after agreeing to a four-year $US85m contract.

But he says the declining standards across the US players in particular, more and more of whom are playing in the college system for a year before heading to the riches of the professional NBA, means there are less in the very top echelon of stars.

“Yes, we have players like LeBron James, Kevin Durant, James Harden, Anthony Davis and some others. But beyond that I just don’t think there are as many megastars as there was 20 years ago.”

The very best get the big contracts, but given each team can have two “max” players it means some who are arguably not superstars — yes, even Simmons who critics argue has not even developed a decent jump-shot just yet — are getting astronomical deals.

But Falk also argues the very best should be freed from “max” contracts restrictions, which hamper their earning power. He cites the example of James when he was at Cleveland when the team signed teammate Tristan Thompson, a handy if limited centre.

“You had a case where LeBron was getting paid $US30 million and Thompson something like $US18 million,” Falk says. “But if you had $US48 million to spend under less restrictions you probably would be spending $US40 million on LeBron, because that is what he is truly worth, and $US8 million on Tristan Thompson. No disrespect to him, but that would probably be fairer.”

Falk says the teams have to also be careful not to damage the overall standard of the NBA by giving average players huge contracts, thus not incentivising them enough to play to their fullest potential. That and the sheer amount of players moving teams, along with a lack of superstars, could hurt broadcast ratings and sponsorship revenues in the future, which would damage overall earning ability.

“Players are partners with the league now. They get 50.1 per cent of league revenues. It is not an ‘us’ versus ‘them’ case any more. They have to work together for the betterment of the league and they will share in that. They have to think about the business side.”

That is at least happening for some players, who with the increase in Wall Street and Silicon Valley executives and billionaires buying NBA teams have the ability to tap into the expertise of their owners’ business networks should they choose to.

With examples such as Durant moving to the Brooklyn Nets with at least the potential of being close to Wall Street and New York’s entertainment industry in mind, it is a factor Falk stresses players need to be aware of — something he counselled Brogdon on.

“When he went to the Bucks they had three very smart owners who are highly successful, so I told him he had to get to know them to develop relationships that will help you after basketball.

“Now he will be at Indiana with (billionaire owner) Herb Simon, who is the largest shopping centre owner in America. He has to get to know him too.”