The National Basketball Association (NBA) agency landscape is dominated by a select few agencies, namely Creative Artists Agency (CAA), Wasserman Group, and Excel Sports Management. In general, nearly a third of all professional players across every sport are represented by only five agencies. Itâ€™s not an easy world to break into or gain any ground if youâ€™re a newcomer.
However, an agency established in 2012 by the name of Klutch Sports and its founder and CEO, Rich Paul, have been dominating the NBA headlines. Recently, Paul and client New Orleansâ€™ Pelicans superstar Anthony Davis opted to make Davisâ€™ trade request public, and Paul was alleged of coordinating leaks to sway trade leverage. Then, Paul and friend/client LeBron James watched college basketball powerhouses Duke and Virginia play in Charlottesville.
The headlines make sense when it comes to Paulâ€™s handling of Davisâ€™ trade request. You have a top-five player demanding a trade, being fined for doing so, and with the New Orleans Pelicans not completing a trade prior to the trade deadline, that saga continues.
However, in the case of Paul and James watching Duke and Virginia during the Lakersâ€™ East Coast road trip, the headlines donâ€™t add up. Klutch sports was just one of the many agencies and agents who were at that game. Yet, there was no peep made about other agenciesâ€”only Klutch Sports.
As Rich Paul himself told Dave Mcmenamin of ESPN,
â€śItâ€™s an issue when you see several media people shining a light on it as if itâ€™s a negative thing. But when I was one of his [Jamesâ€™] homeboys, one of his ‘posse,â€™ and we went to see Steph Curry in Detroit [for a Davidson-Wisconsin NCAA Tournament game in 2008], nobody said anything. Nobody said nothing.â€ť
There are agents and agencies trying to increase their exposure to top collegiate players at every single game. And those attempts go beyond just the games. Yet whyâ€™s it painted as a spectacle when only Klutch Sports does it? Answer: Klutch Sports and Rich Paul are a threat to the status quo and current agency hierarchy. The agency world is all about competition and â€śitâ€™s just businessâ€ť until thereâ€™s a viable threat that can actually take that business from established agencies. And people are especially uncomfortable when their livelihood is threatened.
That threat and discomfort motivates a predictable response in the form of an attack. In the agency business, public relations tactics are used to paint the threat as the bad guy. One of those tactics preys on a reality of human psychology: we conflate quantity of mentions with legitimacy of the message. In other words, the more you see a message, the more youâ€™re like to believe it. â€śOh, everyoneâ€™s saying it, so it must be true.â€ť Same thing applies here with Klutch and the narrative other agencies are trying to create. Paint them in a certain light enough times and the public will buy it.
The reality is, when the establishment tries to label you as the bad guy, you know youâ€™re doing something right. I see it all the time with medical providers who choose to work outside of the insurance network and get shunned by their in-network counterparts. Itâ€™s a survival defense mechanism.
Adding to that defensiveness are two key things: first, Rich Paul isnâ€™t the typical, agency type. Heâ€™s young, black, and doesnâ€™t have â€śbusiness school pedigree.â€ť His pedigree comes from an entrepreneurial spirit, with his first business selling hard-to-find, throwback jerseys. Thatâ€™s actually how he met LeBron in the first place. Paul was at the Cantor-Akron airport wearing a Warren Moon jersey that caught LeBronâ€™s eye. LeBron asked Paul where he got it and after learning about his business, they exchanged information and developed a close friendship.
Secondly, Rich Paul worked for CAA under the tutelage of Leon Rose, but then decided to branch out on his own in 2012, taking on LeBron as a client. So you have an individual from a very different background who cut his teeth at the major agency, and then decided to leave while taking the agencyâ€™s biggest client with him. Itâ€™s understandable that CAA would be bitter.
Adding to the level of threat is Paulâ€™s background growing up in East Cleveland and understanding the commitment and effort it takes to make a path out. He has a unique perspective and relatability with NBA players and prospects that not many agents have. Further, this personal connection with his clients may underlie why Paul relentlessly champions their interests and wields player leverage like never before.
Paulâ€™s unabashedly unafraid of supporting his clients in all their endeavors and dedicated to getting them what they want. We saw this recently with Paul trying to fulfill Anthony Davisâ€™ trade request after treading water with the Pelicans for seven years and earning only one playoff berth. Those actions left many with bitter tastes in their mouths, but Paul served his clientâ€™s interests to the best of his ability. Rich Paul understands how to disrupt a status quo system because he himself broke through a societal and financial system thatâ€™s built to maintain status quo.
If youâ€™re thinking that Paulâ€™s success is attributed solely due to his friendship with LeBron, why arenâ€™t more of LeBronâ€™s many friends starting multi-million dollar companies in cutthroat industries? Additionally, nearly every successful person has had help along the way, particularly in the agency world.
Itâ€™s a world thatâ€™s filled with nepotism and making the comfortable even more comfortable. But when Rich Paul, whose own ingenuity and hustle connected him with LeBron James in the first place, uses his key connection to help build a new business, itâ€™s an issue. Come on.
Hereâ€™s Rich Paul speaking on that point:
“Think about it from this perspective…on one end, you got a â€?posse.â€™ Or theyâ€™re â€?leeches.â€™ Years ago it was leeches or â€?hanger-ons.â€™ Theyâ€™re OK when they can call you that, but theyâ€™re not OK when itâ€™s a CEO, and you have the biggest superstar in the world supporting somebody that he trusts to do his business off the court and just who happens to be a friend.”
Personally, I study Paulâ€™s approach and tactics because heâ€™s been so effective in such a short time. In seven years, he has 17 clients and is approaching a billion dollars worth of NBA contracts with countless more negotiated in sponsorship deals. So called â€śluckâ€ť is the intersection between opportunity and preparation. No one sums that up better than Rich Paul.
Thereâ€™s no denying what heâ€™s building is a threat to the monopolistic agency world, and I donâ€™t think he would have it any other way. Otherwise, heâ€™d still have a cushy CAA agency position. Heâ€™s a young, black CEO who understands his leverage, the playersâ€™ leverage, and how to use both. He understands change takes disruption, and heâ€™s relentlessly willing to disrupt. No one loves the status quo more than the status quo, and true discomfort comes when the comfortable canâ€™t just label a movement as â€śfringeâ€ť anymore.