"Everybody Wants to Be in This Space": Will LeBron's Agent Boost UTA's Sports Division?
As top athletes increasingly look for Hollywood deals, Rich Paul seeks to even the playing field alongside heavyweight divisions at CAA and WME.
When Rich Paul met LeBron James at the Akron-Canton Airport back in 2002 — Paul was 21 and James was a teenager heading to Atlanta for the NCAA Final Four — he probably never imagined that someday he'd represent James in NBA deals worth $342 million and counting.
Seventeen years later, with 23 NBA players at his Klutch Sports Group, Paul is breaking into the Hollywood firmament via an investment from UTA and the newly created position of head of UTA Sports. It's an effort by the Jeremy Zimmer-led agency to establish a sports business amid a content arms race that is looking to athletes as creators.
The deal gives UTA an on-court business to the tune of $1 billion in contract value as well as instant credibility in athlete representation at a time when star players — unshackled by unwritten constraints of the past and exercising their social media-powered branding prowess — are increasingly in-demand. (The NBA players' union caps agent commission at 4 percent, and it's even less for rookie contracts; sponsorship and endorsement deals are far more lucrative.)
But Paul, 37, and UTA have formidable competition in this space from powerhouse CAA Sports and Endeavor-owned WME (the latter will continue to represent James and Maverick Carter's SpringHill Entertainment shingle and its nearly two dozen projects in development).
Those who know Paul say he is a tireless dealmaker, but his brashness has made him a controversial figure. He roiled the agent world in 2012 when he defected from CAA to form Klutch (which now has offices in Cleveland and Los Angeles) and took James with him. This year, he engineered Anthony Davis' very public trade from New Orleans to the Lakers.
"This is a very real opportunity, and sorting out whether it will manifest into a real business that can be meaningful or whether it will amount to a press release really comes down to how much of a priority it is in the long term," says Kyell Thomas, managing director of Octagon Entertainment, the sports agency that handles contracts for a roster of top athletes that includes Stephen Curry, Aly Raisman and Simone Biles.
While UTA's stake in Klutch is described as significant (the value of the investment was not disclosed), some industry observers wonder why the agency would not insist on buying it outright, thereby gaining more control. "When was the last time there was a strategic partnership among agencies that worked?" asks one agent rhetorically. "What you have to do is acquire them and get them fully integrated."
CAA is dominant in athlete representation, and WME has brokered a succession of content deals, including those involving Curry, David Beckham, Kobe Bryant, Kevin Durant and Odell Beckham Jr., the last one a recent production pact with Brent Montgomery's Wheelhouse Entertainment.
The Howie Nuchow and Michael Levine-run CAA Sports — which represents thousands of athletes — boasted a total contract value of $9.4 billion in 2018 with clients such as Cristiano Ronaldo, Dwyane Wade, Chris Paul and Carmelo Anthony. The agency brokered deals for Anthony's YouTube channel and NFL brothers J.J., T.J. and Derek Watt's Ultimate Tag game show set to launch on Fox, and it teamed Wade with Imagine Documentaries for a film about the former Miami Heat star that will air on ESPN in 2020.
"Athletes are not staying in one lane," says Lori York, CAA television and crossover sports agent. "They have become arbiters of style and culture and advocates for important issues. People want to hear from them."
WME partner Josh Pyatt first signed James and Carter in 2014, and that relationship has been an industry game-changer. These days, seemingly every sports star is vying for a production deal. "Everybody now wants to be in this space," says Pyatt. “The trick with these clients is that they must first and foremost be best in class. And secondly, they need to have people in place that move the needle on a day-to-day basis,” he adds. “These are people who know their business partner's brand, they know what will work, and they’re able to move faster because of it.”
And now with UTA, Klutch will be able to offer its non-LeBron players similarly synergistic opportunities in TV, film, publishing, speaking and podcasting. Paul already represents the off-court endeavors of his other clients, including Davis, Draymond Green and J.R. Smith. (Paul held talks with Endeavor, which has a well-established athlete sponsorship and endorsement business with IMG and entertainment practice with WME. In the end, UTA was far more aggressive, sources say.)
"LeBron showed that you could win championships and multitask," notes Montgomery. "And these players understand that their calls get returned a lot quicker when they're at the top of their game. They're capitalizing on their moment."
A version of this story appeared in the July 31 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.