The Inside Game

The telephone is an extension of David Falk's arm, the circuit breaker bridging hand and ear. He sits on a beige couch in a softly lighted hotel suite in exurban Detroit, a power center unto himself, at the junction where gossip and commerce meet.

"There are people who work the telephones," observes Len Elmore, a rival sports agent. "There are people who massage the telephones. And then there's David Falk."

Today we will see what his phone mettle is made of. It is barely noon, seven hours before the National Basketball Association's 1993 draft, and Falk has already placed several dozen calls.

He hates to leave messages. If necessary, he will wait on hold for minutes at a time--not that he often has to. He knows that few people in the rich, small world of the NBA will keep him waiting for long, especially on draft day, the agents' playoffs, when the grapevine throbs with each rumored maneuver.

Falk is bald, slope-shouldered and tall enough not to look like a 12-year-old when back-patting Michael Jordan, Patrick Ewing or any of his other jumbo clients. He's dressed casually in an openneck knit shirt, slacks, textured white socks and tasseled loafers. But make no mistake: He is wound for work. His dark eyes make (continued on page 128)Inside Game(continued from page 120) relentless contact; his mouth is tightly set, even when he laughs.

"There are two worlds in the NBA--the media's world and the insider's world," Falk says. "It's good to feel you're on the inside."

He is even more inside than usual this year. He represents three surefire lottery picks, players expected to be chosen among the top 11: Calbert Cheaney, the college player of the year from Indiana; Bobby Hurley, the point guard from two-time national champion Duke; and Shawn Bradley, the seven-and-a-half-foot Mormon from BYU who looks like Opie Taylor writ large. "The first seven picks are locked up," Falk says.

The absolute assurance in his voice prompts a question: Can an agent manipulate the draft? "More than you think," Falk says with a mild air of conspiracy. "You can't pick a team, but you can shape the puzzle. The most direct way is to ask a team not to draft your player--and hope it'll understand that the risks are too great."

Agents enjoy tremendous leverage at that juncture because any draftee can sit out (perhaps to play in Europe) and then enter the next draft, leaving the team that first selected him in the cold. Three years ago, Falk suggested to Sacramento that Dikembe Mutombo, the urbane 7'2" center who speaks six languages, might not mesh well with Kings coach Dick Motta, a drillsergeant type. As Falk tells it, Kings management switched gears and spent its third pick on Billy Owens instead. Denver then gobbled Mutombo at number four, and Sacramento still lacks a frontline center, the rarest commodity in the game.

"I don't view myself as the 800-pound gorilla," Falk says. "We didn't demand that they not draft Mutombo--we respectfully requested it. If there's a mutuality of interests, and you are fair and logical, people will listen."

This year there are no dread scenarios. Falk is certain that Hurley will go seventh to Sacramento and Cheaney sixth to Washington--fine fits for both. He believes that Bradley will be picked second, by Philadelphia, after the Orlando Magic takes Chris Webber at number one. But something is nagging Falk--"an instinct," he says, that Orlando might depart from the script.

At 12:30 P.M. Falk finally gets through to the Magic's "war room" and John Gabriel, the team's personnel director. Falk perches forward on the sofa, his eyes drilling the middle distance. There is late-breaking news. When Falk is at peak intensity, as for this call, you can almost hear him listening. "You'll go to three and get [Anfernee] Hardaway? Slow down, you're racing. You've decided that's the guy you want above everyone else? Holy shit!"

Falk breaks the circuit, lays down the phone and leans back heavily on the couch. "That's wild," he says, drunk with insiderness.

Twelve hours later, after 3 million people tuned in to the draft on TNT, after Bradley wound up in Philadelphia as planned, after Cheaney and Hurley went precisely as projected, Falk rests easy in the hotel lounge. His tie droops from his collar; he's sipping his second Bailey's on the rocks. No other agent had more than one client in the top seven. "This is our championship tonight," he says, "and we had the best year of anyone in the country."

Falk's clients are happy. Their families are relieved--especially Chris Hurley, Bobby's mother, who is sailing weightless through the lounge with an empty bottle of Dom Pérignon, like the mother of the bride after a smooth reception.

As a friend of the Hurley family leaves the table, he deferentially suggests that Falk seek a five-year deal for Bobby for $2.5 million per--12 percent more than the seventh pick got in 1992. " 'Two-point-five for five'--just keep that little slogan," the man says.

Falk nods and smiles, but he already knows that he will not get a $12.5 million guarantee for Hurley.

He will get more.

•

As the tide of NBA money swells, the league's player agents glide along the crest of its wave. No longer mere hagglers in fancy suits, they are the caretakers of multinational symbols like "Air" and "Shaq," the basketball überstars who define the edge of cool itself for millions of hot-to-buy teenagers. "The line between sports and Hollywood entertainment," observes Tom Carmody, vice president of Reebok's sports division, "is as broad and gray as it ever has been."

The newera basketball agents talk like CPAs on steroids, yammering about income streams and current value. They have to talk that way, because they wangle contracts that were once reserved for cinema idols or the chief executive of Shell Oil. Last October, agent Steve Endicott landed Larry Johnson, Charlotte's aching-back forward, a 12-year deal for $84 million. Days later, Bill Strickland, a top-tier NBA agent for the mammoth International Management Group, reeled in $74.4 million over 15 years for Golden State rookie Chris Webber, who has yet to prove he can make half his foul shots, much less lead a team to an NBA championship. The going annual rate for an NBA "super"--Larry Bird's $650,000 salary stunned the league in 1979--had entered hyperspace.

It got so wild that agent Harold MacDonald didn't just reject the New Jersey Nets' eight-year offer of $69 million for Derrick Coleman, a power forward whose daunting skills are matched by his dubious attitude. MacDonald mocked the offer by producing a custom T-shirt for his client. On Coleman's chest lay the number 69, circled in red and slashed with a diagonal line. On his back, a smirking I Dont Think so. No one around the NBA mistook this message as a campaign against oral sex.

For the agent, basketball fever can produce a tidy income. The National Basketball Players Association allows agents to commission up to four percent of a player's negotiated salary. Most charge three percent or less, though this figure can reach eight percent or more if the agent also manages the player's money and other affairs. Marketing fees--the skim for landing a shoe deal, for example--are unregulated and range from 15 percent to 25 percent. An NBA player who might make $2 million on the court and half a million off it would pay his agent about $200,000 a year. A Michael Jordan, who is reported to rake in close to $40 million in product endorsements even after his retirement, could support Falk Associates Management Enterprises (or, as Falk calls it, FAME) to the tune of $6 million annually.

In fairness, the top representatives work hard for their money. Bob Woolf, who before his death last year was the dean of player agents, summed up the omnibus nature of the job: "Not only do you try to get the best contract for your client, but you also deal with bills, trusts, wills, insurance programs, taxation, movies, autobiographies and TV appearances." Not to mention the three A.M. phone calls from Seattle when clients are stressed out about the latest trade rumor or shooting slump or siege of marital discord.

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NBA players are cocooned by celebrity and alienated by a work life of one-night stands. Their agents are their lines to the outside world, and no demand is too outlandish. One Woolf client phoned him in Boston from a hotel room in Hawaii and ordered him to call the hotel manager and complain about the hot water. Another refused to fly in to sign his contract unless the team bought a ticket for his dog as well. A third called from a motel in San Diego and commanded Woolf to wire him $10,000 within 30 minutes.

"He said he'd been kidnapped, handcuffed and chained to a bed," Woolf recounted. "He'd wriggled free just enough to reach the telephone, and he said the kidnappers were going to kill him if he didn't get them the money." Did Woolf wire the ten thousand? "No, I knew this had to be to pay for for drugs. So I told him I couldn't do it. The guy is still living."

While an agent's lot may at times be onerous, there are more than enough wanna-bes eager to join the ranks. The Players Association currently certifies 210 agents, who compete for only 324 active NBA players--and, most fiercely, the 54 potential clients drafted out of colleges each June. As in most businesses these days, the big fish starve the smaller ones: About two dozen high-powered lawyers corner most of the market. Falk's operation is especially select--"a boutique for superstars," in his phrase. He has no interest in what he calls drones, the marginal players who flesh out pro rosters. Ten of his 22 NBA clients rated among the top four picks over the past nine drafts--more than 25 percent of the players in that lucrative market niche.

Some newcomers crack the barrier with drop-dead résumés and reputations to match. Len Elmore, one of a handful of rising black agents, went directly from a ten-year pro basketball career to Harvard Law School, then did a stint in the Brooklyn district attorney's office. All around him he saw the personal and financial wreckage of former teammates and opponents, still-young men unprepared for "what happens when the cheering stops and you have to face the unknown and it's pitch black in front of you. What we hope to do is illuminate that pitch-black before they have to start walking." Elmore preaches selfreliance and community responsibility and views his role not simply as an agent, but as "a counsel in life."

But the big money has also drawn some bottom feeders--"slimebuckets" to Falk, "the sleaze factor" to Elmore. "The incentive is certainly there to bend the rules," Elmore says, "and some just break them." The Players Association has decertified a number of agents for mismanaging their clients' funds, and it may bar an agent for making prohibited inducements--whether financial incentives fronted to a college player, or kickbacks or "referral fees" to the player's coach or some friend or relative.

"I know with a great deal of certainty that at least three [first-round draft picks in 1993] received some incentive to sign with their agents," says Bill Strickland. "I got two separate phone calls for someone drafted this year, in which the person said, 'Pay me X dollars and I will facilitate the introduction.' I said, 'I don't do business like that.' And the guy said to me, 'Well, that's what the big white boys do.' "

Terry Dehere, a rookie guard out of Seton Hall who ultimately signed with Elmore, confirms that more than one prospective agent had offered him a new car. "Whatever I chose--just go to the lot and pick it out. I'm not a top-ten pick. If this goes on with me, I can imagine what goes on in other cases."

It has gotten bad enough that Falk, for one, prefers to be known not as an agent but as an attorney. "That's what Michael calls me," he says, lightly dropping the biggest first name in his stable. Yet for all of Falk's undisputed loyalty toward his clients, for all of his carefully sculpted self-promotion, he has an image problem. By reputation he is a man whose name is an expletive to NBA front offices, a hard case who would level his own grandmother if she blocked an accelerated payment schedule.

Such sentiments hurt Falk, even as he attributes them to media hype or to the old stereotype of agents as cigar-chomping shysters. "It disappoints me when I'm portrayed as this tough, grizzly individual. I don't think I instill fear in owners like Harold Katz and Jim Thomas--these are all hundred-million-dollar guys. They're not afraid of a young lawyer [Falk is 43] who represents people making $2 million or $3 million a year."

On the other hand, Falk models himself after Marlon Brando's Don Corleone: "If you're powerful, if you have the ultimate clout, you don't have to yell and scream. You could quietly say, 'Harold, I'd like an eight-year deal for $50 million, I'd like an out after the fourth year, I'd like some bonuses.' And the guy would say, 'OK, you're the Godfather, here it is'--and you'd walk out."

In truth, there are a few basketball people who would liken Falk to a less well-dressed John Gotti--a hit man who follows his own self-serving code. When Falk steered free-agent client Xavier McDaniel from the New York Knicks to the Boston Celtics after the 1992 season, a conspiracy theory swirled that the agent was trying to please Jordan and weaken the Knicks, then the leading threat to the Chicago Bulls' budding dynasty.

After McDaniel left the team, Knicks president David Checketts said, "What my dealings with David ultimately prove is that the only rule is that there are no rules. When he has leverage, he will do anything."

That summer of 1992 was a long and hot one for Falk, and the heat didn't break with autumn. It was his first year out on his own after 17 years with ProServ, the most renowned coven of agentry in the world. He wooed only one NBA rookie, Alonzo Mourning. Like Falk clients Patrick Ewing and Dikembe Mutombo, Mourning played at Georgetown for coach John Thompson, the agent's longstanding client and mentor. The Charlotte Hornets drafted Mourning with the second pick, but they weren't exactly treating Falk like the Godfather.

As training camp and exhibition games came and went, the talks deteriorated into Mourning sickness. Falk broke his own rule against negotiating in the media. He eventually received a sixyear, $24 million deal--after the first four games of the regular season--but didn't do much to endear Mourning to the locals.

"My feeling," says Spencer Stolpen, the Hornets president, "was that David was appealing to too many masters. He was trying to impress John Thompson and he was trying to audition for Nike," which had signed Mourning to an independent marketing contract.

"When it comes to negotiating a contract," Stolpen goes on, "David becomes deaf and blind to anything other than what he has said or written. He has great selective memory, and often he becomes bigger than the player. In the Mourning situation, it was David Falk against the world."

Other NBA executives paint a different picture. Jerry Reynolds, former general manager of the Sacramento Kings, observes that teams are less likely to play hardball against "a proven all-star" like Falk, because there are "certain things you know you're not going to get away with, so you don't waste your time trying. With David you get guys signed sooner, with less animosity, and it fits the community better. I make it a point to bow to the East twice a day, just in case David is checking."

Even Charlotte's Stolpen bears no grudge, noting that there are "times when David Falk can be an ally to a general manager." A case in point came during the 1991-1992 season, when Rex Chapman was demoted from starter to sixth man. Falk, who had won a fat new contract for Chapman just months before, had an unhappy client making more than $2 million a year. He knew a trade was likely; why not make it sooner rather than later? He called Stolpen.

"Can I help move him?" Falk asked.

"If you can move him, move him," Stolpen said.

Falk knew that the Washington Bullets needed a shooting guard. "John Nash, the general manager, is a good friend of mine, and the Bullets were down on forward Tommy Hammonds," he relates. "A lot of times young players get stuck in a situation that just doesn't work out. It doesn't mean they're bad players. I have a great relationship with the owner, Abe Pollin--and we made the deal." In February 1992, Chapman was traded straight up for Hammonds and now is thriving as a starting guard with the Bullets.

"More than anything," Falk says, "I look at myself as a creative problem solver. That's what a negotiator is--someone who understands problems and can solve them." In the NBA, those solutions tend to be expensive. All hands--including other agents, whose profession is rife with gleeful character assassinations--agree that Falk is unexcelled in this department. "He's the model, he's flying high," Elmore says, conjuring the image of Air Falk.

Agents are not alchemists. None of them could extract a high-eight-figure contract if the industry were not so robust. Two fundamentals are at work here: the fabulous growth of the NBA, and the success of the league's salary cap, through which the owners guarantee that the players will be paid an aggregate 53 percent of the league's net revenues. While the average NBA salary more than quadrupled over ten years (from $275,000 in 1983 to $1.3 million in 1992), league revenues sextupled over roughly the same period, from $ 160 million to $975 million. In 1980 the value of the Dallas Mavericks' expansion franchise was $12 million; last year a Toronto group ponied up a $125 million entry fee for 1995.

The agents cleverly found a crack in the salary cap rules. They used the annual boost in the cap limit to increase the take for each year's crop of rookies. Then they used the rookie deals to leverage new, improved contracts for veterans. (A team may go over the cap to resign its own players.) The result: 21 of 27 team payrolls exceeded the $14 million cap in the 1992-1993 season, in one case by $11 million.

No one has played this game better than Falk. It may not have taken genius to get a then record $3.25 million per year for a demigod like Jordan in 1988, or a single-year balloon of $18.7 million for Ewing, in effect for 1995. But Falk also reels in lavish first contracts for less incandescent players. In 1990, a banner season, he wrung $12 million over five years for Orlando's Dennis Scott, and a surreal $37.5 million over ten years for Danny Ferry--a deal that put the slugfooted Ferry in a higher salary bracket than Charles Barkley or Hakeem Olajuwon. "We had all the leverage on the Ferry deal," Falk says. Then he adds, without doubt or embarrasment, "Besides, I think Danny Ferry is going to be a terrific player."

Most agents are slot guys. They're afraid to close a deal until the players drafted on either side of their client are inked, so they can safely secure something in the middle. But Falk prides himself on setting the market that others will strive to follow. Once he arrives at a client's value--based in part on his analysis of general market forces, in part on what other Falk clients have signed for--he will open with a number within five percent of where he plans to close: "I don't want to get into a ping-pong match." His players are usually signed promptly, in time for the start of training camp. More often than not, they wind up jumping at least one slot--that is, getting more money than the player drafted in front of them.

Citing a shallow 1993 draft talent pool, many teams presumed that the perennial surge in rookie salaries would flatten out. But Falk never believed it. "It's like asking if the latest model car is always better," he explains. "Not necessarily, but the prices always go up."

In mid-July, a FAME vice president named Mike Higgins closed a six-year deal for $18 million for sixth pick Calbert Cheaney. The first lottery pick to be signed, Cheaney's average annual guarantee was 40 percent higher than Tom Gugliotta's, who'd been chosen sixth in 1992--and slightly more than the figure settled on by 1990 number one pick Derrick Coleman. A few weeks later, Higgins and Falk would collaborate in clinching a six-year, $16.5 million deal for seventh pick Bobby Hurley.

But Falk's masterpiece would be the Shawn Bradley contract. Bradley was a unique case. With only one year of college basketball, followed by a two-year stint at a Mormon mission in Australia, Bradley was a player of whom much was expected but little was known. The skeptics warned that Bradley might prove too flimsy to dominate the sumo-inspired mayhem of NBA inside play.

Falk loved the controversy. Bradley will "revolutionize the game," the agent declared in his Washington office six days before the draft. "There's never been a big man who can run the floor, block shots, score, pass, handle the ball like he can. He's almost like the next-generation Kareem Abdul-Jabbar."

The doubters couldn't faze Falk. They were the same people, he says, who still maintain that the Houston Rockets were right to choose the seven-foot Olajuwon over the midsize Jordan in 1984: "That's why those people are never going to win, because they're too mired in traditional thinking." The joy of representing Shawn Bradley lies in the "chance to stretch the envelope. That's what really turns me on."

Once Philadelphia chose Bradley, Falk trained his full enthusiasm on team owner Harold Katz. "I'm a true believer. I think that's the secret to my success," Falk says. On occasion Falk's zeal has carried him too far, as when he advised Adrian Dantley to exercise an escape clause in his $1.2 million contract with Dallas in 1990. Not long after that, he disappeared from the NBA. But in the Bradley negotiations, Falk's fervor served him well.

Once again, the agent was up to his teeth in leverage. The 76ers had to sign Bradley, and fast, to shore up season ticket sales after a 26-56 season. The salary cap would be no problem, as Katz was eager to jettison seven of his veterans. Still, it took a leap of faith to strike an eight-year deal of $44.2 million--plus incentive bonuses--for a player who even Falk conceded was a longterm project. To top it off, the agent gained Katz' assent for an unprecedented wrinkle, a "floating out," which gives Bradley the option to renegotiate his salary after his fifth, sixth or seventh year in the league.

"The biggest gamble of my life," Katz pronounced after signing the contract on July 28, four weeks after the draft. Not only had Bradley jumped a slot by getting a higher per-year guarantee than Chris Webber (who was hemmed in by the salary cap), but he had surpassed the guaranteed dollars for the previous year's number one, the prodigal Shaquille O'Neal: $5.5 million per year for Bradley, $5.1 million for O'Neal. That had to be especially sweet to Falk, since O'Neal is the man many are anointing to replace Michael Jordan as the NBA's big dog.

•

When Jordan informed Falk that he was retiring last fall, two days before the official press conference, the agent struggled to repress "an immediate selfish reaction," and tried "to be strong and independent. I feel it's a great decision for him. I told him it had been a hell of a ride."

In fact, the ride is far from over. In the year or so preceding Jordan's jolting announcement, he had signed long-term extensions on every major endorsement contract. No company is demanding a rebate. To hear Falk tell it, Jordan didn't really retire--he simply modified his approach, trading his jersey for business attire and his White Sox uniform. Like Arnold Palmer, Jordan could become an ageless elder salesman, no less beloved or telegenic for the fact that he no longer runs the hardcourt.

Still, change brings new contenders for the crown, on and off the court. Leonard Armato, for example, has only four NBA clients. But one of them happens to be Shaquille O'Neal, the 22-year-old force of nature who weighs 300 pounds, very little of it fat. Where Falk is intense, earnest, at times abrasive, Armato is intense, ironic, more smoothly insinuating. He is not the most popular man in agent-land. When Armato was working for L.A. Gear, the company signed a lucrative contract with Dale Brown, Shaquille's coach at Louisiana State. "That was the buy-in, no question," says Don Cronson, a veteran agent out of New York. "It gave him the access no one else had." (To which Armato replies: "Obviously there are jealousies, but I don't let it bother me. It's just part of life in the big leagues.")

Armato will tell you he is neither agent nor attorney but a business manager, Hollywood style. Appropriately enough, he is based in Los Angeles. He obtained a seven-figure annual guarantee for O'Neal from Nike's mortal enemy, Reebok, thereby escalating the war for the $20 billion retail athletic shoe business. And that was but a prelude.

To represent today's superstar, Armato says, an agent has to be "at the highest level of our profession, a marketing person with a worldwide vision for how things are going to evolve."

According to Armato's vision, O'Neal would not bow to various corporate strategies when pushing a product for Reebok or Pepsi or Spalding. Instead, he would be promoting Brand Shaquille, with its own distinct identity--what Armato calls "that Terminator-Bambi thing," an "incredible, powerful force and physicality with a gentleness beneath."

Moreover, there would be synergy among O'Neal's companies, with a tangible point of unity: the Shaq logo, four stylized block letters with a tiny silhouette--the Dunk Man--crashing a ball through a rim. "It's just like the Disney corporation," Armato explains, "when you see those Mickey Mouse ears."

By this prescription, Shaquille would be bigger than Wilt, bigger than Kareem. He would certainly be bigger than the NBA, to which Armato once referred as "a marketing partner on a level with Reebok." He would be as big, in fact, as Donald Duck--even big enough to break the "big man's barrier," a marketing axiom that Joe Consumer can't identify with Jurassic-size pitchmen.

O'Neal, Armato continues, tossing adjectives from half court, is "really a true, multimedia entertainment superstar. He is becoming an icon." In just his second year in the league, the young center has already released his own rap album (Shaq Diesel, on Jive Records) and appeared in a feature film (Blue Chips, starring Nick Nolte). O'Neal's music, in particular, lends him entrée into hip-hop culture that can't possibly be matched by the 31-year-old Jordan--a wedge, Reebok hopes, into the hearts and wallets of inner-city youth, who set the vogue for everyone else. Coming this summer to a suburban shopping mall near you: a Shaq line of Reebok hip-hop wear featuring oversized leather vests and baggy shorts.

All things considered, these are heady times indeed for the 41-year-old Armato. O'Neal's ascension--accelerated by Jordan's retirement--makes Armato the most conspicuous man in the business. "David Falk has as many contacts and is as astute as anyone," says Reebok's Carmody, "but Shaq's the man, so Leonard has the most juice."

Falk isn't quite squeezed dry, however. He's seen other players pushed forward as the Air Apparent--most notably David Robinson, San Antonio's brainy center--only to wither in the glare of the floodlights. He points out that the firstgeneration Shaq shoe, plagued by an unfashionable white sole and a $135 price tag, sold poorly. More to the point, he contends that Jordan remains the man, as yet irreplaceable by anyone on the NBA's horizon.

"There's no one who's going to fill Michael's shoes. I think his legend will grow," Falk says. Nike is reportedly preparing new lines of Jordan golfwear and casual clothing, and may sell its star harder in places like Japan, where there seem to be no hero saturation points. Nike is also about to reissue a complete line of collectible Air Jordan models, dating back to that first garish sneaker from 1985.

And there is more; with Falk, there is always something more. Sometime soon, he promises, Jordan will have "something much bigger than Shaquille's music thing." The coming breakthrough, says Falk, "will blow your socks off." The once and future king of NBA agents is now wound into full pitchman throttle. "You ain't seen nothing yet."

"The basketball agents talk like CPAs on steroids, yammering about income streams and current value."

"By reputation, Falk would level his own grandmother if she blocked an accelerated payment schedule."