David Falk, the Washington sports agent who once terrorized the NBA's owners on behalf of his player-clients, is stepping up to an even bigger league.
The man who helped Michael Jordan become a marketing icon has been named to head up the newly consolidated SFX Sports Group, a collection of sports talent agencies and marketing shops stitched together by SFX Entertainment Inc., the New York-based entertainment company.
Until last year Falk, 49, headed his own agency, Falk Associates Management Enterprises (FAME), which managed Jordan, Patrick Ewing and newer National Basketball Association stars, such as Stephon Marbury of the New Jersey Nets. FAME was one of 14 privately held sports marketing and management firms that SFX acquired in a $1.5 billion buying binge that began last year.
Falk's ascension within the SFX group carries one executive-suite subplot. Among the other firms acquired last year by SFX was ProServ Inc. of Arlington, where Falk began his career in 1974 and left in 1991 after a bitter falling out with Donald Dell, the firm's founder and Falk's mentor. Now, Falk will be in charge of ProServ.
The SFX sports group, which is among the largest players in the rapidly consolidating sports marketing business over the past year, will do many of the same things that Falk and FAME did -- negotiating player contracts, working out endorsement and licensing deals, producing athletic events for television and arena tours -- but potentially on a much bigger scale.
"This isn't something new," Falk said last week. "It's an evolution." He added, "Putting all these companies together is sort of like Crosby, Stills, Nash and Young getting together. You have four great talents. If you can get them to harmonize and sublimate their egos, you'll create great music for a long time to come."
SFX represents more than 100 athletes, coaches and sportscasters in basketball, baseball, golf, tennis and soccer, including New York Yankees pitcher Roger Clemens, Boston Red Sox shortstop Nomar Garciaparra, Los Angeles Lakers forward Kobe Bryant and ESPN announcer Chris Berman.
SFX's sports operations will parallel -- and in some cases work with -- the company's entertainment division, which promotes concerts, Broadway shows and other events. Before its buying spree in the sports-management area, SFX was an aggressive acquirer of concert-promotion firms and concert venues. Its shopping list included Cellar Door Productions of Washington; it also manages the Nissan Pavilion in Prince William County and the Merriweather Post Pavilion in Columbia.
Although the negotiating power of agents such as Falk has dimmed somewhat with the advent of salary caps in the National Football League and salary limits in the NBA, Falk says he sees expanding opportunities for SFX's clients in cable TV and the Internet. One new SFX venture is the World Wide Web site eSuperstars.com, which debuts this week and will sell trips to the Super Bowl and "fantasy" packages, such as a day of golf with an athlete represented by SFX.
Falk's colleague Bill Allard, the former ProServ president who now is president of SFX's sports group, said the public's focus on the brightest names in sports makes it possible -- and competitively essential -- to try to move the biggest names into new areas of media and entertainment.
"Starpower is what works here. The elite athletes will be the drivers of this businesses," Allard said. That means bigger deals for the biggest celebrities, and bigger deals require larger, diversified promotional organizations, he said.
The changes have remapped the local sports representation business. In addition to FAME and ProServ, two other major Washington area firms, Advantage International and the D&S Group of Washington, also have been acquired or formed alliances with larger companies in the past two years.
Although its acquisitions have made SFX a force in the sports and entertainment fields, with $1.4 billion in revenue over the past year, it does not have the field to itself.
Two months ago, Assante Corp. of Canada paid a reported $120 million in cash and stock to acquire Steinberg, Moorad & Dunn, an SFX competitor headed by California sports super-agent Leigh Steinberg, whose clients include NFL stars Steve Young, Troy Aikman, Jake Plummer and Drew Bledsoe.
Steinberg's goal is identical to Falk's: to export the biggest sports names into new fields of entertainment. His new backer, Assante, administers more than $20 billion in clients' assets.
"The pressure points are to diversify and broaden the types of services you can offer your clients," said Bill Strickland, chief executive of Strickland & Ashe, another Washington-based sports agency. Strickland's company, for example, has formed links with five other firms in the past year, including the William Morris Agency, to expand its offerings.
SFX's overall revenue rose 77 percent, to $1.21 billion, during the nine months ended Sept. 30; results for the sports group aren't broken out separately. The company's net loss fell 53 percent, to $15.1 million, which reflects in part its aggressive buying activity.