Sports/Talent Agency Model?
I am supposed to model a sports agency. Any idea on good place to start?
I am supposed to model a sports agency. Any idea on good place to start?
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It depends on how the agency is compensated (upfront per contract/movie vs annual %, etc), but I'd think of it like an asset management firm. You need to model the existing "AUM" (athletes under contract), come up with a good proxy for your fees on each, and model in some realistic rate of attrition and growth plus figure out how much "windfall" income is due to new contracts etc.
Revenues may be "chunky" if you only get paid each time your star makes a movie or signs their free agent contract, but I think the general concept should work. If the number of clients is small enough you might be able to get granular and model some specific events, too.
When I've modeled any sort of business like that (relatively small base of high-value clients/customers and very relationship dependent), I usually make (growth%-attrition%)
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