Commission, Retainer or Scorecard: How Racing Agents Get Paid

"How do agents get paid?" comes up at every Sponsorship Summit I run, usually within the first ten minutes. The honest answer is that there's no single model. Two of the most experienced people on my panels, an athlete agent and a brand agency founder, take nearly opposite positions on retainers. That's useful for a racer. Once you understand why each one works the way they do, you'll know what to ask before you sign anything.

Commission comes out of sponsorship money, not your purse

Bob Walker of Connexions Sports & Entertainment, who represents the Deegan family, laid out the basics on the agents and agencies panel at the Motocross Sponsorship Summit. "If we're talking as an individual representing a driver or a rider, a racer, for example, it's percentage based off the monies that we bring in," Walker said. "We typically don't touch their purse money; it's their compensation. It could be value in kind as well as cash."

Brands and properties pay differently. "On the brand side it's typically retainer based," he said. "If a property, for example, retains us as an agency to sell sponsorships on their behalf, that's usually a retainer plus." ▶ Watch Bob Walker explain this

Two details are easy to miss. First, your race winnings stay yours. Second, product and services count as well as cash, so a deal worth a lot in free parts can still earn your agent a commission.

Some agents won't take a retainer at all

When a racer at another summit asked whether newer athletes should expect to pay retainers, Walker said the only place he regularly sees them is in NASCAR. "The representation over there charges retainers plus a percent of the deals they put together," he said. Other forms of motorsport, in his experience, have been more percentage based.

He also explained why his firm works on commission only. "I just feel like it's almost unfair to be asking people for money to go sell for them. Either you're good or you're not, right? And that's why you get your percentage, and we take a bigger percentage because we believe in our ability," Walker said. "I'd rather sink or swim on my own success. I'm betting on myself. If you pay me a retainer and I fail miserably, I feel like I took money from you and I didn't produce." ▶ See Walker's full answer

Notice the trade-off. No retainer means you pay nothing up front, but the percentage is bigger when a deal lands. Walker also warned that every arrangement is different. "Everything's negotiable. No two deals are the same."

Others say the retainer is what gets the work done

Eric Morley, founder of the Blue C agency, sees it from the other side. At the Motorsports Sponsorship Summit, he turned the question back on the racer. "The driver doesn't want to pay anything for the biggest results," Morley said. "They might come across someone, they'll say, 'Yeah, you know what, I will do it for the 15, 20%,' but the true reality is nothing is going to get done. Paying someone really separates the men from the boys." ▶ Watch Eric Morley on this

There's no contradiction here. Walker can work on commission because he chooses clients who already have something to sell. He told another audience his firm was full and not taking new clients. An agent who takes on an unproven racer for commission alone has every reason to put that racer at the bottom of the pile. Before you choose a model, ask which kind of client you are.

One agent, exclusive, so the brand isn't confused

Walker is also firm that representation should be exclusive. "We're exclusive to everyone that we work with. We don't do non-exclusive," he said. "Having a bunch of different guys out there looking for deals for you guys or girls, someone's going to get egg on their face." Picture two agents pitching the same driver to the same marketing manager in the same week. "It's confusing to the brand. You and I don't look good, the athlete doesn't look good." ▶ Watch the clip

If you already have deals in place, expect some sorting out. Walker said that when an athlete arrives from another agent, or after years of doing their own deals, the new agent inherits "pre-existing contracts and pre-existing deals that you've gotta unravel because the other people are getting paid on it." Put it in writing at the start: which existing deals the new agent earns on, and which they don't.

If you pay a retainer, put a scorecard on it

Morley's protection for racers who pay a retainer starts before the money moves. "Before they pay that retainer, ask to speak to three other of the people that they represent," he said, "because there's agents out there that... can't produce. They might say they can produce, but they can't produce."

Then set targets for each stage of the season. "Let's agree on KPIs, key performance indicators," Morley said, with checkpoints at three, six, nine and twelve months. "If you don't have a scorecard, it's kind of like playing a stick-and-ball game with no score." He also told racers to budget for it honestly: work out what you can afford each month, multiply it by 12, then build the scorecard around that number. ▶ See Morley's full answer

Expect to pay more for a better agent. Morley pointed out that agents who bring stronger results usually cost more.

Watch how the deals themselves are structured

How an agent gets paid also depends on how the sponsorship is paid. Walker said social media deals now come in many forms. "We've had X posts per month over a set amount of months, like six months, 24 posts; six months, 12 posts, and the value changes on the amount of posts," he said.

A good agent also turns down some easy money. "I don't want to burn a category," Walker said. If he's chasing a big sponsor in a category, he won't sign a small per-post deal with one of its competitors, because "as soon as we do that it takes us out of the market for their competitors." ▶ Watch Bob Walker on this

Those are the decisions you are paying for: not just finding money, but knowing which money to turn down.

The takeaway

• Ask how they're paid before anything else. Commission only, retainer plus commission, or retainer only. Get the percentages and the term in writing.
• Confirm what counts. Purse money is usually excluded. Product and other non-cash support usually isn't.
• Insist on exclusivity, and list existing deals. One agent pitches you. Spell out which current sponsors they do or don't earn on.
• If you pay a retainer, call three of their clients and agree on targets at three, six, nine and twelve months.
• Budget for representation the way you budget for tires. Monthly cost times 12, measured against results.