Talent Agency Startup Financial Model

Description
If you are looking to start a talent agency and understand some general unit economics for how this business works, this template is a perfect place to start.

In general, there are two primary revenue streams for such an agency, and this could be a sports agency or any kind of professional agency. The income streams are 1) Commissions on the salary / contract value of the given professional and 2) Commissions on any endorsement deals the agency attains for the professional.

There are all sorts of ways these partnerships are created, and this model was designed to be flexible enough to model just about any kind of financial structure. The general working relationship is that the agency provides services in relation to negotiation as well as brokering deals between teams / organizations and the professional.

The commission earned on endorsements are usually higher than the commissions earned on salaries. Sometimes there are imposed caps, such as in many professional sports. For example, the NFL states that a given sports agent is not allowed to earn more than 3% of an athletes salary.

Generally, from what I found, agencies usually charge between 3-10% of salaries and 10%-20% of endorsement deals. Do your own research here as this is essential to the financial plan and strategy of starting an agency business. This will also depend on the type of individuals the agency is representing.

This model makes the following configurable:
 - Up to three athlete / professional types
 - Number of athletes / professionals signed on to the agency per month
 - The average salaries of each type
 - The average annual value of endorsement deals by type
 - The average commission rate for salaries over time
 - The average commission rate for endorsements over time
 - Starting salaries and commission rates can be adjusted over the 10 year period

Dynamic Performance Schedule

This model has a unique schedule that lets the user define the average curve for a given professionals' earnings over their career (separate schedules for all three types and for salaries vs. endorsements). This gives the user the flexibility to define a starting earnings expectation, and a percentage shift from base over 120 months.

Variable Costs

The other dynamic part of this financial model template is the ability to define an expected cost per professional per month. This runs against the active athlete count / professional count by type and you can define separate values based on active salary contracts vs. active endorsement contracts.

It is common for professionals to have a career that ends, but the endorsements may keep coming after their career is over. The model can account for this.

Fixed Costs and Startup Costs

There is a separate schedule for fixed costs where the user can define the start month and monthly cost in each of the 10 years for over 90 unique line items if needed. This is to account for on-going operating costs such as office space rent, legal fees, accounting fees, general managers, and everything that goes into general sales, marketing, and operations.

The model makes it easy to stop the forecast on any month over a 120 month period. Final output reports include an integrated 3 statement model (Income Statement, Balance Sheet, and Cash Flow Statement) as well as visualizations that make the overall financial forecast easier to understand.

There is also an option to fund some of the startup costs / operational burn with debt funding, investor funding, and/or owner funding.

Other output reports include a DCF Analysis for the project as well as individually for inside and outside investors as well as their IRR, Equity Multiple, ROI, and IRR. In order for a proper valuation to be done, there is an option to include an exit value and if so, the resulting 12-month trailing EBITDA from the exit month will determine the exit value.

A tax rate can also be entered if this forecast is to include after-tax cash flow.

This template is also included in two bundles:
- All Models Bundle: https://www.eloquens.com/tool/P8Y4TX4v/finance/financial-forecasting-models/financial-models-120-useful-and-usable-logic
- Industry-Specific: https://www.eloquens.com/tool/lrNGt2jL/strategy/business-plans/business-sector-bundle-35-bottom-up-financial-models