I recently interviewed Klutch Sports Founder and CEO Rich Paul on my podcast, Thirty Minute Mentors. Here is a transcript of our interview:
Adam: Our guest today represents many of the best players in basketball. Rich Paul is the founder and CEO of Clutch Sports Group, where he represents LeBron James, Anthony Davis, De’Aaron Fox, Tyrese Maxey, and many other players who you probably either root for or root against. Rich is featured in a new masterclass on winning deals and negotiations. Rich, thank you for joining us.
Rich: Thank you. Thanks for having me.
Adam: You grew up on the east side of Cleveland, and you were doing deals from a very early age. You bought and sold throwback jerseys. And one of your customers was a high school student named LeBron James. Can you take listeners back to your early days? What early experiences and lessons shaped your worldview and shaped the trajectory of your success?
Rich: I was very young. in the deal-making environment, starting out with working at my dad’s store, which I talk about a lot in my memoir, Lucky Me, that led me to understand what customer service actually was and understand marketing, understand branding, and those types of things. And then as I continued to evolve and I had such a profound aspiration for anything that had to do with sport, any sport for that matter, one day led me along an airport and there was a young man there with a group of friends that I was introduced to. And as we encountered each other, that led to going on to be a long last relationship with who was then, but not as worldly known as he is today, LeBron James. Some of the things I learned and some of the most important things I learned at a very young age was just the importance of treating people how you want to be treated. Very simple. The importance of having great energy and someone speaking to you, and you’re speaking back. And that ultimately is what led me here, as it pertains to the deal making of it all, the customer service of it all. My dad always taught me that the customer was always right. There was professionalism and an approach of making sure that the customer was always happy. And then when you talk about from a deal perspective, my environment was a lot of deal making. You had to be sharp because in an environment where there’s very little accessible and attainable, and reachable, it was almost like the sharpest knife wins. And so for me, I just continued to try to educate myself and be as observant as I possibly could be. to have an understanding of not just what was going on, but who was important, why they were important, what subject matter was there, and how to approach things. And so my community really shaped me to become that person, and gave me that foundation. And as I went on through life, I just took different bits and pieces and added it to myself.
Adam: Rich, I love it, and you shared so many great insights that I’d love to dive into over the course of this conversation. When you go back to that experience selling jerseys, and you connect with LeBron James, he’s the best player in high school at the time, generational player, not the same household name as he is today, but he was well known by anyone who followed basketball. I would imagine that many people at that moment in time were trying to cultivate relationships with LeBron James, yet LeBron brought you into his inner circle. How are you able to develop that relationship and ultimately build trust with LeBron, who I would imagine not only today, but at that moment in his life was someone who was on guard and wary given the number of people who are trying to cultivate relationships with him.
Rich: Yeah, well, it was very early on. You got to remember, the internet wasn’t as mature as it is today. And so, yes, he was known in the Ohio environment of high school athletes. He had yet to be on the cover of Sports Illustrated. And then I imagine for those who follow basketball religiously, like I did, you knew him. Outside of that, maybe not. But what really led to us and our relationship, and how I was able to cultivate a relationship was he had an interest in something and I was extremely educated on that problem. And he could see my passion and my care to educate him. And taking the time out, giving him a number of different players and types and what went into it, and all those types of things, and then allowing him to know exactly where I go to get them. I told him where to go as we were both going to Atlanta. And so I think it was just, you know, anytime you deal with people, you get the sense right away of what type of person they may or may not be. And I think right away he got the sense of, oh, this is not a guy that is looking to gain anything from me. This is a guy that is very passionate about what he does, very knowledgeable about what he does. Seems to be a pretty cool guy, I imagine. And so that softened the entry level of dialogue, I may say. And then over time, as you spend more time with someone, the layers spill back more and more. And that’s exactly what our relationship was.
Adam: And Rick, a big lesson, which is so important, it’s not about trying to cultivate a relationship with someone as much as it is trying to become a person who others want to cultivate a relationship with. Maybe not every person in America wanted to be around him, but people wanted to be around him. But you were able to become a person, even at a very early age, that even someone like LeBron looked at and said, hey, I want this guy in my life. Why? First and foremost, you became an expert, an expert on a topic that he was interested in. And then you were able to develop trust by being authentic, being yourself. At the end of the day, for relationships to ultimately form and for relationships to sustain, they have to be authentic relationships.
Rich: Have to be. They have to be authentic relationships, and you want it to be that. I think many times as you are encountering a relationship, it’s not about what you can get from it. It’s really about what you can give to it, being that added value. I always was someone that wanted to be of added value. And I think there’s a world where you have to be okay understanding the role that’s in front of you today, while also being knowledgeable of what it could become tomorrow and doing everything that you can to play your part. I think, especially for the young listeners out there who are or have the chance to be around any professional athlete or any talent for that matter, the one thing I always knew was I’m not the talent. And whatever my decision-making accountability or responsibility was within the circle of it all, whether it was 0.5% or 50% of a responsibility, I always said to myself, whatever it is, I want to always be able to say I’m doing what’s right, number one, and what’s best for him, number two. Not what’s best for me, what’s best for him. Today, I’ve become somewhat of a talent for myself, and I live by that same thing for myself. Understanding Masterclass and the brand that Masterclass is and the brand equity, the taste level, when you talk about how the perception, what level of perception it has, that made sense for me. And I was honored and really excited to do Masterclass. And so those decision-making skills, it never leaves you. It follows you all the way throughout. was someone who was the last person to the table, someone who was not given a role right away, someone who was told, actually, I don’t have a role for you. And at that point, mentally, if you were hoping, wishing, banking on something, then that could ultimately be the biggest letdown. That was never me. I wasn’t doing any of those things. I was embracing a moment, an opportunity, whatever that opportunity was, how big or how little, while also understanding that I am a value add. Sometimes being a value add is just being a great listener. There’s a true value in being a great listener. Sometimes being a value add is being a great note taker. And then going back and having a private conversation and saying, okay, well, these things were said. This is what I think has value. This is what I think doesn’t have value. I just wanted you to know this. I’m going to step out of the room now so you guys can make whatever decision you want to make. There’s a time and a place. Sometimes you are allowed in the room. Sometimes you’re not allowed in the room. And then there’s worlds where you do such a great job that you may have started on the outside of that room. And then before you know it, you look up and you’re a decision maker at the table in that room. And I think for young listeners or all listeners, you have to give yourself time and patience, and understand the different roles that you could play and the journey. It’s been a long journey for me. I didn’t start representing athletes. for a long time, didn’t start representing LeBron until his ninth season in the NBA. Then making a decision to go out and build my own business, that’s a risk. But I had to believe in myself and then making decisions not only to go out and build my own business, but to do it in a way in which I didn’t lose my integrity. I didn’t substitute my professionalism for any amount of money or things like that. It positions a culture and foundational pillars that you can really have consistency, which ultimately creates your culture. And that leads to success.
Adam: Rich, you shared a lot of great advice. If you’re in a position where you’re a trusted advisor, so much of your success comes down to understanding your role today, recognizing that your role can evolve over time, but what is your role today and how can you be the very best that you can possibly be at it? And some of the tips that you shared, being a very active listener, sometimes there’s value in taking the best notes and delivering those notes and translating what was said from one person to another person. It comes down to adding value.
Rich: Absolutely. My role today in leadership as an executive, as the CEO of Clutch Sports Group, as a partner, and a board member of UTA has changed. My role today is now investing back in the young people that I hired or staff member or department head has hired to make sure that one, we’re maintaining our culture, but two, they’re actually learning. And today I’m in rooms, I’m in meetings to where sometimes I’m just supporting and I’m okay with just being supported and allowing people to grow and seeing them take the proper steps is a beautiful thing. Today, I don’t have to be in every conversation all the time and or make every decision. And by the way, when you’re building a business and you’re scaling the business, it took a while for me to be number one, okay with that. And then number two, to actually let go of some of the rope. Because unlike other companies, you can acquire a business, that’s one thing. But when you build a business, that’s a totally different thing. That’s a mom giving birth to a child and raising that child. And when that child goes off to college or to the armed forces or to study abroad or whatever the case may be, that’s very tough for them to let go. It’s very tough for them to let go just for them to start making their own decisions. It’s the same thing with the business especially when you forge your blood, sweat, and tears at all, to differentiate yourself within a marketplace that is very competitive, that is very challenging, that is forever evolving and changing, and in a lot of cases, that is very similar. So we had to do all of that while fighting the battle of Bunker Hill. You know, we’re climbing that mountain, while everybody is already on top of that mountain, throwing objects and things like that to push you back down that mountain. That’s who we were. We were the new kid on the block and the kid that no one actually really believed in. Nobody can really say, oh, we knew you would be here. They don’t. The closest people to me didn’t know we would be in this position that we are in today. And that’s OK. We don’t take that personally. But having a true belief in yourself, having a true understanding of partnership and true understanding of team, never bending on things that are foundational attributes to not only just your success, because success is one thing, but your culture, that matters. Because once you lose that, once you trade that in for financial gain and things like that, that’s the beginning of the end of the business, in my opinion. Now, some people do it where they drain the business to the point where they don’t need it anymore. But again, we built it. So in building something, it’s going to forever be my baby and I’m going to forever care about it. And we are so much bigger today than we were, you know, September of 2012. It’s just a totally different business for sure. But if you walk in our offices, if you see how we treat clients, if you see the things that we care about, if you see the things that annoy us, it’s the smallest, simplest things that the same things that it was, that it seemed like it was the biggest thing when we had four clients and no revenue.
Adam: Not only has your agency changed, your agency evolved, but the role of being an agent has evolved dramatically. If you’re a max player, you know what you’re getting paid. It’s a lot more about dictating where players play and collaborating with front offices. Can you talk about the way the role has changed and what are the keys to excelling at it?
Rich: The beautiful thing for you, Adam, is this will be an extension of Masterclass. There is a ton to negotiate for max contracts, believe it or not, a ton. They’re actually harder to do than minimum contracts. I think when people think about the number, but you can be a max-contracted player and it’s announced as a max contract. But within the contractual language, it’s not so max. Explain that, Rich. Well, we’ve seen guys roll out max deals. The final year of that deal may be a team option. Final year of that deal may be non-guaranteed. There’s a lot of different scenarios in that. But in agreement with what you’re saying, in addition to that, yes. The max contracts are becoming harder and harder to get. Based on four, it’s becoming harder and harder to do multiple max deals based upon where the business is at, the CBA, which is forever evolving, the fact that ownership may not want to pay the tax, or pay deep into a tax. Look at it. Indiana Pacers in the finals, this is the first year going into the summer that they are willing and wanting to pay the tax. Think about that. Indiana Patients is not an expansion team. They’ve been around for a long time. But this is the first year they’re willing and wanting to pay the tax. And so as an agent, having an understanding of all of these different dynamics, we at Klutch Sports Group help a player. We are big on education. We’re huge on development. We’re not afraid to share information because we don’t need to try to fictitiously create value. We have value from the moment you decide to go with us. There’s no question about it. And we’re not playing the draft game. We’re not playing the max contract game. We’re in the business of careers. And so, yes, you’re absolutely right. How an agent looks today, how they are perceived today. I like to use the word representation because you say the word agent, it’s almost like you sell insurance and someone gets an insurance policy and they don’t call you back unless something happens. We talk to clients and families every day. Families are involved more now than ever. When I first got into business, that was not the case. Today, that is the case. And you have to be positioned enough to where yeah, you want to be respectful, you want to be cordial, you want to be informative and things of that nature, but you also got a job to do. And there’s a balance between all those other things and helping them understand that you have a job to do and you’re capable of doing it, which is why you chose it.
Adam: Rich, one of the things that you shared is that as an agent, your job is to balance the competing interests of the different stakeholders who are in your orbit. You have your client, you have your client’s families, you have the front office that you’re working with, and you do a deal with the front office. You’re doing the deal not only with that deal in mind, but with future deals in mind. So you have all these competing people, competing interests, competing priorities. What are the keys to balancing those?
Rich: Being honest, being very matter of fact, educating everyone involved. So therefore, when there’s conversations being had that you’re not in the room, everyone is educated so in case someone is in the room misinformation they’re able to identify that person right away because that’s what happens a lot in our industry most guys are either lying to players and families and a lot of times people are bringing in misinformation to try to gain either an access point or position and things like that and that’s a manipulation within the circle of temp. That’s where most things really go wrong. And so the way I approach things, honesty, honesty, honesty.
Adam: What is the most complex deal that you’ve ever worked on, and what did you learn from it?
Rich: I would probably say Tristan Thompson’s negotiation, either Eric Bledsoe or Tristan Thompson’s negotiation. And what I learned from it was you work when you negotiate. I think people look at stats, people look at moments, game winners and all those things. Yeah, those things are great, but those were two guys, especially in Tristan’s case, a team that just left the finals. Going back, he and I had a super, super, super close relationship and we had that trust within and he got paid an amount of money that nobody ever thought he was worth. There’s been several though. I mean, look, I can say, Ben Simmons shoe deal. We don’t represent Ben Simmons today, but that was very tough. I can say Darius Garland’s pre-draft process where he only played four games in college because he had a knee injury and for him to still go top five and having to balance all those different things and at the same time keep him and his family mentally tough. One of the toughest negotiations has been myself as a father and as someone who leads a business because You have to find the importance at all and can’t be all work all the time, which is tough when you represent people. Your life is basically their life. So how do you find the balance within that? I think just to sell off ADOPT, which was again, started a company in 2021. It’s built partners, David Creech and Joshua Moore to be able to build a business, sell a business in four years to a company like Publius, which is number one in the space. Those are all tough. Very, very, very tough things. Trying to build an athletics activewear, sportswear business with New Balance and Fletcher Athletics and really learning, having a partner in New Balance and the patience that it takes to get there. in a space like activewear, sportswear today. All those things are tough negotiations. The toughest negotiation is with my office in terms of how many hours in a day I have because some days I don’t even eat lunch. And I have to tell my assistant, say, wait a minute, you don’t even have a block on here for me to eat. What’s going on here? But that’s part of it. I love our industry so much. I love working with the families. I love the players. But there’s a part of me that knows as much as I helped, I’ve also heard it because the perception of it being and looking so fun and so easy to do. It’s like that picture where you see the ice sticking up out of the ocean, you don’t see the bottom half of that glacier or the tree and don’t see the roots every day, every hour, every minute, I have to be on and I have to be accessible and reachable and open-minded and all those things just as leadership. And then you have to be able to identify from a player perspective, I have to be able to see a guy, understand where he is today, where he needs to get to tomorrow, and then strategize and basically create how that actually happens through trainers, through development people, through family members, and all those different things. And I’ll be honest; this is a very thankless job. It is. Nobody cares to thank you about anything. Do a $200 million contract today, tomorrow is, okay, what’s next? It’s like, oh, wait a minute, but you know that going in, I know that going in and that’s okay.
Adam: As you reflect on the deals that you were able to close, what are the lessons that you take away from those experiences on the topics of negotiations and dealmaking?
Rich: You have to really stop looking at the fiscal part of the deal, the monetary part of the people look right to the finish line. But you have to identify what’s valuable, the differentiators within for your client. You have to identify the intangibles that they bring to the table that you know this situation can’t be without. You have to also try to identify and understand, okay, the monetary part is one thing, but what is your true partnership like? In this case, we’re dealing with players, the organization, the ownership group, the relationship that you’ve had. And sometimes, yeah, you want to get all you can, but sometimes it’s okay to leave a little bit on the table because we may do a five-year deal and never even get to year five. Based upon our relationship and based upon the tone, based upon the dialogue and the trust that’s built within, you don’t always have to get it all the time. So then there’s in some cases where, you know what? You should get it all because it isn’t even your work because you can’t charge on other things. In a situation like the NBA, it’s a salary cap. So you have somebody in their prime at the level of, you know, a lot of the guys that I represent, for some of those guys, I wish I could charge for the butter on the popcorn, the concession stand. I wish I could get a piece of parking. I wish I could get a piece of the TV deal because they’re the ones driving the ratings. I wish I could get a piece of that sponsorship deal or that media rights deal that that brand just paid for 20 years for because this is the guy putting the butts in seats. And so it’s all fluid. And I understand that. And there’s going to be times where people don’t like your approach. But as long as you’ve done it in a respectful way, they’ve done business at a high level. They’ll get old. They really will. And I know that talent will always have options. They just will.
Adam: You lead one of the most successful agencies in basketball. You’re around. The best leaders in the game, you’ve been mentored by a lot of great leaders. What, in your experience, are the key characteristics of the very best leaders and what can anyone do to become a better leader?
Rich: I think you have to know yourself, number one, but then also, I think the very best leaders, from what I’ve experienced, are the ones that invest in others. I’ve seen that and they invest in others while not jeopardizing what they built. And they stand firm on that. And I’ve seen a lot of great leaders. I’ve been blessed. You know, my father was a great leader himself. They have this knack for putting out fires. They have this knack for really giving people confidence. They have this knack for taking someone that may have been down on themselves or didn’t think they had that much in them. turn it all the way around and really get the best out of that person. They’re like great coaches. They really are. Identify who works with who and what works with what, and they’re able to really impulsively make changes. It’s almost like a Porsche when you’re able to change direction really fast, stop, go, accelerate, boom. It’s just so many different dynamics that they have within themselves. And then foresight, vision. You can have all the money in the world, but if you don’t have any vision, what is that? Or what is it actually worth? I’ve been observant. I’ve been blessed to be around some really, really, really great people. And no matter what, you always need people to block and tackle. No matter how successful you are, no one does it alone. And I’ve had a great offensive line. Believe it or not, even though I know I’m always out there in the forefront, I have a great team that does great work, which ultimately makes me look great and makes us look great.
Adam: Great leaders develop great leaders. Great leaders genuinely care about people, care about the people around them, care about helping people who they lead, who they influence, who they impact, become better, become their best selves. And I love the example you gave. If you’re a quarterback, you’re not going to be successful without a great offensive line, and you need a good backup quarterback because you’re not going to be on the field the whole time. If you’re a leader in any business, you need great people around you. You need to be able to build great teams. And a big part of it is developing people who can step up and help you get to that place.
Rich: You absolutely do. You need people to help you, and we’ve added great people, but we also have grown great people internally. And I think the way I think about it today, I’d much rather grow someone internally because they don’t have to come in and guess what the culture is, how important the culture is. So I constantly think of ways to get better. Just like any athlete, we’re trying to come back next year and be better.
Adam: You’ve been in LeBron James’ inner circle for more than two decades. What is the best lesson that you’ve learned from your time spent with LeBron James?
Rich: The one thing that I’ve learned from him is he’s the ultimate professional. Never late, never take shortcuts. He’s not trying to not pay for your expertise. He values your expertise even though he’s the best player ever and the leading point getter, and MVP, and finals MVP, and champion, and all those different things. He’s never once tried to undercut me or any of our inner circle decision makers in no capacity. Whether it was making a decision, whether it was paying for service, anything, never. And he’s like that. And the fortunate thing is we have several guys like that and I’m appreciative of them all. I can’t be more appreciative for the opportunity that I was awarded 20-plus years ago with LeBron. And I’m extremely appreciative for the opportunities that I’ve been awarded. by all the other clients that we represent because they’re all are just as important as anyone else and they don’t have to choose us to represent them and so it’s been great and we appreciate them and their families and so we’ll just continue to move forward as we’ve done and be ourselves and continue to grow.
Adam: You’ve enjoyed tremendous success over the course of your career. What has been the biggest failure that you’ve experienced, and what did you learn from it?
Rich: I would say, to me, a mistake is an experience. You learn from it. A repeated mistake is a failure. And so I can’t sit here and say there’s been a ton of failures. I think there’s been a ton of mistakes that we’ve had to correct and get better at. And so you can never do business with your heart. In this business, sometimes you just spend so much time where every now and then you’re given a wake-up call that people don’t really care as much as you do. So I think the mistake would be going to sleep with both eyes closed. I don’t think that’s a possibility. Patience always works. Patience is a virtue. That’s clear. And you gain such a big appetite as you become more and more successful. But sometimes it’s not about more food. Sometimes it’s about just a better diet. And so in business, I think that’s one thing that I would definitely learn from. And I’ve made some of those mistakes. And then having self-doubt. No matter what, I can’t have any self-doubt. People don’t realize. My first draft class, I was fired before the draft and after the draft. And if I have self-doubt and I let that be of detriment to me, I wouldn’t be where I’m at today. I’m so appreciative of that time and that moment because continuing on made me realize in a very short time that I belong.
Adam: Rich, thank you for all the great advice and thank you for being a part of Thirty Minute Mentors.
Rich: Thank you. This was a great interview, man. Appreciate your time and look forward to the next time. Thank you.
