Show David Pepe the Money
He practically grew up at Yankee Stadium. Now he makes his living negotiating big-league contracts
Published in 2006 Indiana Super Lawyers magazine
on February 14, 2006
Updated on October 5, 2016
As David Pepe enters the Wilentz, Goldman & Spitzer conference room, a mid-October rain falls outside, rendering the day gray and autumnal. The sure sign another baseball season will soon be in the record books. Yet while professional baseball may nearly be done for the year, Pepe’s busy season is just beginning.
“It’s negotiation time for our free agents,” says the dark-haired and goateed 41-year-old attorney and sports agent. Pepe is the co-founder of Pro Agents Inc., a subsidiary of Wilentz, Goldman & Spitzer. He handles the careers of 25 athletes.
“I just finished a deal two days ago for Dave Williams, a starting pitcher with the Pittsburgh Pirates [who was subsequently traded to the Cincinnati Reds]. It was his first year of arbitration eligibility and he wanted to get his contract done early rather than wait.”
Williams is a 6-foot-3-inch lefty. He led the team in wins last year, and his earned-run average was a respectable 4.41. He also threw a complete game shutout and took a one-hitter seven innings. For his efforts he was rewarded with a Pepe negotiated one-year deal worth $1.4 million plus incentives, according to Cot’s Baseball Contracts.
“Joe Nathan,” Pepe says of another of his major league clients, “signed a two-year deal last year with the Twins, so he’s doing OK.” Better than OK, actually. Pepe landed a $10 million-a-year deal over two years for the fireball-throwing closer.
But Pepe doesn’t spend all of his time negotiating multimillion-dollar deals with general managers in the Show. He also keeps an eye on the future. “We have a couple of minor league free-agent players to get signed for next year,” he says of his to-do list for the off season. His busy season starts Nov. 8, when teams must tender contracts to the players they have under limited control, and continues into December with meetings in Dallas. “It’s busy, and before you know it, the season gets going.”
Northern New Jersey sports fans may recognize Pepe’s last name and wonder, “Is he …?” And the answer is yes. Dave is the son of longtime New York Daily News sportswriter Phil Pepe. Some of his happiest memories are of going over the George Washington Bridge from the family’s Bergen County home and spending time at Yankee Stadium.
“My father started covering the team back in ’61,” Pepe says. “In the late ’60s/early ’70s, he used to put my brother and me into seats behind the press box and we used to watch 60 or 70 games a year. It was a lot of fun. For my father, baseball was a business. I learned at a very early age the business aspects of the sport.”
Pepe’s partner in Pro Agents also has a name that looms large in the New York baseball world: Billy Martin Jr.
“He is one of my best friends in the world,” Pepe says. Martin is the son and namesake of the Hall of Fame Yankee skipper from the team’s run of 1970s championships. “Every year my father would go down to Florida to cover the New York Yankees during the spring. It was a six-week period right in the middle of the school year. He didn’t like to be without his family so he’d pull us out of the school up here and put us in the Fort Lauderdale Winter School. A lot of the players’ kids, and the coaches’ and George Steinbrenner’s kids, went to the school as well. That’s how I met Billy Jr.”
The two remained close through adolescence, college and their early careers: Pepe went into law, Martin into television. Their love of baseball endured. They figured their best chance to get into the game was through the agent business.
“I landed my first client while I was working as a producer in Dallas,” Martin says. “David also had a client. We would ask each other, ‘Hey, how are you going to handle this? And what would you do here?’ One thing led to another and before you knew it, Pepe was helping Wilentz Goldman build a sports agency.”
Pro Agents incorporated in 1994. Although several other Wilentz attorneys lend a hand, Martin and Pepe are the only licensed agents on their roster.
Pepe’s professional involvement with the national pastime began while he was in law school at Seton Hall. He spent summers with the New York Yankees, interning with the guy who would later become the team’s GM, Brian Cashman. Pepe worked with the team’s two in-house counsels, evaluating statistics, handling signage issues and helping negotiate lease agreements for the stadium. Additionally, he would do odd jobs like sitting behind home plate with the radar gun and transmitting pitch speeds to the television booth for $50 a game. “It was a very good place to be, seeing Mr. Steinbrenner walking down the halls and how he conducted his business,” he says. “Was he a tough boss? Absolutely. But nobody worked harder than he did, so I think he was entitled to demand that of his employees.”
Upon graduation he had a choice: Stay with the team or go with a Morristown firm, Ribis, Graham and Curtin, where he had been offered a job. A Yankee attorney advised Pepe to get some law firm experience, so Pepe took the job with Ribis, where he did regulatory and liability work for a New Jersey casino and served as counsel to the New Jersey Cardinals, a minor league team in Sussex County. It was his experience with the Cardinals that started him down the agent path. “I started meeting minor league ballplayers and representing them.”
Wilentz Goldman noticed Pepe and saw an opportunity. “We thought it would be beneficial to combine an agency with the legal business that we have,” says managing partner John Hoffman. “Dave has done an outstanding job, both as an agent and as a lawyer.”
With the firm’s backing, Pepe and Martin went to work amassing clients. Today they have seven players on major league rosters. Not all of them end up making Nathan money. “From a business standpoint, a player has to be in the major leagues into their arbitration years [at least three years] for us, as agents, to make money. We’ve had players who got onto a roster and didn’t make it to the arbitration year — successful players, but, from a business standpoint as an agent, not great clients.
“I mean, to make it to the major leagues, you have to be one of the best in the world. But some just don’t get the opportunity to make the big money. Take Mark Fidrych. He won 19 games in the big leagues, but never made any money because he was a rookie, never got to his arbitration year, and never got to be a free agent.”
Baseball remains Pepe’s focus: 99 percent of his and Martin’s clients play the sport, including Nathan and Williams, pitcher Sean Henn, who was up and down with the New York Yankees last season; outfielder Dan Ortmeier with the San Francisco Giants; Cardinals outfielder Reid Gorecki; and Cliff Bartosh, a left-hander with the Chicago Cubs.
“I tell my clients all the time that it’s difficult to get to the major leagues, but it’s more difficult to stay there,” Pepe says. “The guys that I’m representing are already skilled, accomplished players. They’re skilled enough to get drafted, and that’s why I’m representing them. Some will get to the majors by virtue of their signing bonus, some because they got drafted in the first five rounds. It might be partly due to the decision made by the scouts. But once they’re there, they have to stay there, and every year there’s another first rounder, second rounder right behind them. It’s a very tough business.”
Pepe’s reputation among general managers is sterling, which is essential in his business. “Dave’s a good person and a professional, and he’s one agent who likes to get deals done,” says Minnesota Twins General Manager Terry Ryan. He and Twins Assistant General Manager Wayne Krivsky negotiated the Nathan deal. “He’s creative and thinks outside the box,” Krivsky says. “In Joe’s case, he wanted to get some security, and we worked out a multiyear contract that was good for Joe and good for the club.”
Pepe’s portfolio at Wilentz Goldman isn’t all baseball-related. He also handles personal injury cases. “I found there was a synergy between the two areas. In representing athletes, we deal a lot with injury. In personal injury, you’re dealing a lot with medical conditions. At the end of the day, you are paid for your impact. You are paid for the amount of money you can get for a person who was hurt in an automobile accident. You are paid when your client is making a lot of money from a contract that you negotiated. I don’t get paid for my time.”
In his spare time, Pepe … plays baseball. “I started playing again when I was 30,” he says. “I play more now than when I was a kid. I play second base. I can run a little, hit a little, but the arm is way below average.”
But the brain is not. As any fan will tell you, baseball is a cerebral game filled with moves and countermoves. The same is true with contract negotiations. When it comes to playing this game, Pepe never needs to call in a reliever.