Naomi Osaka has been breaking barriers since she burst on the national radar with her 2018 US Open title over Serena Williams. She was the first Japanese tennis player to win a Grand Slam singles event and later the first Asian player to hold the top ranking. In 2020, she used her platform to bring attention to racial inequality and police brutality, and spent much of 2021 discussing mental health.
Another breakthrough: Osaka has left IMG to launch her own sports agency, Evolve, which will be stylized as EVOLVE.
“I’ve spent my career doing things my way, even when people told me that it wasn’t what was expected or traditional,” Osaka said in an email. “Evolve is the natural next step in my journey as both an athlete and businesswoman, as well as a way to continue being myself and doing things my way.”
Osaka’s contract with Endeavor-owned IMG expired at the end of 2021, and as she explored a renewal with more flexibility in the kind of partnerships she could do, it became clear a renewal was not going to work. Osaka started Evolve with her agent Stuart Duguid, who has also left IMG. Both will hold equity stakes in the new firm, and there are no outside investors at this point.
Duguid has guided Osaka’s path to becoming the highest-paid female athlete in the world. She ranked 20th in Sportico‘s 2022 list of the world’s highest-paid athletes with $53.2 million. Her $52 million in endorsement income is topped by only LeBron James, Rodger Federer, Tiger Woods and Cristiano Ronaldo.
Athletes have left big agencies to strike out on their own for decades. Jack Nicklaus left IMG in 1970 to launch Golden Bear. LeBron James started LRMR for his marketing work in 2006 and entrusted close friend Rich Paul with his on-court contracts, while Maverick Carter handled business off the court. Roger Federer began Team8 in 2013 with his long-time agent Tony Godsick, while golfer Rory McIlroy started his own firm the same year. Rafael Nadal decamped from IMG a year later with his agent Carlos Costa. Kevin Durant and Rich Kleinman founded Thirty Five Ventures in 2016 to operate the business of the four-time scoring champion.
But Osaka is the first female athlete at that level to take full control of her business endeavors and attempt to build an agency.
“I’m excited to start this with my business partner Stuart and our plan is to use the same approach we took in building my businesses authentically and strategically as a vision for this company,” Osaka said. “I strongly believe in the power athletes have to use our platforms to drive meaningful business.”
She added that she wants the new agency to “be at the forefront of breaking down the barriers that still exist in sports and broader culture.”
Athletes like James and Osaka don’t need large agencies to open any doors for them. They are already business conglomerates. These wildly marketable athletes also pay millions of dollars in commissions, as their out-of-competition earnings grow. They often get a break on the 15-20% cut most agencies take on endorsements, but bringing everything in-house allows them to build equity in an agency business that outlasts their athletic careers.
The commission issue has stopped some athletes and their agents in the past from leaving the mothership. Once an athlete and agent leave an agency, commissions on existing deals are normally the subject of a complicated and lengthy negotiation, with the incumbent agent often due a percentage for continuing to service those partnerships. Duguid would not comment on his arrangement with IMG.
The four-time Grand Slam champion is definitely following the LeBron model with her off-court game. “We’ve moved away a bit from traditional endorsements and are focused more on true equity partnerships where we can add value, along with creating our own companies at the same time,” Duguid said in a phone interview. “This gives a platform to take bigger swings.”
She has equity in roughly a dozen brand partners, including Hyperice, Sweetgreen, Modern Health, FTX and Autograph, where she was an early investor and advisory board member. Osaka is the founder and CEO of Kinlo, a startup sun care brand. This month, it became available in 2,500 Walmart stores. She also has her own swimwear line, Frankie’s, and a sleepwear one with Victoria’s Secret.
The 24-year-old recently started working with Alex Cohen as her investment advisor. In 2021, Cohen launched his own firm, Heights, after more than a dozen years at Main Street Advisors, where he oversaw private equity and worked alongside Paul Wachter, Main Street’s founder. Wachter has been instrumental in guiding LeBron’s business career and has invested alongside James and Carter in several of their ventures.
Duguid says his relationship with Osaka has transitioned over time from athlete-agent to more of a business partnership, and that will be evident at Evolve where they will invest in businesses together, something that was not an option at IMG.
Carter and James have mutually invested in businesses, such as sports tech firm StatusPRO—Osaka and Drake are also investors. Federer and Godsick offer a blueprint for Osaka. Their partnership has generated more than $1 billion in earnings for the 20-time Grand Slam champ. Federer holds a nine-figure stake in ON Running, as part of his endorsement deal, and Team8 is also an investor. The agency launched and owns the Laver Cup and is considering a bid on the ATP Tour event in Cincinnati, according to a tennis insider. It is on the block and one of only nine Masters 1000 tournaments.
Duguid is not interested in building Evolve into a large firm and says it would likely only consider taking on another client or two. More new ventures will be announced soon around Osaka and the agency.
“The core of Evolve is building Naomi’s business from $50 million a year to $150 million a year,” Duguid said.