ESPN.com - Superagent has blueprint to rebuild empire

ESPN.com: Sports Business

Friday, November 15, 2002
Updated: November 16, 4:22 AM ET
Superagent has blueprint to rebuild empire

By Darren Rovell
ESPN.com

Leigh Steinberg doesn't need anyone to tell him how to rebuild his business. He wrote the book on how to build it in the first place.

Steinberg, the sports superagent who was a consultant to the movie "Jerry Maguire," built an athlete-representation empire on the principles he spelled out in his best-selling book, "Winning with Integrity." Now, perhaps more than ever, he'll be relying on one simple principle from that book -- "develop relationships, not conquests" -- in an effort to win back a dwindling client base that was decimated by the defection of a key partner nearly two years ago, and to rebuild his reputation that was impugned during the ensuing legal battle that followed David Dunn's split with Steinberg's firm.


	Leigh Steinberg, right, plans to take a chapter out of his own book and build relationships with players.

A U.S. District Court jury in Los Angeles awarded the parent company of Steinberg's firm nearly $45 million on Friday, ending a six-week civil suit against Dunn and his new agency, Athletes First. But while the verdict brought Steinberg vindication, at least legally, the victory hasn't come without a heavy price that he has had to pay in the court of public opinion.

Before Dunn's acrimonious exit led to the exodus of the majority of the firm's client base, Steinberg, Moorad & Dunn represented nearly 90 NFL players. More importantly, the firm represented 24 quarterbacks in the league, earning huge paydays on commissions on eight-figure player contracts and the lucrative endorsement deals that soon followed. Now, in the wake of Dunn's departure, only 26 NFL players are represented by Steinberg's once-mighty agency.

"I've definitely asked myself if we even want to get that big again and the answer is no," Steinberg told ESPN.com. "I think the ideal size of our football practice would be around 40 or 50 clients. We got very big, but what do you do, stop recruiting? Especially if people want to be represented by you."

Steinberg first made a name for himself as an agent in 1975, when he negotiated Atlanta Falcons quarterback Steve Bartkowski's four-year, $650,000 rookie deal. Eight years later, he landed a $40 million contract for Steve Young to play with the USFL's Los Angeles Express. And in 1989, Steinberg negotiated an $11 million signing bonus for Troy Aikman.

Three years ago, when Steinberg, Moorad & Dunn was acquired by Canadian management company Assante for $74 million, Steinberg was named CEO. He said he spent the next year struggling to maintain contact with the 30 players he was managing, as Assante stressed his responsibilities in marketing the firm while acquiring others. In the process, he compromised relationships and was forced to become a conqueror.

The appeals process

Lawyers for Athletes First plan to appeal the verdict, Mark Humenik, general counsel for the firm, told ESPN.com after Friday's verdict.

After the judgment is entered, attorneys have 10 days to ask the trial court to overturn the jury's decision. If Judge Ronald Lew agrees with the jury's verdict, the attorneys can file an appeal with the U.S. Court of Appeals in San Francisco.

The average time before an appeal is heard is about 18 months, Humenik said.

If there's any hope of rebuilding his agency, Mike Paul, president of MGP & Associates PR, a crisis management firm, said Steinberg will need to answer some pointed questions of himself before he embarks on his comeback trail.

"He should be asking himself if he's out of touch with today's players, is he humble and hungry enough to compete when he's not the king of the hill," Paul said, "and he should be asking himself what approach he has to take in order to adjust to what has happened around him."

Steinberg's firm now represents such NFL clients as Atlanta Falcons running back Warrick Dunn, Indianapolis Colts running back Edgerrin James, Miami Dolphins running back Ricky Williams and Jacksonville Jaguars quarterback Mark Brunell. Gone to Athletes First are Buffalo Bills quarterback Drew Bledsoe, Arizona Cardinals quarterback Jake Plummer, Cincinnati Bengals running back Corey Dillon and Tennessee Titans defensive end Jevon Kearse.

But if all of his current clients have the mindset of Ricky Williams, he'll be starting over with a solid clientele base that by industry standards would still qualify as a successful practice.

"I didn't really follow (the trial) closely, because I didn't feel like anything that was said there would make a difference to me," Williams said. "Leigh has been loyal to me and I'm staying loyal to him. There's not much that could have come out in court that would have changed my mind."

Williams hired Steinberg after he left No Limit Sports, which was owned by rapper/agent Master P. Steinberg has since helped restructure Williams' contract after the running back was traded from the New Orleans Saints to the Dolphins during the offseason.

But relationship building will be perhaps a tougher challenge this time around.

As part of their case, Dunn and his associates argued that a dysfunctional workplace existed at Steinberg, Moorad & Dunn due partly because of Steinberg's alleged bizarre behavior. Some testified that Steinberg often would drink to excess at business functions and on at least two occasions had licked the faces of women at parties. Current Buffalo Bills quarterback Drew Bledsoe testified that several incidents, including the time he claimed Steinberg propositioned the wife of a friend, led him to encourage Dunn to leave the firm and branch out on his own.

"You should treat your employees, partners and clients like you would want to be treated and that was not done here," said Mark Humenik, general counsel for Athletes First, Dunn's agency. "This wasn't about Leigh Steinberg alone. It was about Leigh, as well as a combination of factors that made the workplace unbearable."

Said Steinberg: "I'm not a perfect person and I haven't lived a perfect life. But when it comes to representing athletes with honor and dignity, I think that I have done that. The reality is that so much of what was presented at trial was completely and totally irrelevant to the case. It was obviously a desperate attempt at character assassination."

With all the dirty laundry aired during the trial, it remains to be seen how Steinberg is going to fare recruiting players in the cutthroat business of athlete representation. He said he realizes that the number of friends he has made through his business dealings was inversely proportionate to the success he and his firm have achieved over the years.

"He wasn't doing any contracts in the end and he was just flying in for the press conferences," said one prominent NFL agent, who has represented more than 40 players over the past two decades. "He was a fraud, he was just selling magic and maybe that will come out now."

Though Dunn maintains that he negotiated the contracts for most of the firm's clients over his final years there, Steinberg maintains that he has carried his weight, too. Among the player contracts Steinberg said he negotiated were the rookie deals for Drew Bledsoe, who was drafted No. 1 overall in 1993; Ki-Jana Carter, the first pick in 1995; Darrell Russell and Tony Gonzalez, the second and 13th picks in 1997; Ryan Leaf, the second pick in 1998; and Akili Smith, the third pick in 1999.

Union fallout

U.S. District Court Judge Ronald Lew will render a decision Wednesday on whether Athletes First can keep the former clients of Steinberg, Moorad & Dunn.

If Lew rules against David Dunn and his agency, an NFL Players Association official said the union will appeal, reasoning that it has sole regulatory power over player agents in the NFL.

Because of the large amount awarded in Steinberg's favor, Richard Berthelsen, an NFLPA attorney, said the union may eliminate future non-compete clauses among agents within a firm. The non-compete clause that Dunn signed with Steinberg, Moorad & Dunn was the major point of contention in the trial.

If non-compete clauses are eliminated, players could freely follow an agent that leaves one firm for another.

"If that happens larger companies would stop buying into smaller agencies because there would no way to protect your assets," Leigh Steinberg said.

Steinberg now hopes to convince recruits that he has maintained relationships with the front-office officials of NFL teams over the years and that he can still help them land top dollar on their contracts.

"It definitely helps the process when you know them and they know you," said Stephen Jones, chief operating officer and director of player personnel for the Dallas Cowboys. "Leigh was always a good guy to work with."

Steinberg said his greatest asset will be listening to his clients' needs. He also knows there will be an onslaught of personal attacks from other agents. "I've gotten used to a lot of things over the past 27 years in this business," he said. "I'm used to negative campaigning."

Though Steinberg's firm was hit hard with losses of its NFL clientele, Steinberg's other partner, Jeff Moorad, manages a strong roster of some of the biggest names in baseball. Moorad's clients include Boston Red Sox outfielder Manny Ramirez, Los Angeles Dodgers outfielder Shawn Green, Anaheim Angels outfielder Darin Erstad, Texas Rangers catcher Ivan Rodriguez, Arizona Diamondbacks outfielder Luis Gonzalez and new Chicago Cubs manager Dusty Baker.

Longtime agents Marvin Demoff and Ralph Cindrich say they aren't wishing Steinberg away. It would be a waste of time.

"It's like he just threw four interceptions and he doesn't want that to be his last game," said Demoff, who once represented quarterbacks Dan Marino and John Elway. "He'll probably work hard to disprove everything that was said about him."

"People forget that he got where he did because he's a great salesperson," Cindrich said. "I believe if Steinberg (who was the student body president while at University of California) ran for public office -- and I mean a mayor, a governor or a senator -- he would win.

"Everyone always said they could do a better job than him," Cindrich added, "but they never got the chance because he always got the players."

Every once in a while Steinberg allows himself to recall the empire of NFL clients he once boasted.

"From 1989 to 1995, I had the very first pick in the draft six out of seven years," he said. "Will I ever do that again? Probably not."

And according to his relationships-before-conquest formula he once advocated, the best advice he could tell himself is not to spend the time trying to match his feat.

Darren Rovell, who covers sports business for ESPN.com, can be reached at darren.rovell@espn3.com.

ESPN.com senior writer Len Pasquarelli contributed to this report.