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Monday, April 1, 2002
Updated: March 23, 10:12 AM ET
Crash landing

By Peter Keating

book
Steinberg's book detailed his negotiating strategies.

This story appeared in ESPN The Magazine's April 1, 2002, issue. Subscribe today!

EIGHT FLOORS above the Pacific Ocean, with a sweeping corner view of Newport Bay, Leigh Steinberg's office is so cool he hates to leave it. Awards here, helmets there, signed footballs everywhere. Photos ranging from Kissinger to Aikman, the latter a life-size cutout. A stationary bike, a stereo, a tropical fish tank. There used to be a poster there, too: "Ten Reasons Why Drew Bledsoe Will Kick You in the Butt." Nine frames showed the QB in assorted action poses. The tenth was of Steinberg, Bledsoe's agent. When he signed the Washington State junior in 1993, Steinberg was on an amazing run. He negotiated $325 million in NFL deals that year, including a five-year, $26.5 million package for Steve Young, the biggest ever at the time. Steinberg knew how to handle No.1 overall picks (he's repped seven) and specialized in quarterbacks (at one point, he had 24). And his relationship with Bledsoe started out well -- when Cameron Crowe saw the two joking at the draft it helped him imagine the central relationship in Jerry Maguire.

Somewhere along the way, though, Steinberg lost his way. To put it simply: The bigger he got, the further he drifted -- from the nuts and bolts of his business, from his ideals, from his players. Turns out, you see, there's an 11th way Bledsoe can kick you in the butt: He can fire you. Like many Steinberg clients, Bledsoe eventually grew closer to a junior partner, David Dunn, than to the superagent himself. And when Dunn and two other agents left Steinberg's firm last year, Bledsoe went too. So did dozens of other pros, including some of the NFL's top stars. Now the agents are embroiled in a nasty lawsuit in which Steinberg accuses Dunn and associates of blackmail, breach of contract and stealing trade secrets, while they accuse him of incompetence and erratic behavior. The suit threatens not only to embarrass all parties, but to roil the agent world. "Dynasties will crumble," says Lynn Lashbrook, president of Sports-Management.com. Not so long ago, Steinberg was larger than life, the most famous -- and most powerful -- sports agent on the planet. Today he's a shadow, waiting to see if his practice, reputation and dreams will be ripped apart.

THEY SAY DREAMS fade away, but that gets the map of life exactly reversed. Every choice you make adds weight to your course, until there's too much momentum to change direction, to break through the walls that have built up around you. Dreams don't vaporize; reality calcifies. Emerging from the optimistic haze of the late '60s, Leigh Steinberg could have been anything he wanted to be. His parents, a teacher and a librarian in LA, pushed public service along with ambition. By the time Steinberg entered Berkeley, he had the ego for leadership and the charisma to convince peers to make him student body president -- though he was forced to resign when another student was found to have taken a French test for him. Steinberg had the brains for law school and the guts to leave law behind when a more exciting opportunity came along.

Steinberg was a law student and dorm counselor at Cal in the early '70s when the freshman football team moved into his building. Among the players was future All-America quarterback Steve Bartkowski. After Bartkowski was drafted No.1 overall by the Falcons in 1975, he asked Steinberg, who had become his friend, to represent him. The rookie dealmaker wangled $600,000 over four years for his client, at the time the richest contract for a draftee in NFL history. Stunned by the attention he and Bartkowski received, Steinberg decided to become an agent. Soon, Leigh Steinberg was everything he wanted to be: a latter-day Robin Hood, convincing rich owners to give lots of money to his players. His players -- the world's best athletes, celebrities, men he counted as friends. Boosted by his big deals -- and by his PR firm -- Steinberg was the most visible agent in America. He popped up on talk shows, modeled his gray-green eyes and tan for GQ, let Lifestyles of the Rich and Famous film his wedding, cameoed with Young on Beverly Hills 90210.

People who knew him then were struck by Steinberg's lack of pretense -- he often went barefoot, even on 60 Minutes, and his shirts were stained with chaw. The anti-style was real, but also strategic. Steinberg wanted to be known as a new breed of agent. He relaxed you, charmed you, heard you. But he also lured you. "You didn't want to leave his office," says someone who's seen Steinberg negotiate. "Or maybe it was more like you couldn't." The man had a vision: He'd show clients that image mattered, that they could make even more millions, and have careers after the game -- if they led lives that kids could emulate. And he'd turn agenting from what was a sleazefest into a virtuous pursuit -- cashing fat checks along the way. In 1985, Steinberg partnered with baseball agent Jeff Moorad. Now Steinberg was sharing 4 percent of football contracts, 5 percent of baseball and basketball deals and 15 percent of endorsement revenues -- and the two men got rich as their firm expanded. By the late '90s, Steinberg & Moorad had nearly three dozen employees, including David Dunn, whom Steinberg met in 1979 while recruiting Dunn's brother-in-law out of UCLA, and Brian Murphy, who joined in 1999 and quickly become Steinberg's righthand man. In return for googol-size contracts, Steinberg promised that his athletes would be good citizens, wouldn't hold out, wouldn't try to renegotiate. And whenever he landed another quarterback -- Troy Aikman, Jeff George, Bledsoe -- Steinberg insisted the star join his new community.

Steinberg players have donated more than $60 million to charity; dozens have set up scholarships at high schools and colleges. Again, Steinberg was genuine and shrewd. "Every time Rolf Benirschke kicked a field goal he donated money to a local charity," says former California attorney general John Van de Kamp, an old Steinberg acquaintance. "Benirschke lasted a long time in San Diego." In negotiations, the always-prepared Steinberg was more mediator than hostile advocate. He once said, "My chief job is to avoid destructiveness." He'd listen, then press his case in marathon sessions. "Leigh's patience is an incredible virtue," says Rusty Kennedy, director of Orange County's Human Relations Commission in California, who worked with Steinberg on youth-development projects. "He looks to meet everyone's needs." For the first two decades of his career, it seemed Steinberg never had to make the choices that set mortals courses.

Living every boomer's dream, he avoided distinctions between being himself and succeeding. He earned loyalty from athletes, respect from owners, influence in the world and millions of dollars, all at once. In 1995, he even got away with representing all three Steeler quarterbacks. And he walked the walk, setting up leadership institutes for young people. "It was not an affectation," says Amy Wilson, an Orange County Register reporter who's covered Steinberg for years. "He was good enough to have things the way he wanted them. And it worked, for a long time." By the late '90s, though, Steinberg's closest and most important clients -- Aikman, Warren Moon, Young -- were fading just as the complexities of the NFL's salary cap began to take root. Steinberg had skillfully used the existence of alternative leagues to land contracts that made him famous, sending Young to the USFL, bringing Moon down from the CFL. That leverage was long gone. So were straight-up negotiations unimpeded by complex formulas. Still, if Steinberg's tactics no longer defined the art of the deal, his agency's growth allowed him to defer figuring out a next step. He simply disengaged from day-to-day operations, handing off most football negotiations to Moorad, then Dunn. The publicity machine made it look like he was still at the top of the game -- especially to Steinberg. He was happy to publicly interpret props for Jerry Maguire as affirmation of his own honorable way in a dirty world (even though Crowe has said his movie was also based on rival agent Gary Wichard). And he pushed the theme himself in a 1998 best-seller, Winning With Integrity.

With Steinberg hitting middle age (he turned 50 in March 1999), some thought he'd pursue the political career they suspected he coveted. "I thought he'd stop spending half his life on planes and chasing after athletes' car keys," says Wilson. "I was surprised he needed to stay in the business." But rare is the star who leaves on top, even rarer the dreamer who achieves his goals and walks away. Steinberg kept surfing the vibe -- hosting the hottest Super Bowl party every year, hanging with rock stars -- while chasing potential No.1 picks and the validation that accompanies them. More and more, though, the guys Steinberg chased were not so All-American. In 1997, he signed USC defensive tackle Darrell Russell and partied with him in New York the night before the Raiders selected him second overall. When Russell failed a drug test in 2000, Steinberg blamed the results on second-hand smoke. And when the NFL suspended Russell for a missed test, Steinberg ranted about the league's drug czar: "It's a bureaucrat who's obsessive-compulsive and is abusing Darrell Russell." A year after Russell was drafted, Peyton Manning -- a Steinberg guy if ever there was one -- signed with IMG. Steinberg got Ryan Leaf. Around this time, Steinberg's own behavior began to require the kind of maintenance usually reserved for other agents' players, according to court documents obtained by The Magazine. (Steinberg, Moorad and their parent company, Assante, are suing former associates Dunn, Murphy and John Marshall "Joby" Branion III, among others, in U.S. District Court in California. None of the principals would be interviewed for this story. But all have given sworn declarations, under penalty of perjury, in the ongoing litigation. The following account of the subject matter of the lawsuit has been taken from these declarations or other documents filed in this case unless otherwise indicated.)

Carmen Wallace, a former Steinberg employee, testified that Steinberg once left a bag full of athletes' phone numbers at O'Hare Airport and another time forgot a notepad stuffed with client data in a rival's office. Wallace said he grew accustomed to hotels calling to ask if his boss wanted his possessions returned. Steinberg may have become indiscreet in other ways, too. He is alleged to have licked the ear of a female employee in 1998 while hosting a party before a golf tournament. The woman complained to Moorad, testified Wallace, who added that Steinberg's "inappropriate behavior toward women was not a one-time occurrence." In a memo Murphy wrote to his lawyers in January 2001 -- and which Murphy's lawyers claim was privileged and should not have been introduced into the case -- the agent stated that Steinberg once "hired a hooker in Vegas who stole his wallet, and I had to spend the whole next day getting it back and paying her off." (According to a spokesperson: "Leigh Steinberg will not comment on these rumors and lies" or any other negative description of Steinberg's behavior in Murphy's memo.)

Steinberg, colleagues said, started ignoring athletes. When rookies came to work out at Steinberg & Moorad's facilities, they got little face time with him. "Leigh makes no attempt to maintain his current players," Murphy wrote in his memo. "He simply signs them and never sees them again." In the spring of 1999, Steinberg & Moorad agent Joby Branion scheduled an 8 p.m. meeting for his boss at the home of a top college quarterback. But Steinberg had a book signing that night. He and Branion finally got to the player's house around 11 p.m. When they arrived, Branion said in his declaration, "Steinberg spent the next hour talking about himself, telling the family all about his book and various questions his fans had asked him." The family went elsewhere for representation.

The skills and qualities that earned Steinberg fame and landed him book deals were now, it seems, being neglected. Existing clients -- such as NFL stars Johnnie Morton and Dan Wilkinson -- moved on as Steinberg started to lose his personal touch. But to outsiders, Steinberg was still in command of a very profitable operation and, inevitably, suitors started calling. In October 1999, a Canadian financial-management firm showed Steinberg the money -- $120 million. His firm became a subsidiary of Assante Sports Management Group, with Steinberg as CEO and Moorad as president. The superagent's dreams grew larger. At the time of the buyout, Steinberg said he planned to buy another 10 sports agencies, for starters. He envisioned a new kind of sports conglomerate: marketeer of jocks, teams, leagues and corporations; operator of tournaments and superstar competitions; naming-rights adviser; developer of TV programming.

The problem was that Steinberg seemed increasingly unwilling -- and unable -- to do the work it took to transform his vision into reality. Or even to maintain what he'd built. The balance of power at his firm was shifting. Increasingly, Dunn was the point man for clients -- fielding calls and making dozens of trips a year. Dunn has estimated that he negotiated more than 90 percent of the firm's football and basketball contracts; Moorad took the lead in a handful of others. Steinberg? Even his court filings acknowledge that he "entrusted his football practice" to Dunn. In fact, around the time of the Assante deal, Steinberg & Moorad became Steinberg Moorad & Dunn. And in October 1999, according to Dunn's declaration, just before Assante bought SMD, CEO Marty Weinberg offered Dunn a contract extension and a piece of the firm. Dunn said he asked Steinberg more than 20 times about his stock, and wrote to Assante's lawyers. But Dunn never became an equity partner in the firm that bore his name. By purchasing SMD, Assante joined the ranks of the conglomerates, including Octagon and SFX, that were set to dominate the world of sports agencies. But to some, the price was too high. Murphy thought corporate ownership by Assante "transformed SMD into a place where the majority of employees were unhappy and where the bottom-line approach we were forced to adopt led to the neglect of clients." Steinberg once advised negotiators never to "underestimate the capacity of another human being to have exactly the same shortcomings you have." He didn't mention how to deal with opponents who have very different shortcomings.


STEINBERG, ACCORDING to the testimony of former co-workers, went through periods of heavy drinking. More than once in 2000, he "left messages on Dunn's voicemail [in a] slurred and sloppy-sounding voice, and it sounded like he was drunk," said Erin Bohrnstedt, Dunn's assistant. And on one trip to Malibu, Steinberg called Murphy to his room at 1:30 a.m. and announced he was giving up his career -- to run for president. "Realizing that he was not coherent," Murphy testified, "I simply told him that if that is what he wanted to do, I would be more than glad to help him out." By autumn 2000, according to Murphy's memo, Steinberg would routinely come to work at 11 a.m. or noon, stay an hour, leave to work out, then return for a little while to talk to the press or his colleagues. Murphy's memo says that he believed Steinberg was drinking a liter of vodka a day and using prescription drugs. Steinberg's weight, which famously yo-yoed, looked to Murphy to have ballooned to 270 pounds. Murphy thought Steinberg's name was still a draw, but was convinced his boss could no longer relate to young athletes. In fact, by Murphy's calculations, Steinberg had lost five of the top players in the 2000 NFL draft by making them or their families uncomfortable. Wallace claimed the firm lost one wide receiver prospect because Steinberg bad-mouthed another player, a rookie who had legal problems, to the wideout's uncle. "Steinberg told the uncle that nobody could help the client, that he was just that kind of kid," said the former SMD employee.

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Top clients later became top defectors.

Less than a month later, the new recruit had a run-in with the police. His uncle called Wallace, according to Wallace's declaration, and said he was afraid Steinberg might abandon his nephew, too -- so the uncle was hiring a different agent. In January 2001, when Murphy told Steinberg that SMD had lost the kid, Murphy said their conversation exploded into an argument. "He screamed that Eugene Parker [another Assante agent] had interfered with the process by interjecting himself as a competitor," Murphy testified. He added that Steinberg kicked a TV, stormed out of the office and didn't speak to Murphy for more than a month.

By this time, Murphy had already begun to look for a way out, having told his father-in-law that he was thinking of setting up a competing firm. When Dunn confided that he was thinking of leaving SMD as well, the two men believed that if they left together, SMD's entire football department and 70 percent to 80 percent of the clients would follow. In a Jan.18 e-mail headed "Opportunity of a Lifetime," Murphy's father-in-law wrote: "You have all the pieces to the puzzle. Put it together first, then make your move." Three days later, Murphy sat at his office laptop and wrote his long memo. Marked "CONFIDENTIAL," the memo is especially powerful -- and cruel -- because Murphy never meant it for public, or even legal, consumption. Murphy was simply explaining his motives to his lawyers. He detailed Steinberg's personality, which he called "extremist," his drinking and sexual habits, his obsession for publicity, his recruiting failures. "If we wanted to, we could rip apart his marriage, his reputation and his career," Murphy wrote. "Neither Dave nor I want to do that, but the very thought of even the possibility will drive Leigh insane." Murphy listed a series of "Items That We Need From The Office," including "Incriminating Evidence Against Leigh and SMD." But the men didn't think they'd need to attack Steinberg openly. "This is probably the most important thing to know about Leigh," Murphy wrote. "He cannot let this go public."


DURING THE FIRST WEEK of February 2001, Murphy claimed that he was in Steinberg's office as the boss railed about the problems SMD was having landing new players. At the time, according to Murphy's memo, SMD was losing ground to IMG. "Steinberg went name by name down the list of athletes I had hoped to recruit to SMD and explained to me why he felt we lost each," Murphy said. "Except for the one incident he blamed on Eugene Parker, [he] placed the blame on other SMD employees." Clueless to Murphy's plans, Steinberg said SMD had to return to a system where he met athletes from the start. Then he gave Murphy a $50,000 bonus check. It was one more -- one last -- weird scene. The following week, Dunn and Murphy huddled to finalize their breakaway scheme, which was summarized in a memo titled "Gameplan" that has also been introduced in the lawsuit. They had developed a detailed time line for everything. One task for Tuesday, Feb.13, for example, was to compile a phone list with "all of Assante's numbers." On Valentine's Day, Bledsoe was supposed to call Mark Brunell about the new firm, Athletes First. A plan was attached to the memo, with 44 tasks to accomplish. No.1 was "Gather LS s -- ." On Feb. 16, the day they planned to "start calling clients and have them send in their termination letters," Dunn and Murphy faxed their resignations.

Bohrnstedt, Branion and Wallace soon joined the new agency. Clients followed: Bledsoe, Corey Dillon, Ahman Green, Jevon Kearse, John Lynch, Jake Plummer, Amani Toomer, Darren Woodson. Steinberg was blindsided, and confused. He couldn't be sure what information Dunn and Murphy had, or which players might leave SMD. He negotiated with the two agents to bring them back. Both sides kept the dispute quiet. After Dunn secured a 10-year, $103-million contract for Bledsoe, the QB was asked if he'd switched agents. Bledsoe responded, "That's a topic for another day." Dunn and Murphy squeezed Steinberg to stay out of court. In March, their lawyers wrote Assante: "In the event that this dispute is litigated, I believe that information that is embarrassing to both SMD and Assante will be revealed during the course of discovery." Steinberg believed he was being blackmailed and, eventually, that Dunn and Murphy were stringing him along so they could continue to milk his clients. By Memorial Day, three months of pursuing a settlement had gone nowhere, and there was a gaping hole where Steinberg's NFL practice used to be.

Last May, SMD sued Athletes First, asking a judge to stop Dunn and Murphy from doing business with SMD's former clients. Whether, as Steinberg has contended, Dunn and Murphy breached their contract with SMD, lied about their boss and his business practices, illegally took clients and information from the firm, and whether their conduct rose to the level of extortion -- these are questions a jury will decide. (Dunn, Murphy and the other defendants in the lawsuit have denied Steinberg's allegations. Both sides are still giving depositions, with a trial slated for the fall.) So far, judge Ronald Lew has ruled that Athletes First cannot represent any clients it gained using SMD's trade secrets. But the fundamental question is still unanswered. Dunn and Murphy say they trained themselves to be agents, recruiting their own clients. They claim, in other words, that there was nothing about how they did their work that was unique to SMD. Their lawyers have asserted: "There are no trade secrets at issue in this case." Eventually, that argument could have a much bigger impact than Dunn and Murphy intend. After all, if there's nothing special about agency methods, what value does even the biggest conglomerate add to what agents do? "All agents recruit in the same way," testified Branion, who compiled SMD's negotiating packets from public sources.

So say hello to free agency for agents. Already the NFL Players Association has intervened in the SMD v. Athletes First case, arguing that players should be free to choose agents whenever they like. "Here's what we're learning," says sports marketing consultant Ryan Schinman. "The minute an agent breaks off, players have no obligation to these supergroups. You leave, bye, you have your players." Steinberg once represented 86 NFLers. Now more than half are gone. You can make millions for players, it turns out, only to end up with a pile of faxed termination letters. As for Steinberg's dream that agents should help athletes better the world -- well, that's a tough banner to carry at the moment.


LAST MONTH -- in the same week that his firm negotiated a nice long-term deal for Warrick Dunn with the Falcons -- Steinberg sat on a panel with agents Arn Tellem and Don Meehan. His appearance at the World Congress of Sports in Manhattan was a mix of old and new. While Tellem and Meehan wore jackets and ties, the Berkeley man chilled in a golf shirt. But observers at the Waldorf-Astoria say Steinberg's behavior on the dais was more than a little odd. He made faces, munched snacks, fidgeted like a child. And he gave empty, rambling answers to questions, bouncing from his battles with Arizona Cardinals owner Bill Bidwill to the difficulties of competing against big corporations. After the panel, Steinberg was asked who his clients would be for the upcoming NFL draft. His response: "Call me next week."

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