Advertisement

Steinberg to Sell Firm for $120 Million

Mergers: Newport-based sports agent's sale to Canadian money manager follows creation of other such companies that are combining entertainment and athlete representation.

October 28, 1999|E. SCOTT RECKARD | TIMES STAFF WRITER

Sports agent Leigh Steinberg, moving to launch his high-profile roster of celebrity athletes into new ventures, agreed Wednesday to sell his Newport Beach company for $120 million to Assante Corp., a Canadian money management firm.

Steinberg, whose clients include NFL quarterbacks Steve Young, Troy Aikman, Drew Bledsoe, Jake Plummer and Warren Moon, was the model for the agent portrayed in "Jerry Maguire," the Tom Cruise movie that introduced the phrase "show me the money" to the popular lexicon. He'll stay on at his company.

The deal marks the first foray into sports by Winnipeg, Canada-based Assante, a publicly traded company that manages more than $3 billion. But it follows the creation of several other high-profile companies blending entertainment businesses with sports agencies.

Steinberg said the merger will help his firm expand its services at a time when advertising, television and other media deals often are more important to athletes than the terms of the contracts he negotiates with their teams.

"The worlds of sports and entertainment are merging," he said in a telephone interview. "The presence of 150 TV channels, video games and the Internet have created a huge market for content that can be filled by athletes."

His company, Steinberg, Moorad & Dunn, will become part of Assante Sports Management Group, a division of Assante Corp. Steinberg will become chief executive of Assante Sports and his 50-50 partner, Jeffrey S. Moorad, its president.

In their new role, they will oversee expansions into sports-related TV and Internet programming and the acquisition of "10 or 12" other sports agencies. Steinberg wouldn't divulge the names of those agencies. They specialize in a wide range of sports, from football, baseball and basketball to wrestling, motor sports and golf, he said.

Steinberg said he anticipates helping create new roles for clients on TV sports quiz shows, TV sports biography shows, "anything with sports in it." He also plans to create a Web site with offerings ranging from athletes' weekly diaries to memorabilia sales.

Besides helping him expand into new media deals, Assante will offer financial management services to Steinberg's clients as their deals with outside money managers expire.

"It's something we've always farmed out in the past," he said. "I've talked with Warren, Drew, Steve and Troy, and they're excited about this, about it opening new doors for them."

Top athletes increasingly see themselves--or are persuaded to see themselves--as celebrities. More than just millions in salaries, their demands include exposure through movie and TV spots that can lead to post-sports careers, record deals, their own video games and other opportunities.

At the same time, agents such as Steinberg fear their roles as salary negotiators for the best athletes could be severely limited. The National Basketball Assn. already has capped individual salaries, and owners of other sports teams are considering pushing for similar caps.

By diversifying, the agents can sell themselves to star clients reluctant to pay millions to someone who is proscribed from doing much negotiating on their behalf.

The new agency and entertainment hybrids have arisen in several fashions.

In a transaction last year, New York-based concert promoter SFX Entertainment Inc. paid $100 million to buy a sports agency operated by David Falk, which represents basketball superstars such as Michael Jordan and Patrick Ewing. SFX also bought the New York sports marketing and management firm Marquee Group Inc.

And Percy Miller, a rap star who performs as Master P, parlayed his recording earnings into an empire that includes a record label, film company and sports agency, No Limit Sports. The fledgling agency's clients include last year's Heisman Trophy winner, Ricky Williams of the New Orleans Saints, Derek Anderson of the Clippers and DeLisha Milton of the Sparks.

The Assante deal "helps us level the playing field" with these and similar companies, Steinberg said.

The Steinberg purchase is Assante's 17th acquisition, and "consistent with our approach to partnering with preeminent firms in each of our chosen lines of business," said Assante's chief executive, Martin S. Weinberg.

Sports agents forge powerful bonds with their wealthy young clients, and Assante, whose services range from nanny-hiring to estate planning, will provide a way for agents to extend that bond over the client's life by providing post-retirement services, Weinberg said.

The $120-million deal involving cash and Assante stock is a stunning reward for Steinberg, who began his career by representing quarterback Steve Bartkowski in 1975 and teamed with Moorad a decade later. The firm's roster includes more than 150 football, baseball and basketball players, plus boxers, Olympic champions and retired athletes.

Steinberg's firm can earn as much as $40 million in additional bonus payments if it meets certain goals during the next five years.

Advertisement
Los Angeles Times Articles
|
|
|