January 13, 2012 by staff
Leigh Steinberg, Leigh Steinberg was the biggest agent in sports long before “show me the money,” the iconic catch phrase from the Steinberg-inspired film “Jerry Maguire,” became part of the everyday American vocabulary.
During his career Steinberg had negotiated contracts reportedly worth more than $2 billion for a client list that included Super Bowl winning quarterbacks Steve Young, Troy Aikman and Ben Roethlisberger, and world champion boxer Oscar De La Hoya. An unprecedented eight of Steinberg’s clients were selected as the top overall pick in the NFL Draft.
But by 2009 the Newport Beach-based agent, had by his own admission, “hit rock bottom.”
He was unable to work as an agent, decertified by the NFL Players Association, was millions of dollars in debt and facing a series of lawsuits. Two of his children were afflicted with retinitis pigmentosa, an eye disease that causes near blindness. He had lost his home and his marriage. And after bouncing in and out of rehab for two years, he was losing his battle with alcoholism.
“By 2009 I was focused on sobriety and not focused on lawsuits,” Steinberg said. “I had people telling me ‘Hey, you’ve got to save your life.’”
An interview with Steinberg, 62, by The Orange County Register and documents filed with U.S. Bankruptcy Court this week reveal how the life of one of American sport’s most influential figures, the original uber agent, unraveled, a fall from grace that mirrors the script of the blockbuster film he inspired minus, at least for now, the Hollywood ending.
“I felt like I was in the movie Pinocchio, in that scene where the kids go off to the island and they smoke and drink and break windows,” Steinberg said. “The only problem is they turn into donkeys.”
Steinberg, who once negotiated a series of record-setting, multi-million dollar deals for Hall of Fame clients, filed for Chapter 7 protection in U.S. Bankruptcy Court in Santa Ana on Wednesday, saying he is $3.18 million in debt His list of creditors include a former NFL player, a top college coach, a prominent Orange County company, a group of Philadelphia-area businessmen and a local socialite, according to documents filed in the case.
“The wreckage I’ve created,” he said referring not only to his financial problems.
Steinberg owes the Irvine Company $1.4 million in back rent for his Newport Beach office space, according to court documents. He also owes former USC and NFL running back Chad Morton $450,000, SMU coach June Jones $90,000, a group of Philadelphia are investors $350,000 and Orange County socialite Janice Agopian $150,000. Steinberg also owes the franchise tax board $10,464, the Internal Revenue Service $17,384 and the Mercer (New Jersey) County tax collector $73,041.
Steinberg is currently unemployed and lists $483,500 in assets, most of it property. He also lists among his assets a Vizio flat screen television worth $1,000, $150 in clothes, $50 in personal memorabilia, a 2001 Mercury Mountaineer worth $6,700 and as well as $475,000 in stock in Kool Systems.
“I really regret it came to bankruptcy,” Steinberg said, “because these people lent me money or services in good faith.”
In 1993, Steinberg negotiated a $50-million deal for Aikman with the Dallas Cowboys, the largest ever NFL contract at the time. The deal included an $11-million bonus, another record. The Aikman deal would later be surpassed by a deal put together by Steinberg for New England quarterback Drew Bledsoe.
But it would be the Steinberg firm’s dealing with an NFL journeyman that led to the unraveling of his career and finances. Morton, a fifth-round draft choice in the 2000 draft, played for four teams as a running back and kick/punt returner in seven seasons in the NFL. Attempts to reach Morton, now a Green Bay special teams assistant, on Thursday were unsuccessful.
The Morton debt stems from a 2006 lawsuit and a controversy that led to his decertification by the NFLPA, and coincided with the disintegration of his marriage and his descent into alcoholism.
“None of which are an excuse or a justification,” Steinberg said. “No one poured alcohol down my throat.”
While Steinberg was trying to put together a groundbreaking and ambitious naming rights and sports facility building project in China in 2003, David Kim, an employee at Steinberg’s agency, approached Morton for $300,000 loan, in violation, Steinberg said, of NFLPA rules. Morton signed off on the loan.
“The underlying cause of my inability to earn money and resolve my debt situation occurred in 2003,” Steinberg said in an e-mail to friends. “One of my employees admitted that — without my knowledge — he had taken a $300,000 loan from one of our NFL clients. It was exactly the kind of transaction that I had specifically forbidden, and it violated NFL Players Association regulations. The NFL player understandably fired me, then went to a rival agency. As a matter of background, you should know that this company is run by an agent who used to work at our firm. We filed a lawsuit to challenge the way this agent had left our firm, and we won. Two attorneys on the losing side are involved in the current case concerning my debt.”
Kim could not be reached for comment.
By the 2006, the principle and the interest on the loan was $450,000. Steinberg said thought he had reached an agreement with Morton only to have the deal fall through. Morton eventually filed suit against Steinberg and Kim in Orange County Superior Court. Steinberg said he was decertified by the NFLPA. The man who was synonymous with No. 1 draft choices and championship quarterbacks was banned from representing NFL players. Steinberg said he offered to settle with Morton in return for a letter from Morton and his representatives to the NFLPA that would enable his re-certification but pulled out of the deal when the two sides couldn’t agree on the language in the letter.
“When I borrow money I owe those people the money back,” Steinberg said. “The Morton case made it incredibly difficult to work. When prospective clients are getting notices of debt it tends to have a chilling effect. It’s made it difficult to get back to work.”
Around the same time as the Morton suit, Steinberg’s marriage broke up.
“When I moved into an apartment by myself I found out you could drink during the daytime,” Steinberg said. “I had never lived an unstructured life like that.”
Steinberg was arrested for DUI on April 12, 2007, after the Mercedes Benz he was driving careered into three parked cars and a fire hydrant on Pacific Coast Highway near the Balboa Bay Club. He pled guilty and received probation. He checked him himself in and out of rehab facilities in 2008 and 2009.
“That clearly wasn’t effective,” Steinberg said.
With great frequency he began to “check out episodically.”
“I would function really well at work but then maybe on Monday I wouldn’t go into work for the day, or a maybe a day and a half,” Steinberg recalled in the interview. “That would happen once in a blue moon. And then it would happen once a month, and then it would happen every other week.”
He was arrested for public intoxication on October 22, 2008, and again pled guilty. The 2008 arrest led to his probation being revoked and led to a disciplinary hearing in front with the state bar association.
“My judgment and oversight of my affairs was not consistent and at times impaired,” Steinberg said in the e-mail.
He said he has been sober since March 31, 2010, but he remains frustrated by the absence of an agreement with Morton and his representatives that would enable him to return to work.
“My attempts to rebuild my life have been hamstrung,” he said.
He was recently served with legal papers from a suit with the Irvine Company while working as the master of ceremony at a Jewish Sports Hall of Fame banquet in Newport Beach.
The frustration is clear in his voice as he talks about the incident or recounts the struggle to resolve matters with Morton and his representatives. Eventually his tone turns to one of resignation and the acknowledgement that while he might believe others have since piled on, the wreckage he now tries to crawl out from underneath was largely created by his own self-destruction.
“I have lived with this in recent years,” he said, “and it is time to follow a more constructive path.”
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