If you think you’ve never heard of Leigh Steinberg, you might want to rethink. Steinberg is an accomplished sports agent, loosely portrayed by Tom Cruise in the film, Jerry Maguire. During his 41-year career, Gas Steinberg represented more than three hundred professional athletes.
In this 2013 episode, EconTalk host Russ Roberts and Steinberg dive into his unique approach as an agent, showcasing his model for both acquiring athletes and helping them achieve what they value most. Steinberg covers topics such as crisis management and cohesive growth of the game of football with every party involved in contract negotiations in this fascinating discussion with Roberts.
1- Steinberg succeeded in creating a unique model for the athletes he wanted to attract. In recruiting clients, he favored athletes who wanted to be role models and who hoped to launch their own personal brand while also achieving athletic success.
Steinberg also realized the marketability and capital-forming quality of quarterbacking, as well as the advantage of regionality in controlling costs and revenue. What other profit maximizing strategies would be useful for agents looking to start a successful business today? What other qualities in today’s athletes (besides being quarterbacks!) can provide fertile ground for an agent’s growth?
2- Steinberg’s approach to maximizing an athlete’s capacity for action is interesting – he wants to push the athlete to become the captain of his own ship by providing him with a model of post-athletic success as well as by sponsoring. Steinberg encourages both financial planning and a structure that traces the roots to create a meaningful impact on the athlete community.
What value should athletes place on preparing for a possible career after sport? Should sports agents be as involved in the lives of athletes as Steinberg? If not, how can athletes maximize their individual potential while developing an ideal post-sport lifestyle?
3- Steinberg and all sports agents must be able to manage crises effectively. When her clients make a public mistake, Steinberg has a step-by-step strategy to control brand pushback. Steinberg believes the athlete needs to take responsibility as someone with a big platform, and also need to apologize and offer their measures to prevent the action from happening again.
How often do we see athletes today going through this process and how authentic does it feel? Have athletes’ personal brands and earning potential been impacted more in recent years due to the prevalence of cancel culture?
4- Steinberg asserts that the NFL competes with every other form of entertainment that people spend money on, and that agents should cooperate with owners to grow the game and build a pie big enough for everyone everyone can share it. According to Steinberg, contract negotiations are a closed system in which owners, general managers and players are all constantly involved. He thinks negotiations should be less about labor and more about management and instead each side should come up with creative ways to increase revenue. As an agent, Steinberg focuses on creating an income stream for the athlete with creative business ventures.
How have we seen athletes expand their brand to become cultural phenomena? What are the untapped areas of business that could offer great earning potential for athletes and agents?
5- Steinberg believed that contract negotiations after the NFL Draft were an “artificial construct” because players would automatically earn more than they would if they stayed in college one more year.
How do NIL opportunities change the role of agents and general managers when athletes consider returning to college athletics instead of entering the draft?
6- Steinberg believes that a sports agent must understand his client’s appreciation of the specific characteristics of a contract because it is not always a question of receiving the highest salary. Roberts and Steinberg discussed Tom Brady’s new contract at the time, which may have offered the Patriots greater spending flexibility. Often fans see this as a sacrifice by a player to help his team win, but other parts of the contract, like guaranteed money, weigh more in the player’s decision than any other incentive.
Are there as many situations as it seems where players really take a pay cut for the good of their team? Given that athletes are already making tons of money, which parts of their contract should they value the most?
Brennan Beausir is a student at Wabash College studying Philosophy, Politics and Economics and is a 2023 Liberty Fund Summer Fellow.