The money’s been shown.
Last week’s news of a mega-contract for NFL quarterback Patrick Mahomes has brought another round of fame for Newport Beach sports agent Leigh Steinberg, often credited as the inspiration for the movie “Jerry Maguire.”
It’s also provided another record-setting claim for the agent, who has represented 64 first-round draft choices in the NFL over the decades, including eight No. 1 picks.
It’s the “biggest contract in sports history,” Steinberg said last week, following news of his star client Mahomes signing a long-term deal with the reigning Super Bowl champion Kansas City Chiefs.
The 24-year-old Super Bowl MVP’s 10-year contract extension is reported to be worth up to $503 million and could keep him in Kansas City through at least 2031.
It eclipses two other headline-making deals struck in 2019: Mike Trout’s 12-year contract extension with the Los Angeles Angels for $430 million, and Bryce Harper’s 13-year deal for $330 million with the Philadelphia Phillies; the latter contract was negotiated by another Newport Beach agent, Scott Boras.
Steinberg, founder of Steinberg Sports and Entertainment LLC, noted it was the second time he’s helped a QB ink a record-shattering deal.
The “last biggest all-time sports deal we did was in 1984 for Steve Young,” with the now-defunct United States Football League, he said.
That contract was for $42 million.
“Sports economics seem to have changed,” he quipped last week following the deal, whose negotiations were headed by partner Chris Cabott, the agency’s president and chief operating officer.
Guaranteed Money
Mahomes has electrified the NFL in the past two years when he’s been tops in touchdown passes, passing yards and wins. He’s the first player to win a league MVP and Super Bowl before his 25th birthday.
Specific terms of the Mahomes contract haven’t been made public, although news reports indicate the deal includes a unique payout schedule that involves “guarantee mechanisms,” or rolling guarantees that become effective on specified dates.
That gives Mahomes, who suffered a knee injury that kept him out of a few games last season, more protection from being cut from the team due to injuries or other reasons than typical NFL players. Most long-term contracts in the league aren’t fully guaranteed, unlike in baseball.
A payout in the $15 million range for Steinberg’s firm appears likely, as a result of the record-setting contract.
In general, NFL agents get about 3% of a football player’s earnings, and typically command somewhere between 10% and 20% of a player’s endorsement contracts, according to trade industry data.
The value of Mahomes’ endorsement contracts has not been disclosed. In addition to an exclusive deal with Foothill Ranch-based sunglass maker Oakley, Mahomes counts deals with State Farm, Adidas, and Procter & Gamble. A report in Bloomberg recently estimated those deals could be worth $7 million annually on a cumulative basis, if not more.
Not too many other agents know more about quarterback contracts than Steinberg, who got his start in the business in 1975 with Steve Bartkowski, a college friend at University of California-Berkeley, that he helped turn into the No. 1 overall pick of the Atlanta Falcons.
His client list has included a host of franchise quarterbacks like the Dallas Cowboys Troy Aikman and San Francisco 49ers Steve Young.
New additions to his agency’s roster include former Alabama star quarterback Tua Tagovailoa, who was selected No. 5 in this year’s draft by the Miami Dolphins.
