Editor’s Note: Newport Beach resident Jeff Moorad has climbed to the top of the world’s sports industry, from being an agent representing top NFL and MLB players to ownership in the Arizona Diamondbacks, San Diego Padres and McLaren Racing, which last year won the F1 Constructors Championship. Jeff serves as CEO of MSP Sports Capital, an investment management company he co-founded in 2013 with sports industry legend Peter Ueberroth and currently runs with long-time NBA owner Jahm Najafi.
I often get asked: What is the secret to negotiating? Before I explain, first let me tell you about the background for my answer.
I grew up in Modesto where my dad was an executive with E. & J. Gallo Winery and our family focused on sports. My dad, who played college football at the University of Illinois, was actively involved in the community where he co-founded the Sportsmen of Stanislaus Club. It’d host an annual event that brought in famous athletes like Stan Musial, Mickey Mantle and Muhammad Ali. I met Willie Mays and years later, I helped him negotiate several memorabilia deals. I grew up with a love for sports.
My grades weren’t good enough to attend UCLA because I was a slow starter, so I went to Modesto Junior College where I became student body president and then transferred to UCLA my junior year. My claim to college sports fame was I played intramural basketball at UCLA’s Pauley Pavilion. When I was a student at UCLA, I visited a friend who attended UCI and at the time lived on Balboa Island. One night as I drove across the bridge onto the island, I thought, “One day I’m going to live here.”
I went to law school at Villanova University where my classmates would ask me what I’d do after graduation. I told them I planned to do sports, and they’d say, what does that mean? I didn’t really know what it meant. I did know the sports industry wasn’t very sophisticated at that time and it seemed to represent a perfect blend of interests to me.
During law school, I interned for two summers at Irvine Company’s legal department. After graduation, I worked for a Los Angeles-based litigation firm in its Newport Beach office, where I concluded I wasn’t cut out to bill hours.
The Sports Entry
I spent every opportunity I could find meeting people in the sports industry and began representing athletes on my own. My first client was Calvin Jones, who was the No. 1 pick in the January1984 baseball draft. I met his parents, his high school principal, his coach and multiple friends who were advisers.
It was a long process and my theme was, “Look, I’m not the most experienced guy, but you’re never going to find anybody that’ll work harder for you and be more focused on what’s best for you at the end of the day.”
Calvin made it to the big leagues as a part of the Seattle Mariners, where he became a favorite of George Argyros, who owned the team at that time. Argyros actually gave Calvin a job working in the winter for AirCal, which George also owned at that time. Calvin then went on to become a Los Angeles Dodgers scout who’s known for signing Clayton Kershaw; Calvin recently succumbed to cancer.
In the 1984 Summer Olympics, I represented five of the 20 players on the USA baseball team, including Will Clark, who went on to become a star for the San Francisco Giants. My approach was, besides maximizing earnings for the players, to develop a real relationship with the client.
In the 1980’s, I met Leigh Steinberg, who asked if I’d be interested in working with him. I initially turned him down because I felt I was too independent. Later, I realized the $5,000 per year I was making was a bit light, and we came together when a partner left, and Leigh asked me to handle contract negotiations. We represented four of the top 12 picks in the 1985 NFL draft. That was the beginning of an 18-year relationship with Leigh and the agency Steinberg & Moorad. Leigh, of course, became famous for being the role model for the movie “Jerry Maguire,” where we served as technical consultants in addition to both being in the movie.
After we sold three businesses in 1999, including our core business, for the first time in my career, I had some capital gains dollars in my pocket, and I began to dream. I became a general partner and CEO in the ownership group for the Arizona Diamondbacks. It was a little bumpy because some other owners were afraid that I’d reveal “trade secrets” to the players. I told them that there were no secrets, only players asking for “more.” I knew the agents on the other side of the table and respected what they did, probably more than most executives.
My experience as an agent and knowledge of the industry were helpful dynamics in becoming an executive. I’ve been fortunate to maintain great relationships with several athletes that I worked with over the years. My closest friends from that era are Will Clark, Steve Young from the San Francisco 49ers and Eric Karros and Shawn Green from the Dodgers.
When I arrived at the Diamondbacks in 2004, the team was on its way to the worst record in baseball, losing 111 games, a $105 million payroll and $95 million in losses. Three years later, we were the best team in the National League, and we won the NL West with a $50 million payroll.
While I didn’t attend business school, I learned that what is most important in business is hiring the right people and letting them do their jobs.
Then I headed a group that bought the San Diego Padres group, where I felt more comfortable with complete control of team personnel. We changed 18 of the 30-member leadership team within the first 60 days. After we successfully sold the Padres for $800 million, my firm MSP led a group that bought a stake in McLaren Racing. It’s been a wonderful ride that was highlighted last year by winning the Formula 1 world championship; fingers crossed that the success continues this season.
Now, MSP is building a league structure for the X Games, where we’re crafting a global platform modeled after Formula 1. We’re selling 10 teams for winter sports and 10 for summer sports. We’ve been overwhelmed with recent interest through Moelis & Co., our bankers.
A lot of talk is whether sports teams are overpriced. The Boston Celtics sold earlier this year for $6 billion and were topped by the Los Angeles Lakers sale of $10 billion.
It’s key to remember that the teams are priced based on scarcity, which drives the valuations.
Except for breaking news, sports is the only content that you must watch live. When our friend Rob Walton bought the Denver Broncos for $4.65 billion, he was worried that it was a lot of money. I told him that I believed his investment would be worth 2x to 3x in 10 years, and I may be low.
The Secret Sauce Revealed
Many young people want to work in the sports industry because they like the profile and look up to the famous athletes. My advice to them if they want a job in sports: Don’t think like a fan. If your premise is what a big fan you are, you’ll likely lose the room. People in the industry want to know your problem-solving abilities and not that you’ve been watching a particular team or sport all your life.
About the secret to winning negotiations?
One word: Listen.
If you can keep your mouth shut and resist the natural human tendency to fill the silence, it’s amazing what people will tell you. They’ll often tell you things that are against their own financial interests. If you have a strong point of view, a command of the relevant facts and figures and an ability to listen, it’s not overly complicated. I’ve found that remaining quiet and being a good listener is a powerful skill when it comes to negotiations.
Btw, life’s good! My dream of living on Balboa Island came true.
