Ron Burkle’s Yucaipa Companies has taken a significant equity stake in Steinberg Sports and Entertainment, the athlete representation and marketing firm headed by superagents Leigh Steinberg and Chris Cabott. Variety was first to report the news.
Steinberg Sports intends to use the resources from Yucaipa to expand the scope of its content production activity as well as its marketing operations and business development initiatives. The goal is for Steinberg Sports to tap into Yucaipa’s network of companies to fuel additional growth. Leigh Steinberg and Cabott will remain chairman and CEO, respectively, of Steinberg Sports.
Burkle will join Steinberg Sports as a partner. He has bought out the stakes of the private equity shareholders who helped Steinberg relaunch the business about 10 years ago. At present the primary owners of Steinberg Sports and Entertainment are Steinberg, Cabott and Burkle.
Yucaipa in recent years has set investment partnerships with entertainment-related firms including touring powerhouse Artists Group International, Rick Yorn’s LBI Entertainment, U.K.’s Independent Talent Group and the Los Angeles-based sports representation and marketing firm Independent Sports and Entertainment. Yucaipa also owns a majority stake in the entertainment-friendly Soho House group of private clubs.
Yucaipa also provided debt financing last year to Hollywood talent agency APA.
The connection to Burkle’s many companies will allow the Steinberg agency, founded by the legendary sports rep who inspired the 1996 Tom Cruise drama Jerry Maguire, to capitalize on the explosion of demand for sports-related content. The agency aims to work with clients on their own off-field pursuits, whether on endorsement deals or investing in startups.
“The worlds of business, politics, entertainment and sports are all coalescing,” Steinberg told Variety. “The concept here is we can have a sports studio that produces sports-themed television, motion pictures and documentaries. We can do high-level marketing with greater scope and scale. The alliance with Ron allows us the reach to do better and more exciting projects for them.”
Yucaipa’s pact with Steinberg reflects the flurry of activity among private equity investors to dive into the entertainment arena at a time of massive realignment across TV, film, music and digital. To cite but one notable effort, former Disney executives Kevin Mayer and Tom Staggs have teamed with $2 billion in backing from Blackstone to roll up smaller content and related firms into a larger operating company.
Steinberg Sports made headlines last year when Cabott negotiated a record-setting $450 million, 10-year contract extension for Kansas City Chiefs’ red-hot quarterback Patrick Mahomes. The company has about 16 full-time employees about 50 clients in football. With the Yucaipa partnership, Steinberg aims to expand into other sports but it will still maintain its boutique approach, Cabott said.
“We are going to have greater reach across industries but still maintain that intimate level of attention with our clients,” Cabott told Variety. Cabott signed on with Steinberg Sports in 2013. He was named president in 2019 and upped to CEO last year.
Steinberg said he was impressed by Burkle’s track record as a philanthropist in Los Angeles and other communities. He also intends to keep pursuing his own “special projects” that are important to the firm, such as being a leading voice in the effort to better protect football players from sustaining concussions on the gridiron.
“We’ve been very involved in the fight against concussions,” Steinberg said. “We can help with new projects whether it’s a new app or a new helmet. We can be involved in what we call ‘special projects’ that can have an impact on sports but also reach out to the larger market.”
Steinberg’s deal with Yucaipa also seals a comeback for the agent who saw his life and business torn apart in the mid- to late 2000s by a series of personal tragedies. He has been in recovery for alcohol abuse for more than a decade. After managing his addiction and regaining his prominence as a sports agent, Steinberg has also been fielding offers to tell his own story in narrative form. Or as he put it, “There’s a chance for me to tap into my own brand.”