UPDATED AND EXPANDED: My latest lalogo.gif column is headlined Oh Shit! The Vultures Are Circling: CAA Picks Off Steinberg’s Prime NFL Meat.

EXCLUSIVE: I’ve just learned that USC megastar quarterback Matt Leinart sent a termination letter late last night to his renown sports agent, Newport Beach’s Leigh Steinberg who just signed him in January. Steinberg confirmed this to me today. This is huge news considering that the NFL draft is on April 29, and Leinart is expected to be the No. 2 pick behind USC running back Reggie Bush. (Both are Heisman Trophy winners.) But what makes this an even bigger story is that sources tell me that Leinart is expected to soon sign for his multimillion dollar football contract negotiations with CAA, a first for the Hollywood talent agency in this arena. The agency has daily contact with the sports celeb because it already represents him for marketing deals like off-the-field endorsements, licensing, autograph shows, public appearances and charity work.

Leinart signed with CAA a week before signing with Steinberg in January; at the time, a CAA spokesman told Advertising Age that the agency was not about to open a sports division. But on April 5th, CAA hired IMG football agent powerhouse Tom Condon as well as IMG football rep Ken Kremer. (Yesterday, CAA also signed IMG baseball agent Casey Close, who reps Derek Jeter.) I’m told that, interestingly, Leinert had earlier met with Condon at IMG and rejected him in favor of Steinberg. Steinberg is best known for having repped the first pick in the NFL draft eight times and specializing in QBs (Steve Young, Warren Moon and Troy Aikman, Ben Roethlisberger and Mark Brunell have been or are clients). Condon, who reps QBs Peyton and Eli Manning, has repped the first draft pick the past two years running (Eli Manning in 2004 and Alex Smith in 2005). “But this year, he got nobody. He lost the competition for Matt Leinart first time around,” an insider told me. I’m told CAA’s first move with Condon, one of IMG founder Mark McCormack’s business-is-war acolytes, aboard was to take Leinart away from Steinberg even though there was no discord in the agent-client relationship. But this does mean war now between CAA and other sports agents since the Hollywood agency is hellbent on going after superstar athletes’ sports contract business, no longer content to just market sports stars. But it’s a reminder of CAA’s cunning legacy under Michael Ovitz, who said he wasn’t going into the advertising business when he signed Coca Cola to a consultancy contract but then started making commercials for the soft drink giant.

Officially, CAA can not comment one way or another whether they have Leinart in the fold already. Under league rules, Leinart’s termination letter sets in motion the five-day rule, meaning that for the next five days Steinberg (left) is still legally the QB’s sports agent. (Leinart also filed the necessary paperwork with the players’ union yesterday.) Of course, the rules also state that, while Steinberg had this client, no other sports agents were supposed to be talking to Leinart. And, as things stand now, no agent is supposed to contact Leinart until the five days have expired. So then how come sources are telling me that Leinart is about to switch to CAA for sports repping? “You have to make the assumption that they went to him the minute they got Condon. But how do you make the tampering case against CAA here?” one source told me. “They do it in Hollywood. They’re not supposed to do it in football. It’s totally against the guidelines. It’s totally illegal to talk to someone who’s represented about switching. The point is rarely is a case like this brought. How do you prove it?”

I’m told the phrase “sons of bitches” to describe CAA was floating around Steinberg’s office after receiving Leinart’s letter of termination. Ironically, USC offensive tackle Winston Justice fired Steinberg late last week because he felt Steinberg focused all his time on his other Trojan client, I hear. With his heartthrob good looks and impressive athleticism, Leinart is expected to become a twofer cash cow both in his football contract and his endorsement potential. That’s incentive enough for CAA to steamroll over anything and anyone to get Leinart as a full-service client. Steinberg’s the first road kill.