"Energetic physical sports aren't a luxury or a way to blow off steam, but they're absolutely the only way to confer grace on the human presence. And that grace translates into power and money later on."
Gatto is actually talking here about physical grace-- the idea that physical activities confer a commanding presence on those who can do those things well. Certainly true, but I'd take it a step further. That is, I'd argue that sports are the fastest way to achieve spiritual grace as well.
Now, since we're talking elite private schools, we're essentially talking about rowing. The average rowing team is thirty kids, eight of whom will make the first 8+. Every day of high school was a constant struggle trying to figure out how I could become faster than the other guys on my team. After all, I wanted to be in the first boat.
The problem is that even if you're in the first boat, it doesn't mean your boat is any good. The only way to win in competition is to help make the other guys as fast as possible. Which of course makes it vastly more likely that you yourself will lose your seat in the boat.
That, I think, is where the spiritual grace comes in. It's one thing to help others when you have nothing to gain. It's a whole other thing to help others when it actively hurts you. Learning to do this without feeling conflicted, in fact without even thinking about it... If that's not a working definition, I don't know what is.