The firm, which built its empire representing athletic superstars, hasshifted focus to arenas in which it can wield more control. And that means cutting ties with baseball and football stars.
By ASSOCIATED PRESS
Published September 22, 2006
CLEVELAND - Losing Derek Jeter would be devastating to the New York Yankees.
For IMG, though, cutting ties with the superstar shortstop is a move the sports and entertainment marketing giant says made business sense.
It's one of many changes for the Cleveland company since the death of founder Mark McCormack more than three years ago and its purchase by New York buyout specialist firm Forstmann Little & Co.
IMG's latest transition eliminated its representation of athletes involved in team sports, ending the agency's ties to popular U.S. athletes in baseball, football and hockey. The company that helped create the sports marketing industry is shifting from athlete representation to a broader array of media, consulting and event management.
Its strategy is to focus on global divisions, such as golf and fashion, where it's a dominant player, not only representing star clients but running events and controlling media distribution. For example, in fashion, IMG represents Giselle Bundchen, Kate Moss and Heidi Klum and owns events such as New York Fashion Week. In golf, it represents Tiger Woods and owns the World Match Play Championship.
While IMG lost some star power in its exit from team sports, George Pyne, president of IMG sports and entertainment, said the company has never been in better financial shape.
Private IMG does not release financial results. Hoover's Inc. estimates its 2004 sales at $1-billion.
"I don't think that people know the vast resources of the company," Pyne said. "If they understood what IMG is, they'd have a better understanding of what we're doing."
McCormack's death in 2003 marked a turning point for IMG. Shortly after he died, IMG was cutting jobs and selling real estate to trim a reported $200-million debt. IMG was then sold for $750-million to Theodore Forstmann's group, Forstmann Little.
IMG employs about 2,300 people in 60 offices in 30 countries, generating revenue in areas ranging from client representation, licensing and consulting to television production and golf course design.
While the names in team sports are big, the profits weren't in those sports.
"We chose to exit businesses that represented in total 3 or 4 percent of the company's profit and focus on businesses that had much higher growth potential," Pyne said.
The problem with those businesses was that while IMG can negotiate a deal for a player, it has no control of the league or media rights like it does in golf and tennis, Pyne said.
"The gold rush era for player-agents is largely over," Paul Swangard, director of the Warsaw Sports Marketing Center at the University of Oregon, said. "For a diversified business like IMG, there's better places to put their dollars for better returns."
ABOUT IMG
IMG is known as the sports agent to superstars such as Tiger Woods and Venus Williams, but athlete representation is only part of its business:
IMG Media: Produces 10,000 hours of live sports programming a year. IMG recently acquired two television production companies, Tiger Aspect Productions and Darlow Smithson Productions, which produce documentaries, nonsports entertainment and children's programming.
IMG Sports and Entertainment: Includes client representation in fashion, broadcasting, golf, tennis and other sports. Responsible for event ownership and management in golf, tennis and fashion. Also includes golf course design.
Major businesses within IMG Sports andEntertainment include:
IMG Licensing: IMG has the largest independent licensing firm in the world, responsible for more than $5.6-billion in worldwide sales of licensed merchandise.
IMG Consulting: A 110-employee consulting division helps develop marketing strategies for 45 major brands, including General Electric, Coca-Cola and Johnson & Johnson.
IMG Academies: IMG's 190-acre sports academy in Bradenton, including the outdoor sports dome shown here, has 800 full-time students, and 11,000 athletes attend a year, receiving training in tennis, golf, soccer, baseball, basketball, mental conditioning and sports medicine.
