International Management Group

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International Management Group

One Erieview Plaza, Suite 1300
Cleveland, Ohio 44114
U.S.A.
(216) 522-1200
Fax: (216) 522-1145
Web site: http://www.imgworld.com

Private Company
Incorporated:
1960
Employees: 1,500
Sales: $1 billion (1995 est.)
SICs: 7941 Professional Sports Clubs & Promoters; 7812 Motion Picture & Video Tape Production; 6794 Patent Owners & Leasors; 8742 Management Consulting Services

Headquartered in Cleveland, Ohio, International Management Group is the worlds largest and most influential sports marketing agency, ranking among Forbes magazines top 200 private companies in the mid-1990s. From its roots as a one-man-show representing professional golfers, International Management Group (IMG) has expanded its scope to include athletes in virtually every professional sport, including team sports. Well-known athletes in the IMG stable include footballs Joe Montana, hockeys Wayne Gretzky, skier Alberto Tomba, and tennis player Andre Agassi. The company has not limited itself to the realm of sports, however; it also represents entertainers like Itzhak Perlman and fashion models like Niki Taylor and Lauren Hutton. The company has even managed a papal tour. IMG has a hand in an average of six events each day, ranging from athletic contests to arts and entertainment festivals. It also produces television programming through subsidiary Trans World International. With offices in 26 countries worldwide, IMG is geographically diverse. In fact, Asia was considered the firms key area of expansion in the waning years of the 20th century.

Sports Illustrateds E. M. Swift characterized IMG as quite simply, the most powerful, farsighted, far-reaching (some would say grabby) corporation in the world of sport in a thorough treatment of the subject published in 1990. Its founder, chairman, and chief executive officer, Mark Hume McCormack, has been hailed as The Most Powerful Man in Sports by Sports Illustrated (1990), King of the Courts by Tennis magazine (1995), The Most Powerful Man in Golf by Golf Digest, and one of the London Sunday Times most influential people of the 20th century. In a profile naming him the tenth most important sports figure of the postwar era, Sports Illustrateds Swift asserted, Virtually everything being done today in the management and corporate sponsorship of athletic events, in merchandise licensing and in made-for-TV sports started with McCormack. Without a doubt, McCormack represented the essence not only of the company, which he continued to own outright through the late 1990s, but also of the sports marketing industry.

Origins in the 1960s

Born in the early 1930s and raised in Chicago, McCormack first became involved in sports as a teen. Since a childhood head injury prevented him from participating in contact sports, he took up golf. McCormack went on to become an accomplished amateur golfer, earning top regional honors and leading the team at the College of William and Mary. Notwithstanding his early success, McCormack eschewed professional golf for Yale Law School, eventually joining the Cleveland law firm of Arter & Hadden. But he by no means abandoned the sport; in his spare time, McCormack arranged paid exhibition outings for the professional golfers with whom he maintained contact. Key among these was Arnold Palmer, a former competitor from college days.

As McCormack told the story to People Weeklys Jack Friedman, in 1960 Arnold Palmer asked his attorney friend to take charge of his financial interests so that Palmer could focus on refining his golf game. McCormack did far more than just accounting and reviewing contracts; the attorney-turned-agent was convinced that sports was an ideal marketing vehiclehigh in visibility, positive in image and international in scope. Confident that businesses of all sizes and types would pay handsomely for the opportunity to affiliate themselves with professional athletes, McCormack set out to make his idea pay.

He arranged appearances, endorsements, and licensing of Palmers name and image. Within just two short years, the pro golfers annual income increased from $60,000 to more than half a million dollars. McCormack retained 25 percent of those earnings as his fee. Palmers success soon drew golfers Gary Player and Jack Nicklaus into the fold, and the attorney found himself representing the golf worlds Big Three. (Nicklaus would later quit IMG.) Palmer was the agents biggest individual success; over the course of his career, his appearance and endorsement income would far exceed his golf winnings. In fact, Arnold Palmer would for the next 30 years garner more endorsement income than any other professional athlete. He was unseated from that throne by pro basketballs Michael Jordan in 1991.

McCormacks move into sports management was excellently timed. He created the industry just as Palmers career, televised sports, and commercial air transportation were beginning to take off, literally and figuratively. Palmers unquestionable talent provided a quality foundation upon which McCormack built a marketable image. Television supplied the venue and drew the all-important advertising dollars, and airlines enabled the agent and his clients to arrange and travel to high-paying events around the world.

But it obviously took more than timing to build a multimillion-dollar sports management agency. McCormack also had an innate business sense and was not adverse to hard work. Hes been called the absolute personification of the aggressive, hard-driving American, and a look at the sexagenarians exhausting routine illustrated that assertion. During the work week, he woke at 4:30 a.m., devoting two hours in the morning to phone and written correspondence. Each day was tightly scheduled, dictating letters and making overseas phone calls from 5:00 a.m. to 7:00 a.m. on weekdays and then proceeding in half-hour periods, even scheduling breaks and sleep down to the minute and racking up hundreds of thousands of air miles in the process. In addition to running a multimillion dollar operation, McCormack (who, incidentally, had no formal business training) authored two bestselling management guides and a periodical newsletter.

Diversification Begins in the Late 1960s

McCormack began to diversify into new sports and concurrently take his business international when he contracted with South African golfer Gary Player. The pace of globalization began to quicken in the late 1960s, when he signed British golfer Tony Jacklin; Olympic gold medalist Jean-Claude Killy, a French skier; and Scottish race car driver Jackie Stewart. McCormack used big-name international sports figures such as these to insinuate IMG into new markets, and then established international offices staffed with nationals who could recognize and take advantage of country-specific trends.

By the late 1980s, IMG had expanded into several sports and entertainment fields, including classical and operatic music, figure skating, and gymnastics. But its most important area of expertise, next to golf, of course, was tennis. By the end of the decade, the firm represented one-third of the sports top 30 male players, including Ivan Lendl, Andre Agassi, and Mats Wilander, as well as four of the top ten women, making players like Arantxa Sanchez Vicario and Martina Navratilova household names in the process. IMG expanded its relatively small presence in the field of team sports through the acquisition of top agencies like Reich, Landman and Berry, a baseball players agency acquired in 1987; National Basketball Association agent Larry Fleisher; and National Football League representative Ralph Cindrich in 1988. By 1990, IMG managed the careers of 25 professional basketball players, 40 pro football players, 75 Major Leaguers, and three National Hockey Leaguers.

McCormack did not limit himself to representing individual celebrities, however. In 1968 IMG inked a contract with the organizers of the Wimbledon tennis tournament to coordinate television and video licensing. In the ensuing years, IMG affiliated itself with golfs U.S. and British Opens and the European PGA Tour, as well as tenniss U.S., Australian, and Italian Opens. McCormack did for these competitions what he had done for their competitors: increased income. For example, the Royal and Ancient Golf Club of St. Andrewss British Open had been earning about $100,000 in annual licensing fees from U.S. broadcast television networks in the mid-1970s. After the organization signed with IMG in 1977, McCormack negotiated a new, $1 million agreement for television rights. The super-agent also began advising companies on appropriate events and athletes to sponsor, linking multinational food conglomerate Nestle with the PGA Tour and Federal Express with college footballs Orange Bowl, for example.

Company Perspectives:

IMG literally invented sports management and marketing more than three decades ago. Today the company is the global leader in the field. From this foundation, our expertise and resources have enabled IMG to become a major force in other entertainment and lifestyle activities. The current diversity, of our endeavors reflects the measure of our success. IMG now represents athletes, performing artists, writers, fashion models, broadcasters, leading corporations, world-class events, cultural institutions and recreational resorts. All share with IMG one defining characteristic: a mission to excel. We are dedicated to applying our proven talent for business, our personal resources and our worldwide network to create advantages for our clients and customers.

In 1967 McCormack organized a television production company, Trans World International (TWI), to film his companys growing stable of sporting events and produce them for distribution on broadcast television, cable TV, and video. The production divisions hallmark was its Trans World Sports show, which featured sports news and highlights from around the globe and was dubbed into more than a dozen languages for broadcast in 60-plus countries. By the mid-1990s, this operation was producing thousands of hours of original programming. TWI eventually became IMGs largest division, generating more than one-third of the corporations annual revenues by 1996. By that time, it ranked as the most prolific originator of sports programming outside of the major broadcast television networks.

Event Management Highlights the 1980s

IMG also began to develop its own celebrity athlete showcases independent of the events sanctioned by professional sports associations. The Skins Game is a prime example of this concept. Inaugurated in 1983, this annual made-for-television golf invitational features four of the years top players in a hole-by-hole shoot-out. The winner of each of the first six holes won $10,000, $20,000 apiece for each of the next six holes, and $30,000 for each of the last six holes. Participants in what Sports Illustrated s John Garrity called televisions richest game show donated 20 percent of their earnings to charity. It was a win-win situation for all: players won cash (or at least received some publicity), sponsors got hours of air time, and IMG banked 25 percent of the whole.

Although contrived competitions like the Skins Game were an unquestionable success (William Symonds of Business Week dubbed it the hottest game in golf in 1988) the Skins Game was not without critics. Jack Craig of The Sporting News was particularly biting, saying that the success of the Skins Game is a tribute to greed in a December 1986 column. In 1993, Sports Illustrated characterized the so-called competition as the most objectionable of golfs trashsport events.

McCormack even wielded influence over amateur sports. For example, he was a leading proponent of the movement to extend the Olympic Games over three weekends to garner more television viewers and generate increased licensing fees. But even as he appealed to the highest achievements of athletes and aspirations of sports fans, he also catered to its lowest common denominator with the creation of televised trashsport programs like The Superstars, The Battle of the Network Stars, and American Gladiators.

Diversifications soon made IMG a vertically integrated sports management behemoth. At a single event, it was not unusual for the company to represent the sponsors, negotiate appearance fees for the key participants, organize the competition itself, and film it for distribution on broadcast television and video. IMGs all-encompassing influence inevitably inspired criticism from some sports journalists and competing agencies, who felt that the companys overlapping interestsnot to mention its virtual monopoly on the top players in several professional sportsmade it most effective at representing its own interests, sometimes to the detriment of its clients. Predictably, McCormack disagreed, asserting that he was just trying to give all of his clients more bang for the buck.

In 1990, McCormack told Sports Illustrated s Swift, An Olympic athlete running in a Hertz uniform is a generation away. Unabashedly capitalistic statements such as this drew criticism that IMG-style promotion impugned the integrity of sport, but that was a question best debated by athletic ethicists. As a business, IMG was an undeniable success. Revenues increased from $25 million in 1970 to an estimated $320 million in 1985 and more than $700 million by 1990, creating a rampaging growth record of which even Mark McCormack was wary.

The 1990s and Beyond

Although IMG had been on the international scene virtually since its inception, multinational activities were at the core of the firms growth plans in the 1990s. In Swifts 1990 Sports Illustrated article, McCormack predicted: Southeast Asia is going to be the growth area for all sports. South America, the decade after that. And Africa the decade after that. IMG acted accordingly. In the early 1990s, it undertook golf course design and development, concentrating especially on Europe and Asia. IMG often kept an equity position in the course, adding yet another layer of influence to its already thorough grip on the sport.

The agency was soon managing Indian cricket tournaments and Indonesian badminton. In 1993, IMG played a role in the creation of official soccer and basketball leagues in China, acquiring majority stakes in two of the basketball teams in 1996. In an interview with The (Cleveland) Plain Dealers Terrence Johnson, IMG Senior Executive Vice-President Robert Kain said, The potential is absolutely breathtaking.

Given its indisputable dominance of the sports management industry, perhaps the biggest question facing IMG was its post-Mark McCormack fate. Although the founder and CEO, older than 65 years of age, has vowed never to sell the company to the public, he has reportedly discussed possible buyout plans with Nikes Philip Knight and media moguls Rupert Murdoch and Kerry Packer. And while McCormack continued to exercise a great deal of control over IMG, he had by 1996 delegated most of the routine operations to senior managers. As a result, some analysts considered a management buyout a strong possibility. Of course, McCormack could also transfer the business to the three children who were involved in the business, including sons Breck, 32, and Todd, 29, who guided the increasingly important Hong Kong operations and daughter Leslie, 24, of the Paris office. In his seminal article of 1990, E. M. Swift of Sports Illustrated quoted McCormack saying, I have a lot of intricate plans about what happens to the company when I die. I think Ive got a plan that would keep the key people in place after Im gone, but no one will know what that plan is until something does happen. By the mid-1990s, that something had not yet come to pass.

Principal Subsidiaries

David Leadbetter Golf Academy (United States and Austria); Evert Enterprises/IMG; Nick Bollettieri Tennis Academy; Gary Player Enterprises; IMG Resort Services.

Principal Divisions

Client Management; Event Management; Corporate Marketing; Televisions and Film Production; Financial Management.

Further Reading

Braham, James, From Tee to Green ($), Mark McCormack Shares His Street Smarts, Industry Week, November 12, 1984, pp. 3031.

Closed Game, Sports Illustrated, December 6, 1993, p. 14.

Craig, Jack, Success of Skins Game Is a Tribute to Greed, Sporting News, December 15, 1986, p. 8.

Friedman, Jack, Dealsman Mark McCormack Has Some Business Advice They Dont Offer at Harvard, People Weekly, October 8, 1984, pp. 119121.

Garrity, John, Cash Cow, Sports Illustrated, December 9, 1991, pp. 4649.

Johnson, Terrence L., Playing for Gold, Cleveland Plain Dealer, October 1, 1996, pp. 1C, 2C.

Keeton, Ann, Sports Marketing: McCormack Scores Big, Daily News Record, November 11, 1985, p. 25.

Schmuckler, Eric, Still the One, Brandweek, March 11, 1996, pp. 2829.

Swift, E.M., Forty for the Ages: No. 10, Mark McCormack, Sports Illustrated, September 19, 1994, pp. 7273.

, The Most Powerful Man in Sports, Sports Illustrated, May 21, 1990, pp. 98111.

Symonds, William, Masters Shmasters, Business Week, November 21, 1988, p. 68.

April Dougal Gasbarre

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