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SBD/May 26, 2011/Labor and AgentsPrint All
IMG Chair & CEO Ted Forstmann "wants to complete one last corporate turnaround as the grand finale of his storied career," and he is "focused on the transformation" of IMG, according to Andrew Ross Sorkin of the N.Y. TIMES. Forstmann, now 71 and battling brain cancer, bought IMG in '04 for $750M, and he "considers it unfinished business." He said, "What I want to do is build IMG, and I’d like to do it quicker than I was going to. ... I want to make a bunch of money now, stick it in a charitable trust and give it away." Forstmann said he acquired IMG to "make a bunch of money, get it out of this thing and spend it on kids in the world." He noted that he is "still haunted by articles that said he acquired IMG to simply fraternize 'with the golfers or the models or whatever it is.'" When he bought IMG, he was "roundly criticized for overpaying for the trophy business, a point he now says was true." Forstmann: “I hugely overpaid for it." But Sorkin noted over the last six years, Forstmann "has transformed the company from a traditional talent agency to a global media entertainment and licensing business." IMG, which was "barely break-even when he bought it," made $110M last year, and is expected to earn $140M in '11 and $200M "within the next two years." Despite undergoing treatment for cancer, Forstmann "doesn’t seem ready" to sell his stake in IMG. He "doesn’t know how much time he has to live," but said that he still goes into the office because "he still has work to do." Forstmann: "This is not how I want to end. It's a bend in the road for me. It’s kind of arrogant to put it that way, but that’s the way I want it to be" (NYTIMES.com, 5/23).
BEHIND STEINBERG'S EXIT: Forstmann met with recently departed IMG Global Golf Division Head Mark Steinberg late afternoon Tuesday in Forstmann’s office at IMG for 30 minutes, several hours before the company issued a press release announcing the re-organization of the division, sources said. The purpose of the meeting was to discuss Steinberg’s future at the company, sources said. Steinberg had signed a two-and-a-half-year deal to remain at IMG in late ‘08, but that deal was set to expire on June 30. Under the terms of that deal, Steinberg could not speak to any new potential employers or business partners until June 1. Forstmann and Steinberg, who do not have a close relationship, were the only two people in the meeting and the door was closed, a source said. The meeting was business-like, said the source. “There was no ugliness, no screaming,” this source said. Several hours after the meeting, IMG issued a release naming Guy Kinnings and Robbie Henchman the new co-heads of IMG Golf. Steinberg yesterday responded to text messages seeking comment about his situation, but he declined to comment at this time (Liz Mullen, SportsBusiness Journal).
Mark Steinberg had been responsible for all of IMG's golf business, but he recently "had become too 'Tiger-centric,' his responsibilities toward the former No. 1-ranked player surpassing his role as head of the division," according to sources cited by Jason Sobel of THEGOLFCHANNEL.com. Steinberg was the "decision maker … in every facet of the business" for IMG before he left the agency Tuesday. Whether Tiger Woods follows Steinberg and leaves IMG "is the main topic of interest in the short term," but there will be "bigger and perhaps more important effects of Tuesday’s news in the long run." Sobel wrote with "so much influence and power within the game, it will be worth watching how IMG continues to handle its current global business strategies." IMG employees contend that while there "will be an 'adjustment period,' they should be able to keep the status quo for now." But in this "ever-evolving golf landscape, there really is no status quo." Sobel: "The most conspicuous domino that will fall in the wake of Steinberg leaving IMG is that of Woods’ impending future -- whether he decides to remain with his longtime agent or agency" (THEGOLFCHANNEL.com, 5/25). Golf Channel’s Rich Lerner said this is IMG "wanting a fresh start, wanting a clean break." Lerner: "Tiger Woods made a lot of money for IMG. They made a lot of money together. He made some people rich, but also made a mess on the corporate side with this scandal.” IMG’s image "was hurt," and they "have to have understood that" (“Morning Drive,” Golf Channel, 5/26).
WILL TIGER LEAVE IMG? The Guardian’s Lawrence Donegan on his Twitter feed cited “reliable sources” and reported, “Tiger Woods will be leaving his long-time agency IMG and will stay with Mark Steinberg, probably at the CAA agency. … I am told on the grapevine that IMG ‘very relaxed’ about prospect of Tiger Woods leaving” (TWITTER.com, 5/26). Author John Feinstein said there is no way Steinberg “walks away from his job at IMG if he doesn’t know Tiger Woods is following him right through that door.” Feinstein: “Mark Steinberg without Tiger Woods is like Laurel without Hardy.” Steinberg “needs Tiger Woods in order to be viable in the business” (“Morning Drive,” Golf Channel, 5/26). YAHOO SPORTS' Shane Bacon wrote Woods "will most likely follow Steinberg wherever he goes, because there wasn't anything wrong with that relationship, and if Tiger could ever find a way to be productive again on the golf course, the sponsors would return and make the job of whoever Tiger's agent is a lot easier” (SPORTS.YAHOO.com, 5/25).