SBJ/September 28 - October 4, 1998/No Topic Name
Industry giant IMG's secret? It got there first
Published September 28, 1998
Of all the sports marketing companies with alphabet soup names in business today, no other letters speak louder than IMG.
Here's how dominant the Cleveland-based powerhouse, formed in the early 1960s by Mark McCormack, has become: As well-funded public companies have devoured most of its competitors, IMG has remained steadfast in its independence. And don't think IMG hasn't been approached. Insiders said that even Nike Inc. chief executive Phil Knight has made overtures.
But when your company has 2,000 employees working in 77 offices in 38 countries generating estimated annual billings of more than $1 billion, it's easy to see why McCormack has turned away all comers.
IMG's client list is so star-studded that tennis star Pete Sampras, who with his next Grand Slam title will tie the record for most ever, doesn't show up in the company slick brochure until page 21.
But on page 1 are two golfers who provide the company's full spectrum.
There's Arnold Palmer, the first client McCormack landed in the sports marketing industry. Then there's Tiger Woods, IMG's current supernova, who alone generates millions in revenue for the company.
The two bridge the gap between the past and the present, all created through McCormack's uncanny knack to stay ahead of the industry curve. Then again, he is the guy who invented the industry, so it's little surprise that the 67-year-old McCormack has continually outpaced the competition.
McCormack was a lawyer at a Cleveland firm in the early 1960s when he began representing Palmer. From there, McCormack added tennis with Rod Laver, skiing and winter sports with Jean-Claude Killy, and auto racing with Jackie Stewart. Now, IMG says it is involved in an average of eight major events each day of the year, while its television company, called Trans World International, sold more than 4,000 hours of programming in 1997. Last year, the company filed tax returns for 571 individual clients and 92 corporate clients. Its legal department handles more than 4,000 contracts annually.
"[McCormack] had the vision before anybody else," said IMG senior vice president Gary Swain, who represents John McEnroe. "He founded the company and the industry on the premise that athletes would someday command big dollars like artists and entertainers."
But success brings criticism. IMG carries a reputation of being arrogant and overly aggressive. And the company has lost its fair share of major stars. Greg Norman, Nick Faldo and Nick Price have bolted IMG to handle their own deals.
Yet, it's the global market where IMG has dominated, mainly because McCormack got there first. The company has 22 offices in Europe, and 20 more in Asia and the Pacific Rim, involved in practically all sports, including badminton.
Competitors, however, may be gaining ground.
Consolidation has changed the industry, which used to be made up of smaller, less diversified shops. Now, IMG must do battle against the huge public companies that have bought sports marketing groups, bringing with them extensive capital to grow.
McCormack's track record hints that the company won't suffer anytime soon.
"Our mainstay business is that we are a full-service client management company, but one of our strengths is that we are such a global company," Swain said. "[McCormack] has always focused on creating new business in emerging markets."