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SBJ/June 9 - 15, 2003/This Weeks Issue
IMG, Creative Artists forge new partnership
Published June 9, 2003
Sports agency IMG has formed a strategic alliance with entertainment powerhouse Creative Artists Agency to work together on speaker representation, licensing and corporate consulting.
Bob Kain, co-CEO of IMG, and Richard Lovett, president of CAA, said the alliance is intended to grow business and offer more services to the companies' clients, which include athletes, actors, writers, directors, musicians and major corporations.
"We believe we are offering a unique set of resources, services and expertise to a potential client," Lovett said. "To be able to marry CAA's access and expertise in the entertainment area to IMG's similar skills in the sports area ... is an entirely unique proposition."
The deal will allow CAA's clients to take advantage of IMG's existing speakers bureau serving the lecture industry, as well as IMG Licensing, which bills itself as the world's largest licensing agency. Both companies have corporate consulting divisions and corporate clients.
The deal followed more than a year of discussions between IMG's late founder, Mark McCormack, and Kain and Lovett. Lovett said he had talked with McCormack, whom he regarded as a mentor, for a couple of years. McCormack died May 16.
"We got to know each other and we are friends and as we began to talk and compare notes about our businesses ... we thought it would be fun and benefit our clients on both sides," Lovett said.
The deal is an alliance and not a merger of any kind, and neither IMG nor CAA will receive equity in the other company. The two companies will split profits, and executives of both companies will work together on specific projects, Kain said.
The deal is exclusive, meaning CAA cannot work with another sports agency and IMG cannot work with another entertainment agency in the areas of licensing, speaker representation and corporate consulting, Kain said. There is no term length to the deal, Kain said.
"The speakers bureau is the first step," he said, "and we will see how that will evolve."
Lovett said he doesn't know which clients of CAA's will take advantage of the speakers bureau, since the alliance with IMG was just being announced today. However, he believes that acting, directing, writing and musical clients will likely be interested in speaking engagements.
As far as the licensing agreement, IMG is already doing licensing deals for non-sports properties, Kain said. As an example of a potential licensing deal, CAA could have a "beautiful client" and IMG could come up with licensing for a line of perfume or cosmetics, Kain said.
Kain noted that many worldwide companies that want to reach consumers through sports want to consult with firms that have inside information about the sports world. Likewise, companies that want to use entertainment to market their products, want to consult with industry leaders.
"Most worldwide companies, they want that [inside knowledge] in sports and entertainment and we will never do that in entertainment the way that CAA can," Kain said. "If some companies want both, why not walk in together instead of separately?"
The deal also comes after IMG executives thought long and hard about how best to take advantage of what has been called the convergence of sports and entertainment, Kain said. A lot has been written about how well the sports and entertainment worlds fit and work together.
"In the primary business, I think that is kind of bogus," said Kain, "but in the ancillary business, that is pretty spot on."
That is why the IMG-CAA alliance will focus on particular areas, such as licensing, and not the main business of representing sports and entertainment clients, he said.
"In the management of entertainers, it would take us years to get the knowledge and build the relationships to do what CAA does," Kain said. "Tom Cruise is never going to let Bob Kain manage him and Pete Sampras is not going to have Richard Lovett manage him."
For more on IMG and Creative Artists Agency, click here.