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Dolan’s background provides a different view of the sports world.
He presents an altogether different picture from IMG founder Mark McCormack’s vision and creativity. He presents a striking contrast from former IMG Chairman Ted Forstmann’s autocracy and attraction to the glamour side of sports. Even at the most senior levels of sports, there are a surprising number of executives who don’t know IMG Chairman and CEO Mike Dolan’s name, since he did not rise through the ranks of sports properties and agencies.
“The question I get asked a lot is, ‘Who is Mike Dolan?’” said Sandy Montag, a senior corporate vice president, who has been with IMG for nearly 27 years. “People in our world don’t know him, but he really doesn’t care that nobody in sports knows who he is.”
Dolan, 65, is a reformed Ph.D. turned MBA, who’s an expert in medieval literature and a man still becoming accustomed to the dress code among sports suits, which generally does not require a tie.
He served as CFO at Forstmann’s IMG since 2010 and was named chairman and CEO just days after Forstmann’s death last November. From all accounts, he couldn’t be more different from his predecessors. In a business fueled by ego, Dolan is described by contemporaries as low-key, even bookish, fitting for a man who was a professor at New York’s City University for two years before deciding that an MBA and business career were preferable to teaching.
Dolan (left) joined Dogus Group Chairman Ferit Sahenk in May at their announcement of a joint venture to develop projects in Turkey.
“This will never be known as the Mike Dolan era, simply because he doesn’t have that sort of profile, nor does he desire it,” said Alastair Johnston, IMG’s vice chairman and its second longest-tenured employee with 40 years of service.
Even company outsiders are impressed, including NBA Deputy Commissioner Adam Silver, who has been negotiating with Dolan about starting a basketball league in India. “He comes across as a man who has a keen sense of the world, which is probably why much of his attention is focused on the global expansion at IMG,” Silver said.
International expansion is one of Dolan’s key initiatives, and offshore revenue at IMG may soon exceed domestic results. While fashioning joint ventures in places like Brazil, China and Turkey, Dolan has logged more than 120,000 miles flying both commercially and on corporate aircraft since he was named CEO.
Dolan is a contrast, an unusual amalgam of marketing and financial acumen, with both the inquisitiveness that’s the hallmark of an academic and a fondness for the structures of corporate governance and finance. Many say that his lack of a sports background helps, since he has no preconceived notions about what fits where in a sports world that can be complicated.
“He is a first-class global businessman, which is refreshing,” Silver said. “As someone who has been in this business for 20 years now, it is the ultimate compliment to this industry that we can attract someone like Mike Dolan.”
For Dolan, it has been about earning respect from his wealth of knowledge about corporate governance and finance, and letting IMG’s wealth of expertise in sports flourish in a company with better fundamentals. While closely guarding the financials of privately held IMG, Dolan said 2011 was the company’s best year yet and 2012 is on track for even better returns.
“Mark and Ted had very strong egos from entirely different perspectives,” said Johnston. “Mark kept score by the number of offices he had and countries he was in and number of employees. He wasn’t particularly enthusiastic about making profit that wasn’t reinvested in the business. Ted brought the capacity to grow by acquisition and the funding for the aggregation of our college assets. At the end of the day, Ted wasn’t a sports marketer. Unless he was buying and selling companies, he wasn’t in his area of expertise. Running a company wasn’t something that he had the best skill set for.”
While the late Ted Forstmann enjoyed a higher profile meeting with clients — here at a dinner with Eli Manning, new IMG CEO Mike Dolan (below) largely goes unnoticed in a crowd, seen here at Wimbledon.
Photo by:SHANA WITTENWYLER
“He found very fertile ground in the back room stuff of IMG and got everyone’s confidence very, very quickly,” said Ian Todd, who has put in 32 years with IMG and is now special adviser to Dolan. “So as opposed to us cynics within sports marketing saying, ‘What’s this guy know?’ here was a guy coming to our area and making this huge and rather immediate impact by running our business better.”
Ben Sutton, who now heads IMG College, got to know Dolan while selling his company, ISP, to IMG in 2010. Like many within the company, Sutton gives Dolan credit for a management style that boils down to “make your numbers, and everything else is OK.”
“Mike’s not a micro manager,” Sutton said. “He’s as accessible as you want and you get good guidance on how to stay between the white lines, but he’s not there telling you how to stay between the yellow lines.”
Bloomberg Sports President Bill Squadron, himself a former IMG executive, found Dolan to be “low-key, yet decisive at the same time,” while negotiating a recent deal between the two companies. “It’s not unusual for people in that kind of position to assume they know everything,” Squadron said.
Former Viacom CEO Tom Freston, who hired Dolan as his CFO in 2005, concurred. “Mike’s got a very under-control ego, which you don’t see a lot of in entertainment and sports,” he said. “But that low-key nature is sort of a head fake. Underneath that is a guy with great smarts and business ambition.”
Despite being hand-picked by Forstmann, contrasts between the two men crop up repeatedly. Forstmann grew up in Greenwich, Conn., and attended top-of-the-line Greenwich Country Day and Phillips Academy. He was the son of Julius Forstmann, a textile magnate, who was once one of America’s wealthiest men. Dolan is a first-generation son of Irish immigrants, born in Queens. He attended Power Memorial High School in New York City. Forstmann owned a jet, courtesy of his buyout of Gulfstream. Dolan walks to work from his home on the Upper East Side and doesn’t own a car. Forstmann’s name was linked romantically to numerous global glamorous women, including Princess Diana. Dolan has been married to the same woman for 40 years.
Some revel in the dissimilarities of Dolan and Forstmann.
“Ted didn’t really understand our industry enough to be beneficial or helpful to clients,” Johnston said. “Mike is not someone who wants to meet all of our sexy clients. He’s a much better manager in the true sense of being a manager than either Mark McCormack or Ted Forstmann. He is leading the team as opposed to dominating the team.”
Still, there are those who maintain that Dolan shares more with Forstmann than is immediately apparent.
“They both have the vision to see how things can come together,” Squadron said.
When you ask people about Dolan’s management style, they’ll tell you that it’s deliberate and without bluster.
Todd quickly dubbed him “the smiling assassin” for the way he makes even the largest decisions quietly and with no emotion.
“Michael is a deceptive duck,” said Y&R Chairman Emeritus Peter Georgescu, who hired Dolan as his “nontraditional CFO” three years before the agency went public. Two years after that, Y&R was purchased by WPP Group for an astounding $4.7 billion. “He’s a no-bull guy who will tell you anything, including that you are full of shit, with the most delightful twinkle in his eye.”
The NBA’s Silver described Dolan as man with “a modest confidence, not a lot of bluffing and puffery. He is direct in terms of what his goals are in a negotiation.”
While McCormack’s skill as a negotiator is celebrated, Dolan gets some high marks from those who have worked with him. And, as you might expect, his boardroom manner is different from previous chairmen.
“He’s so low-key, it can be disarming,” said former Y&R Chairman Tom Bell, recalling the negotiations to sell his agency, during which WPP execs would pose complex arguments disguised as questions that were four or five minutes long, which would be deflected by Dolan with a terse “yes” or “no.”
Shortly after assuming the IMG chairmanship, Dolan made plans to gather some of his top executives at the Danesfield House hotel in London in April. For any other company, particularly one with roots as deep as IMG’s, what was being planned would have been routine. Dolan addressed the group of 50 executives, with equal representation from McCormack’s “legacy IMG” and Forstmann’s company. He reviewed company financials and strategic plans, and, at IMG, that degree of transparency was a revelation.
“He laid out all the numbers and everyone was just blown away,” said Todd. “And now there’s a feeling that there is no hidden agenda and that there’s a common goal.”
Johnston agreed. “The company is a lot more disciplined,” he said. “It’s a lot less driven by the personality of the leadership, whether it was Mark or Ted.”
“He’s very calm, very transparent and it shows at times like that,’’ said Chuck Bennett, president of golf, tennis, fashion, events and federations, and an IMG executive for close to 30 years.
Industry chatter of a private equity sale or IPO of IMG continues to roil throughout the sports and financial world, even as Dolan flatly denies that a deal is close (see related story, Page 32). The party line is that IMG is staying single.
“They’re operating like they are not selling the company,” said Steve Horowitz, a partner at Inner Circle Sports, which advised Bloomberg Sports while it was setting up its recent joint venture with IMG. “Conventional wisdom would tell you they’ve got to be looking for a buyer, but the Bloomberg investment is not something you would do if you were about to sell. They are still building.”
Going forward, whatever Dolan may be lacking as far as knowledge of the intricacies of properties, events, rights and federations, his agency background is serving him well in the clubby world of sports marketing.
“Mike understands clients,” Todd said. “However brilliant and whatever a genius Ted was, he didn’t understand clients.”
“Mike is used to dealing with the egos and the problems that arise when you have a lot of competitive people working for you,” said Barry Frank, IMG executive vice president of media, who has been with the company for 40 years. “Nobody feels threatened.”
Dolan explained his management style as generally laissez-faire: “You can’t tell agency people what to do. You have to persuade them, and then you get out of the way, because they are generally very self-motivated. So I wanted them to hear everything, and I think they left [the London meeting] feeling like partners.”
There are many adages describing the ability of those who work with numbers to obfuscate: “Figures lie and liars figure,” or the equally proverbial: “There are three kinds of lies: Lies. Damned lies. And statistics.” An axiom from Dolan, the English literature Ph.D. who morphed into an MBA, is one the former Y&R Chair Georgescu still counts among his favorites. “Michael always used to say: ‘Profit is opinion, but cash is fact,’ said Georgescu. “I’ve used that line ever since. You can play with definitions of profit, but cash is either there or it is not. That’s definitively Michael.”
Since taking over as CEO of the company in November, Dolan has focused on global reach.
■ The question everyone asks about IMG is, “When is it gonna be sold?”
DOLAN: Not soon, and part of that reason is the trajectory of our growth. This was a 50-year-old company that really had done very, very little in terms of what I would call best business practices. We have put ourselves in a position where it is now a really well-run company, in terms of the quality of earnings, the quality of accounting, the quality of control and governance. So if we were to do something now, you’d be forgoing all of that profit growth and giving it away. So the question becomes, at what point do you monetize the investment made in the company? At some point, the investors, largely pension funds, will want to see some return. The question is, what is the right time?
■ So how will you determine when that right time is?
DOLAN: You look at the profit potential and see where you stand against the large [marketing] conglomerates out there as a proxy for a level of profitability. The other factor is determining what the maturity is of some of our joint venture arrangements. That begins to attract the attention of investors. The big issue is, how do you get money back to investors? There are three ways: You can sell the company outright, which people reflexively think is the answer. The second thing is, you IPO the company, like we did at Y&R. The third thing is you roll out the current investors and bring in new ones. That doesn’t preclude some current investors staying.
The renovation of the Estádio do Maracanã in Brazil is key to that country’s sports growth.
Photo by:GETTY IMAGES
DOLAN: We had a huge number of calls when Teddy was ill. Everyone was thinking that a sale was automatic and that they could buy it cheap. That has really slowed down. There are still a lot of inbound calls, and what we say is, “We are not for sale.” Anyone who claims there are [sale] conversations going on is just blowing smoke. It is just not happening.
■ Have you explored a public offering?
DOLAN: No, it’s too early. Having gone through this with Y&R, and again with Viacom, when we spun off from CBS, there’s an enormous amount of work required to do that, and we are focused now on running the business. Once we make a decision on what to do, I am sure we will turn our resources to that.
■ So you are telling your investor group to wait because of anticipated increased growth and profits? What kind of growth are you projecting?
DOLAN: North of 20 percent a year, and what they say is, “Why would I give up that growth to anybody else?”
DOLAN: Ted hated the word agency. We position ourselves as sports experts. When we talk to people in Brazil or Turkey or India, the proposition is that we will help you build out a sports infrastructure in your country. We have people who understand all the technicalities in whatever sports, league and federation. When I was with Y&R, all the major global agency companies looked the same. There’s really no competitor with IMG’s reach and capability globally. The representation piece is critical to the brand and is still what everyone thinks of when they think of IMG. When you look at our total economics, it is a very small part of the new IMG.
■ How much is IMG College contributing to your bottom line?
DOLAN: Without giving specific numbers, since we are private, I’ll tell you that it is one of our two largest contributors of EBITDA in the company. It has a long way to go in terms of potential. Media is the second largest, though they flip-flop. Both have a lot of upside. The third piece is joint ventures, which report to me: China [with CCTV], India [with Reliance Industries], Turkey [with Dogus Group and CEO Ferit Sahenk] and Brazil [IMX with Eike Batista, chairman of EBX, IMG’s partner]. What you see in all of these fast-growing markets is that as economic activity increases, interest in fashion and sports increases as well.
■ What is your revenue split, foreign versus domestic, and what should it be?
DOLAN: It was 60 percent international before the acquisition of ISP. Now it is more 50/50. The big growth drivers over the next five to seven years will be in these joint ventures. Just take Brazil, for an example. We are now looking at a series of acquisitions there to fold into the joint venture. You’ve got the modernization of Maracanã [the Estádio do Maracanã in Rio] and, concurrently, there are four new Wembleys being built for the World Cup and the Olympics. We are involved in bidding on all four of them. The amount of business available in Brazil is just astounding. We bring a unique expertise to all of these markets. Turkey is the same kind of situation as Brazil. They are going to bid for the Summer Olympics and the economy is absolutely booming. If you look at India, we own, with Reliance, the rights to create a super league in soccer for the next 15 years. We have the rights [from the federation] to create an Indian basketball league, with Reliance, for the next 30 years. No one else has that. The NBA doesn’t have that.
■ Where are you on setting up that Indian basketball league?
DOLAN: We are looking at who is the right set of partners that we need or want to have. It’s a three-way dance; it is us, our partners at Reliance, and the third party, either the NBA or some other group, that would have to say this is something we’d want to be part of and what are the terms. The No. 1 sport in India is cricket, by far. But if you look at the demographics, people older than 35 or 40, around 80 or 90 percent will say their favorite sport is cricket. Under 40, only 50 percent will say that. There is a good infrastructure of [5,000- to 7,000-seat] basketball arenas, because of the Commonwealth Games they had a few years ago. There is a trickier set of issues when it comes to soccer pitches in India. There are probably half a dozen international-quality pitches and there probably needs to be double that in order to fill out the league to the right level.
■ When do you see profits out of your joint ventures in China and India?
DOLAN: The JVs take some time to ramp up. In the case of Brazil, I’ve been surprised at how quick we came out of the blocks. We’ve [hired] a management company, more is in the pipeline, and the developer of Maracanã will be selected by the government Sept. 1. By the end of the year, we could be in a position in Brazil where we could have four or five major pieces of business that will begin to show real revenues in 2013 and beyond. [The joint ventures] are all different. In the case of India, one of the big revenue sources will be the sale of franchises. People will be looking at what we were able to do with the cricket league, and we have had some exciting conversations with European clubs which will be part of this effort in India. I think we will be up and running in India with a soccer league by the end of this year and with a basketball league at the beginning of next year. So we are farther and faster in Brazil than with the other JVs, and close behind that is India, with China and Turkey just started.
■ What do you look for in setting up these joint ventures?
DOLAN: What used to drive Ted crazy was getting a fee for service only and not an equity interest. So all of our recent JVs are based on the premise that we want to be an owner with someone in the local market. We bring a unique kind of expertise to a place like Turkey. They are going to bid for the 2022 or 2024 Olympics. Their economy is booming, and a result of that Olympic bid will be that they are going to need more stadia and arenas, which plays to our expertise. Turkey is like Brazil, with a five-year delay.
■ Digital and social media are two areas where IMG is perceived as lagging behind …
DOLAN: We’ve been behind the curve. Ted had scar tissue about digital. The error IMG made was trying to build a big digital group internally. The error we made when I was at MTV was trying to acquire those companies. In most of the acquisitions, the guy who was the star was required to stay a year, and a day later they were gone. We have a small group focused on digital, and what we’re doing is reaching out to the digital community to see how they can work with us. We have a few things going on in college, like Silver Chalice, and we’ve done some e-commerce work with GSI. Beyond that, we are doing some things in fashion that are really focused more on digital and trying to see how we can leverage our presence in fashion there. What people want to do is buy what they see on the runway with e-commerce. How do we partner with people that can do that? We don’t want to buy digital companies or build the capabilities inside. Good digital people don’t want to work for Google or Facebook. You are kidding yourself if you think they are going to work for IMG. So we want to do seed investments and partner, but not try to fool ourselves into thinking that we are going to be a digital company or acquire those companies at some kind of ridiculous multiple.
■ You have no regrets on any of the expenses it took to set up IMG College?
DOLAN: When we acquired the companies to set up that business, our whole premise was that you’ve got this enormously attractive set of demographics, better demographics than the NFL, MLB, NBA. Talk to any CMO and they get it, but they want to know how to play in that. So our revolution is taking what has been a locally run set of marketing initiatives and professionalizing it. The key is bringing in and embedding people who have come in from the pro leagues, and we have invested there. We have seen growth in revenues and profits there and we expect to see significant increases in both, and in the margins going forward.
■ Other than college, where do you see the growth for IMG domestically?
DOLAN: We are looking at “bolt-on” acquisitions, things that are small and complementary. We have a great licensing business, and that is a mom-and-pop industry where our global structure would be a great backbone. We are looking at some bolt-on acquisitions in consulting, to build out what we’ve got and the set of offerings.
■ What is your global economic forecast and how will that affect your business?
DOLAN: I am no economist, but what I am hearing is that Europe will be low growth, or maybe higher in the Northern European countries and no growth to negative growth in the southern countries for the next 10 years. The expectations for the U.S. are low, single-digit growth, although better than Europe, until we have sorted through all of our economic and banking issues. You see headlines in some of the developing markets about “growth stalls to 7.9 percent” and you just laugh. You have countries like Brazil or places like Nigeria where there are millions coming into the middle class. There was a phrase they used at Pepsi when I was there: “Fish where the fish are.” You want to be in those growth markets, and that is where we are trying to make noise. The Holy Grail in IPOs is a company with Western governance, accounting and controls that has a lot of exposure to developing markets. That’s what we offer.
Indianapolis rookie quarterback Andrew Luck must make good-faith efforts to work exclusively with Colts sponsors before signing marketing deals with competing companies under the terms of the contract he signed with the club, according to sources familiar with the deal.
Fellow rookie quarterbacks Robert Griffin III, with Washington, and Miami’s Ryan Tannehill have similar language in their contracts, sources said, and agents for all three quarterbacks struggled with the clubs during contract negotiations to make the language less restrictive, if not eliminate it all together.
Asked why, some agents said they thought it was an acceleration of a trend by clubs to try and control a player’s image off the field. One agent said he thought such clauses could help
Contracts for Luck (top) and Griffin require them to make an effort to work with team sponsors on marketing deals.
Photo by:GETTY IMAGES (2)
As a matter of course, agents usually negotiate with the sponsors of the team that employs the player, but the contract language can give the club sponsor a better shot at signing the athlete, agents said.
Luck’s agent, Will Wilson, executive vice president of football operations for Wasserman Media Group, declined to discuss the details of the quarterback’s contract but said, “The language that we agreed on is mutually acceptable and is designed to exploit synergies with the team where they exist but in no way limits Andrew’s ability to sign endorsements.”
Ben Dogra, CAA Football co-head and agent to Griffin, would not comment.
Pat Dye, Tannehill’s agent, said, “There is some obligation to use best efforts to work with team sponsors, but there is nothing preventing him from working with a company that is not a team sponsor.”
It was unclear, sources said, how it would be decided (or by whom) if there’s a dispute about whether a player used good-faith efforts — or, in Tannehill’s case, “best efforts” — to reach a deal with a team sponsor.
Dolphins spokesman Harvey Greene said the club does not comment on contracts. Redskins spokesman Tony Wyllie declined to comment. Colts spokesman Avis Roper said the team does not comment on player contracts.
SportsXchange.com first reported in June that one of the hold-ups in the Colts signing Luck was the club’s proposal to add language restricting potential marketing deals for him. Colts owner Jim Irsay, via Twitter, disputed the report and said Luck would be signed soon. Luck and the Colts agreed to a deal on July 19.
Former Colts quarterback Peyton Manning was not restricted as much by the language in his contract with the club, nor by the language in the contract he signed this offseason with Denver (see related story). Agents said such restrictions were not common when Manning entered the league in 1998. Further, because of the demand among clubs for Manning as a free agent, teams didn’t have the leverage to negotiate restrictions on his ability to sign marketing deals the same way they can with players who have less market demand.
CAA Football co-head Tom Condon, who represents Manning on the field, and IMG senior vice president Alan Zucker, who represents him in off-the-field endeavors, declined to comment.