SBJ/August 20-26, 2012/Labor and Agents

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  • IMG Golf adds agents; eyes Florida relocation

    IMG Golf is reloading its agent roster after the recent loss of several high-ranking executives.

    Ira Stahlberger, who previously has managed business development for TV talents Erin Andrews and Kirk Herbstreit, is taking over the representation of Luke Donald, IMG’s highest-profile golfer on the PGA Tour and a former No. 1-ranked golfer in the world standings. Stahlberger is a senior vice president in IMG’s Chicago office.

    Carlos Fleming, who has managed the off-field marketing of quarterback Cam Newton and wide receiver Victor Cruz, is adding golfer Michelle Wie to his portfolio.

    The reallocation of personnel to support golf is part of a new-look IMG Golf that soon will have a home base in Florida after 50 years of being headquartered in Cleveland.

    IMG is fighting the signing of Patrick Cantlay by ex-IMG agent Mark Steinberg.
    Photo by: GETTY IMAGES
    Guy Kinnings, co-managing director of the golf division, said he’s exploring Ponte Vedra Beach, Fla., home of the PGA Tour, and Jupiter, Fla., as sites for a new IMG office that will house close to a dozen or more employees. Jupiter is a logical site, Kinnings said, because so many professional golfers have homes there.

    Cleveland has been the home to IMG Golf ever since Mark McCormack founded the company, and an office will remain there.

    “The Cleveland office has always been a spiritual home base and we’ll always have some key personnel there, but there will be a golf-focused office in Florida,” Kinnings said. “That will be a new hub. … When you look at all of the media and sales people we have in New York, golf personnel in Chicago now, and offices all over the world, we have so many more golf resources now than we did before. Despite some of the things that have happened — and it hasn’t been enjoyable — we really are in a growth mode.”

    IMG is not finished in the courtroom, either. After settling a breach-of-contract dispute with Jon Wagner last week, IMG now is challenging the recent signing of Patrick Cantlay by former IMG and current Excel Sports agent Mark Steinberg.

    IMG alleges in Cuyahoga County (Ohio) court of common pleas that the noncompete clause in Steinberg’s old contract prohibits him from signing IMG players or prospective players for two years from his May 2011 termination date.

    Cantlay, the world’s top-ranked amateur and a UCLA All-American, left school in June and signed with Steinberg. But IMG contends that Cantlay was on IMG’s recruitment list going back to Steinberg’s employment with the company, and therefore Steinberg should be restricted from signing him.

    Harry Cornett, the attorney for Steinberg and Excel, said he couldn’t comment because the case is ongoing.

    “We’re simply trying to protect our rights,” Kinnings said.

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  • Private equity firm returns fire, countersues agency LMM

    Editor's note: This story is revised from the print edition.

    Liz Mullen
    A private equity firm that quietly acquired a 40 percent share in the NFL player representation firm run by agents Ethan Lock, Eric Metz and Vance Malinovic has asked an Arizona state court to place the agency in a receivership and return the $4 million the company invested in the agency, according to court documents.

    The agency has been operating as LMM Sports Management.

    Your Source Pacific Fund (YSP), which paid Lock, Metz and Malinovic $4 million in 2009 for a stake in the company, alleged in a court filing in June that LMM violated the terms of its operating agreement in a number of ways, including making loans to employees and others, including a $350,000 loan to LMM client and Dallas Cowboys tackle Tyron Smith.

    YSP says LMM lent $350K to client Tyron Smith, violating their operating agreement.
    Photo by: GETTY IMAGES
    LMM sued YSP and its subsidiary, financial advisory firm Your Source Financial (YSF), in October 2011, alleging breach of contract and fraud, among other things, and asked for actual and punitive damages in excess of $900,000. LMM, YSP and YSF are all located in the Phoenix area.

    Lock, an LMM principal and NFL player agent, declined to comment. Metz and Malinovic did not answer calls, and attorneys for LMM did not return phone calls.

    An official at Your Source Financial did not return a phone call, nor did three attorneys representing YSP and YSF in the litigation.

    Joe Panos, a representative for Smith, could not be reached at deadline. Panos recently left LMM and joined Athletes First. He is not named as a party in the ongoing litigation between LMM and the Your Source companies.

    LMM has represented five first-round NFL draft picks in the last two years and has long been considered one of the more successful NFL player agencies in the business.

    Founded in 1984, LMM had been 100 percent owned by the three agent partners until 2009. As part of the agreement with YSP, Lock, Metz and Malinovic each invested $100,000 for a 5 percent stake in YSF, the financial firm, according to court documents.

    LMM, in its lawsuit against both entities, contends that YSP failed to make required capital contributions and otherwise fund ongoing expenses and growth of LMM, as required by the operating agreement. In that lawsuit, LMM asked that the court dissolve the agency as it then existed as part of its request for relief. “The members of the Company (LMM) are hopelessly deadlocked in the management of the company, causing irreparable injury to the company, lost profits and the inability to conduct the business of the Company,” LMM said in its filing last year.

    In its countersuit, YSP contends that the LMM partners incorporated a new company, called LMM 2 in court documents, and moved the assets of the NFL player rep firm to that new company. Your Source is asking that both LMM and LMM 2 be placed in a receivership.

    ARCHAMBEAU JOINS NFLPA: Former NFL player and agent Lester Archambeau has left Sportstars and joined the NFL Players Association as a regional director. Archambeau and NFLPA officials did not return calls for comment.
    Sportstars founder Alan Herman, asked for comment, said via email, “Lester Archambeau has always been a players advocate. … His leadership ability and exceptional intelligence will be a huge asset to the NFLPA.”

    Herman and other Sportstars agents will represent players Archambeau had been representing, including New York Jets rookie wide receiver Stephen Hill.

    Liz Mullen can be reached at lmullen@sportsbusinessjournal.com. Follow her on Twitter at @SBJLizMullen.

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  • After delay, ex-IMGer Wagner gets new firm going

    Jon Wagner began forming his new golf agency in May when he left IMG, but in some ways, Milestone Sports Management doesn’t formally open for business until this week.

    Because he’s been embroiled in a breach-of-contract case with IMG over a noncompete clause, Wagner virtually put his Milestone business on hold. An investment partner withdrew, two golf clients are seeking representation elsewhere and two potential employees were blocked from coming on board, all in the last three months.

    Wagner
    Once the case was settled last week, Wagner regrouped and embarked on his new business venture.

    He has signed his first consulting client, Capital One Bank, which is looking to enter the golf space, and he has begun his pursuit of golfers to represent. Wagner said he would like for Milestone to have competencies in several categories, including corporate consulting, player management and event management. The 28-year veteran of the golf business touched all of those disciplines at IMG and previously was a PGA Tour executive, where he directed the 1991 and ’92 Tour Championships at Pinehurst.

    “The agency business in golf is in disarray and that’s why I think there’s such an opportunity right now,” said Wagner, 50. “A lot of agencies are in the midst of trying to decide if they’re too big or if they’re too small, and I think I have a clear vision of what this needs to be.”

    The noncompete clause caused him to forfeit former Masters champion Trevor Immelman and Sean O’Hair as clients at Milestone. He also resisted pursuing other golfers as new clients until last week because he didn’t want anyone else getting caught up in his legal matters.

    Wagner and IMG settled when Wagner agreed to abide by his noncompete, meaning he can’t hire IMG employees for a year and he can’t sign IMG clients or prospective clients for two years. Immelman and O’Hair, who were Wagner’s clients at IMG, became untouchable for Milestone for two years from his departure date. Wagner also had to pay IMG an undisclosed sum.

    Milestone, based in Cleveland, moves forward now, but not exactly in the way that Wagner had hoped back in May. One potential investment partner, Charleston, S.C., attorney Joe Rice, backed out during the legal proceedings with IMG because “I really didn’t know the extent of the restrictions placed by IMG,” Rice said.

    Rice, who is a co-owner of another golf agency, Empire Sports Management, didn’t rule out partnering with Wagner in the future, but currently “everything’s on hold,” he said during the PGA Championship as he watched from a suite on the 18th hole.

    Rice’s co-owner at Empire, Frank Antonelli, is close friends with Wagner, so the prospects of Empire and Milestone working together in a strategic partnership remain likely.

    “We’ll see how things go and how big we want this thing to get,” Wagner said.

    The noncompete also means that Wagner will be unable to immediately hire two former IMG agents, Kevin Lynch and Jeff Stacy. Lynch and Stacy left IMG after Wagner’s departure in May and planned to work at Milestone, but IMG blocked their hiring. Wagner is prohibited from hiring IMG employees for a year.

    Industry sources say that Lynch and Stacy are seeking work at other golf agencies.

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