IMaGine

Friday, March 01, 2013 /by
The prestigious Sony Open in Miami is owned by IMG. (AP Photo)
The prestigious Sony Open in Miami is owned by IMG. (AP Photo)

We tend to think of tennis history mostly in terms of Bill Tilden and Rod Laver, Billie Jean King and the Williams sisters, the transition from grass to hard courts at the U.S. and Australian Opens, the advent of the large-headed racquet or the impact of polyester strings.

The commerce of tennis, including the men and women who shape or drive it, aren’t particularly sexy subjects. They’re bloodless, a little too far removed from what we love about sports, which usually has something to do what we might call the purity of athletics. But you can learn a lot about any sport—where it’s been, where it’s going—from the way sport is structured, and the nature and objectives of those who profit from bringing it to the public eye.

Thus, the recent news that IMG (International Management Group) is up for sale represents a milestone in tennis, even if it doesn’t register on the sporting radar anywhere near as seismically as Roger Federer bagging his 17th Grand Slam singles title, or Serena Williams becoming the oldest woman to hold the No. 1 ranking. Nor should it.

Of course, the sale of IMG also is a milestone that, when consummated, is bound to have repercussions in the game—most of them inconspicuous, or at any rate undeclared, but potentially significant. Will tennis eventually adopt a glitzy halftime show, complete with pyrotechnics (like the Super Bowl), between the doubles and singles finals at certain IMG-run tournaments? I suppose it could happen if a more aggressive and less tennis-savvy outfit ends up owning IMG.

IMG was founded by Mark McCormack, who’s generally acknowledged as the founder of the sports representation business. He made the great leap from mere lawyer to super-agent, which is a frying pan to fire kind of thing. McCormack got his start when he convinced golfer Arnold Palmer that he needed a lawyer not just to protect his interests and advise, but to negotiate his contracts and do things for that a famous professional athlete had scant little time, experience, or expertise to take on: Maximizing his value, and pursuing and creating opportunities in the marketplace.

McCormack was known for his close, one-on-one relationships with his clients. Tennis, or at any rate tennis players, were very lucky that once his relationship with Palmer was proven successful, McCormack rapidly turned his attention to the world’s other upscale sport. With a strong business background (and a Yale law school degree), McCormack had a field day during the dawn of the Open era, signing tennis players left and right—his original clients included Rod Laver, Bjorn Borg, John Newcombe, Evonne Goolagong, and Chris Evert.

IMG was founded on the shoulders of golf and tennis players, and they went around humming a tune not unlike that John and Yoko anthem, only for the athletes the title was IMaGine.

Not long after McCormack died in 2003, IMG was sold to the private equity firm of Forstmann, Little and Company. But the one thing both owners of IMG had in common—apart from being attorneys, hold the lawyer jokes, please!—was an inherent interest in the game.

McCormack’s second wife was former pro (and two-time Australian Open doubles champion) Betsy Nagelsen. Ted Forstmann, a founder of FLC, was a tennis enthusiast well-known in pro circles as the enthusiastic host of the Huggy Bear—an annual, high-octane pre-U.S. Open pro-am tournament in which tennis players (including scads of famous ones) were paired with high rollers in a lavish extravaganza held on private tennis courts in the Hamptons, the summer playground of Manhattan’s financial and cultural elites. The tournament was successfully kept out the media, and it was a huge hit with the Hamptons crowd because was all about gambling (with a special handicapping system in use to encourage punters). It wasn’t merely decadent, though, because it was all for legitimate charity. The Huggy Bear raised millions for indisputably worthy causes.

Forstmann died in 2011, and now his heirs and agents are unwinding his business interests—of which tennis and IMG were but a part. It will be interesting to see who ends up buying IMG, which over the years expanded to manage celebrities and models as well as pro athletes in an array of sports.

According to a recent report in Reuters, Forstmann bought IMG in 2004 for a reported $750 million. The business now may be worth in excess of $2 billion, which leaves out an awful lot of potential buyers (myself included). It’s an attractive target for high-profile entertainment titans like Creative Artists Agency and William Morris, along with media heavies including the French outfit Lagardere, which has become increasingly active in tennis. As well, large private equity firms and individual billionaires are expected to be among the bidders.

The striking thing to me is how the history of IMG represents the evolution of tennis from a somewhat insular and esoteric sport into a staple of mainstream entertainment. When McCormack took on tennis, the players thanked their lucky stars that so entrepreneurial a man took an interest in them, although the wiser among them understood that McCormack, for all his genuine interest, also saw the potential for growth and profit from the sport. By the time Forstmann entered the picture, tennis was established as a mainstream sports business. His own connection to the game was less deeply rooted than McCormack’s had been, but it was real, and it grew.

Given that IMG is already deeply involved in promoting and staging the game—as well as the core business of athlete representation—you have to wonder what the eventual new owner might bring to the table. More than that, you have to wonder how familiar or inherently vested in tennis that said new owner is apt to be.

Will that final, personal link between owner and company be severed, making IMG another one of those “soulless corporations” (though some would argue that it already is just that)? Does it even matter?

I’m tempted to pull for Lagardere, or an individual like Ion Tiriac or even Larry Ellison, to make the move and buy IMG. But the reality is that IMG has become a much bigger business than my tennis-centric mind—and that of any tennis-first party or entity—can accommodate. Maybe the analysts working at those private equity firms, or in the service of those billionaires, see more potential for growth in areas other than tennis. That could have a significant influence on where tennis goes next.

So be it. Tennis has been lucky to have the likes of McCormack and Forstmann at the head of IMG. We’ll see if the winning streak continues, or if IMG edges tennis toward taking that final step away from its original, community-based nature.

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