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The Visionary He created sports marketing and changed the worlds of golf, tennis and television. How will IMG survive the loss of its brilliant founder? Mark McCormack 1930-2003

May 26, 2003
May 26, 2003

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May 26, 2003

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The Visionary He created sports marketing and changed the worlds of golf, tennis and television. How will IMG survive the loss of its brilliant founder? Mark McCormack 1930-2003

The silence was bad, of course, but everyone was used to his
silences. It was one of Mark McCormack's most famous negotiating
tricks: Stay quiet, let the other guy grow uneasy, and to cover
his awkwardness he'll talk, reveal himself, give you an edge
before the first cup of coffee is served. Even when that tactic
became a cliche--after the people across the table from him had
read his books, and his words were taken as gospel by business
students and by every young carnivore churned out by McCormack's colossal International Management Group--it still worked. In 1989,
as Dick Ebersol, the newly minted head of NBC Sports, hurried to
his first meeting with McCormack at the French Open, he kept
warning himself: Don't babble, and for God's sake don't give
anything away.

This is an article from the May 26, 2003 issue Original Layout

They sat. McCormack didn't say much. Within 10 minutes Ebersol,
with no authority from his bosses at General Electric, was
outlining his vision of the future of sports and how NBC was
going to dominate it and wondering, by the way, if there was some
way NBC and IMG could merge? "I looked in his eyes," Ebersol
says, "and they gave me nothing back at all."

So, no, the fact that the 72-year-old McCormack lay speechless
for four months before dying last Friday in a New York City
hospital wasn't completely out of character. What most struck the
friends and relatives who sat reading him e-mails, books and
prayers in a vain bid to talk him out of his coma was the idea of
McCormack lying there with a tube jammed into his throat,
doing...nothing. "You're always going somewhere," a friend once
complained to him. McCormack never saw the problem; this was a
man who, after all, scheduled playtime with his children and set
up casual phone calls months in advance. This was the agent cum
entrepreneur who, after one handshake with Arnold Palmer in 1960,
spent a lifetime of 18-hour days flying, meeting and scribbling
endlessly on a yellow legal pad, angling his way into a singular
place in sports history.

"He did more to change the field of professional sport than
anybody," says Donald Dell, who in 1970 copied McCormack's
blueprint and founded the agency ProServ (later bought by SFX
Sports Group), beginning a bitter 27-year rivalry between the two
companies. Who won? Put it this way: When Dell began lecturing on
sports law at the University of Virginia, he asked McCormack to
be his first guest lecturer. "To my shock, he accepted," Dell
says.

It made sense: McCormack liked victory laps. The yips had killed
his ambition to be Palmer, but after signing Palmer to an
exclusive representation deal with that handshake, McCormack
singlehandedly created the field of sports marketing by attacking
business with the mind-set of a jock. He never lost his
adolescent pride in being the first, the best and the biggest; he
kept score, needed to be No. 1 and usually was. Mark the
Shark--the first agent to marry athletes to big business and the
first to grasp the need to go global--built IMG into the $1.3
billion gorilla of sports (and its TV arm, TWI, into the world's
biggest independent producer of sports television) and made
himself and his clients very rich. Palmer, still bound to IMG by
that handshake, is now worth an estimated $200 million.

In the '70s McCormack was dubbed the most powerful man in golf;
in the '80s, the most powerful in tennis. Thirteen years ago this
magazine threw in the towel and declared him the most powerful
man in sports. No one argued. IMG may represent talent, but it
also owns or co-owns nine tennis tournaments, has a hand in
marketing or televising all eight Grand Slam events in golf and
tennis and partially financed the creation of China's pro
basketball league. Even as McCormack cluttered the TV dial with
trashsports such as The Superstars and World's Strongest Man, he
saw the virtue of representing hoary institutions such as the All
England Club at Wimbledon and the Royal and Ancient Golf Club of
St. Andrews, respecting tradition yet leaving both venues covered
with his fingerprints.

The sneaker commercial, the luxury suite, the stadium with a
corporate sponsor, the athlete demanding to be shown the money,
Tom Cruise begging Cuba Gooding Jr., "Help me ... to help
you"--all that, and plenty more both good and bad, came from
long-ago firings of McCormack's machine-gun mind. Yet after
suffering cardiac arrest during minor surgery at a Manhattan
dermatologist's office in mid-January, McCormack lay immobile,
his brain choked by a lack of oxygen. "That's what's so, so
hard," his wife, former pro tennis player Betsy Nagelsen, said 10
days before his death. "It's not so much the limbs; if he spent
the rest of his life in a wheelchair, that wouldn't matter. But
not to have his brain functioning...."

Yet in one sense, McCormack's condition was oddly symbolic. He
personified the industry he created, and both sports marketing
and IMG have been dealt punishing blows recently by the slowing
economy and by other factors ranging from Sept. 11 to
mystification about what the next big thing will be. IMG began
cutting staff late in 2001, laying off about 13% of its
workforce, but that didn't save the company from a demoralizing
2002. Its plan to become a player in European soccer sputtered
into full retreat; its 1998 investment of $75 million in the
tennis stadium at Indian Wells, Calif., spawned
multimillion-dollar losses; its winter-sports division sagged.
The sport in which IMG has its biggest footprint--pro tennis--is
in decline.

While no one predicts the demise of IMG, it's clear that what was
once considered the company's unmatched asset--its size and
scope--has become bloat. Despite its presence in Chinese
basketball, IMG underestimated the Yao Ming phenomenon and did
not sign Yao himself. (He went to agent Erik Zhang.) And despite
the proximity of the agency's Cleveland headquarters to LeBron
James's high school, last week IMG failed to land the likely No.
1 NBA draft pick, who signed instead with Aaron Goodwin.

"[IMG] has to change the way it does business," says one industry
observer. "Look at extreme sports: Back in the day that wouldn't
have snuck up on them. But they got into it late. It used to be
that nobody could compete with IMG, because they were everywhere.
Why they're not everywhere anymore, I don't know."

While quick to dismiss rumors (happily disseminated by IMG's
rivals) that the company is hemorrhaging money, newly appointed
co-CEOs Alastair Johnston and Bob Kain admit that the days of
expansion are over. Properties, employees, events, salaries--all
are candidates for the chopping block, and the only question
seems to be how bloody a mess it will be. "It depends on what end
of the sword you're holding," says Johnston, a 30-year employee
who formerly led IMG's golf and international divisions. "We
don't have a whole lot of the same emotion Mark had. Mark did not
like putting people on the streets. I'm not suggesting Bob and I
will be cannibals, but we've got to take a more objective view of
these things."

The key, both men say, is for IMG to get back to its core: golf,
tennis, player representation, television rights and production.
IMG Artists, the company's classical-music division, and IMG
Models are potential targets for elimination, especially in light
of IMG's quiet May 3 sale--at a hefty loss--of its first-division
soccer team in Strasbourg, France. IMG's showpiece New York City
office is for sale.

McCormack was a notorious pack rat; he kept a lifetime's worth of
scorecards, pictures and notes. Though he signed off in December
on the moves that Johnston and Kain are now making, no one doubts
that carrying out such massive cuts would've pained him. In the
same month that he collapsed, in fact, some employees were being
told they were no longer needed. Kain dreamed more than once of
McCormack bolting upright from his coma and barking, "What, are
you crazy? What are you doing?"

Yet no one argues that it must not be done. McCormack's three
children from his first marriage--Breck, 45, the president of IMG
Asia; Todd, 42, the president of TWI Interactive; and Leslie, 37,
a senior vice president in the London office--all have a claim to
the throne, yet, along with Nagelsen, all back Johnston and Kain
and say they have no interest in running IMG.

"If you're just worried about IMG surviving 10 years from now,
then maybe what's happened isn't all bad," says Nike marketing
director Ian Todd, a former IMG vice president, of the shake-up
being undertaken by the new leadership. "They'll get through
this, and what's happened to Mark is forcing them to make
decisions now that if Mark was still active, they might not make.
When the good times come again, they're going to be snowed with
business."

Then again, since the arrival of Maggie--his daughter with
Nagelsen--five years ago, friends had noticed a change in
McCormack. He still worked long hours, still nibbled nervously on
a finger before negotiations. But he'd found religion and was
spending more time at home in Orlando, swimming with the little
girl who looked and acted just like him. He was still pulling in
business: Last year Nicklaus, who left IMG in 1970 to start
Golden Bear Inc., asked if McCormack would work with him again.
Days before McCormack collapsed, on a January Sunday morning much
like those Sundays in the '60s when Arnie was charging and you
could almost smell the money pouring in, McCormack met with
Palmer at Bay Hill. For an hour, Palmer says, the two pioneers
"laughed and had breakfast and talked about the past and all the
funny things that happened."

Then came fate's cruel joke: Nagelsen had brought McCormack to
Christ, but they hadn't talked much about limbo. For four months
he hung there, and then Friday morning, alone, with no family
near, he suddenly had somewhere to go. For the last time, Mark
the Shark was on the move.

B/W PHOTO: PHOTOGRAPH BY WALTER IOOSS JR.B/W PHOTO: ADRIAN DENNIS/GETTY IMAGES GOLDEN By 1965 (left) McCormack was building his $1.3 billion company.COLOR PHOTO: HEINZ KLUETMEIERCOLOR PHOTO: DARREN CARROLLCOLOR PHOTO: CHUCK SOLOMONCOLOR PHOTO: BOB MARTINCOLOR PHOTO: JOHN BIEVERCOLOR PHOTO: MICHAEL CONROY/AP JOHN MADDENCOLOR PHOTO: CHRISTINE NESBITT/AP KATE MOSSCOLOR PHOTO: BETH A. KEISER/AP JACK WELCH

The IMG Empire

Founded in Cleveland in 1960, Mark McCormack's company has
ballooned into a $1.3 billion global Goliath that represents more
than 1,250 athletes and artists. Its 2,500 employees work in 80
offices scattered across 32 countries. The sports-marketing
giant's top five divisions (listed separately here, followed by
the rest of the divisions) generate more than 50% of its total
revenue.

TWI

IMG's television division is the world's largest independent
producer and distributor of sports programming (9,000 hours per
year). TWI has negotiated the TV rights for the organizing
committees of six Olympiads.

GOLF

IMG represents more than 1,000 pros, including Tiger Woods,
Annika Sorenstam and Sergio Garcia, and has partnered with its
clientele to design more than 400 courses.

TEAM SPORTS

Derek Jeter, Peyton Manning, Brett Hull and Wade Phillips are
among the marquee pro athletes and coaches that IMG manages. The
firm's client list also includes badminton, cricket and rugby
players.

RACKET SPORTS

The marketing conglomerate owns or co-owns nine tennis
tournaments (including the Pacific Life Open at Indian Wells and
the NASDAQ-100), controls the marketing and TV rights to
Wimbledon and represents more than 100 tennis players, including
the Williams sisters, Lindsay Davenport and Pete
Sampras.

WINTER SPORTS

IMG owns the blockbuster Stars on Ice; represents the
International Skating Union, which governs the sports of figure
skating, ice dance, speed skating and short-track skating; and
represents Olympic gold-medal-winning skiers Tommy Moe and Picabo
Street and snowboarder Shaun White.

OTHER DIVISIONS

* Artists
* Broadcasting
* Consulting
* Creative
* Expositions
* Extreme Sports
* IMG Academies
* Licensing
* McCormack Advisors International
* Models
* Motor Sports
* Olympic Marketing
* Promotions
* Publishing
* Speakers
* TWI Interactive

Compiled by Luis Fernando Llosa