IMG Tennis Pleased With Purchase By William Morris

Written by: on 23rd December 2013
Switzerland vs Australia
IMG Tennis Pleased With Purchase By William Morris

epa03669611 Two tennis balls drop on the water covered court while the start of the Fedcup Tennis matches between Switzerland and Australia is delayed due to heavy rain in Chiasso, Switzerland, 20 April 2013. Switzerland will face Australia in the the FedCup World Group Play-offs 20 and 21 April. EPA/KARL MATHIS  |

IMG tennis representatives appear to be pleased about William Morris Endeavor Entertainment (WME) acquisition of the company for between $2.3 and $2.4 billion.

WME does not have a tennis division and only represents two tennis personalities in No. 1 Serena Williams and the recently retired Andy Roddick, so IMG’s large tennis division will more than likely remain intact.

IMG is the biggest agency in tennis, not only running big tournaments such as Miami and Stanford, but also representing top players including Novak Djokovic, Venus Williams, Maria Sharapova, Li Na, Kei Nishikori, David Ferrer, Sabine Lisicki and the recently retired Marion Bartoli.

WME is a big hitter in the entrainment industry and understands talent representation, which was not the case when Ted Forstmann bought IMG for somewhere in the range of $700-$750 million in 2004. Forstmann had no experience in a client representation and ruffled some feathers after he bought the company.

But Forstmann was a quick learner and under his leadership IMG did end up expanding its client basis.

Sources say that WME saw clear value in IMG’s tennis division, which not only includes athletes and tournaments, but broadcast and licensing deals with some of the sport’s most important institutions including Wimbledon and the Australian Open.

WME is said to see the tennis division as a turnkey operation that it won’t have to fiddle with. Most of the tournaments are profitable and the company makes decent profits from its deals with top players.

WME has one veteran tennis agent, Jill Smoller, who reps for Serena Williams and recently retired Andy Roddick.(WTT and Exo player )

Even though in the past 18 months IMG has lost two top agents in Tony Godsick, who left with his client Roger Federer, and Carlos Costa, who left with his client Rafael Nadal, it still has number of high profile agents including: Max Eisenbud, who represents Sharapova, Li, Laura Robson and Madison Keys; Spain’s Fernando Soler, who has oversees David Ferrer and heads the company European business; Carlos Fleming who reps for Venus Williams and Bartoli; as well as co-president Chuck Bennett, who heads IMG’s tennis, golf and fashion divisions.

Some IMG employees were worried that WME’s biggest rival in the entertainment industry, Creative Artists Agency (CAA), would win the bidding because it has built a large sports division and there would have been a lot of crossover.

In 2006, CAA hired former IMG agents to start CAA Sports and it now employs 150 people.

CAA’s workforce is said to have more than doubled to nearly 1,500 employees over the past eight years, with sports ranking as its fastest-growing division.

Sources say that IMG was looking to fetch $2.7 billion in the auction, but fell short of that. There is speculation that two of the reasons for that is the talent representation business is a slow-growth, low-margin business, and also one of its newer divisions IMG College, is expensive to maintain.

IMG College has the marketing rights to 90 universities and conferences, and its 2013 revenue will be around $375 million and operating income $75 million, but buying the media, merchandise and licensing rights of colleges is very expensive and the company must also take on huge operating costs that can affect earnings.

However, Forstmann Little’s estate is said to be pleased with the price as it represents a 12% compound annual return on the $750 million that Ted Forstmann paid for it in 2004.

IMG is expected to have earnings before interest, tax, depreciation and amortization this year of $190 million on revenue of about $1.6 billion.

While there doesn’t appear much of a crossover in the talent representation, there are in the two companies broadcasting and productions arms, which are not necessarily seen as synergistic.

IMG has 3,500 employees in more than 30 countries around the world, and says it’s involved in an average of 11 sports and entertainment events every day.

“Today marks the successful culmination of the bold global strategy devised by Ted Forstmann for IMG over many years,” said Mark MacDougall, a partner of the law firm Akin Gump Strauss Hauer & Feld, LLP, speaking on behalf of Forstmann Little. “We are confident that this fine company will continue to flourish and grow under the leadership of Silver Lake and WME.”

There is talk that WME may eventually go public.

Topics: , , , , , , , , , , , , , , , , ,





10sBalls Top Stories

In Case You Missed It

EUGENIE BOUCHARD NAMED 2018 TENNIS CANADA FEMALE PLAYER OF THE YEAR / EUGENIE BOUCHARD NOMMÉE JOUEUSE DE L’ANNÉE 2018 DE TENNIS CANADA thumbnail

EUGENIE BOUCHARD NAMED 2018 TENNIS CANADA FEMALE PLAYER OF THE YEAR / EUGENIE BOUCHARD NOMMÉE JOUEUSE DE L’ANNÉE 2018 DE TENNIS CANADA

Tennis Canada announced on Wednesday that Eugenie Bouchard is the winner of the 2018 Excellence Awards in the Female Player of the Year and Singles Player of the Year categories.
TENNIS NEWS • CALIFORNIA CHAMPIONSHIPS • TOMMY HAAS, TAYLOR FRITZ, STEVE JOHNSON, MARDY FISH AND MORE thumbnail

TENNIS NEWS • CALIFORNIA CHAMPIONSHIPS • TOMMY HAAS, TAYLOR FRITZ, STEVE JOHNSON, MARDY FISH AND MORE

Time to get tickets to watch! Surly you have heard about The Largest Open Tennis Event in America!
TENNIS NEWS • RAFA NADAL CONFIRMS RETURN TO PRACTICE, EYES ABU DHABI EXHIBITION AND AUSTRALIAN SUMMER thumbnail

TENNIS NEWS • RAFA NADAL CONFIRMS RETURN TO PRACTICE, EYES ABU DHABI EXHIBITION AND AUSTRALIAN SUMMER

According to Uncle Toni, Rafael Nadal was supposed to be back at practice on either Dec. 4 or 5. Well, better late than never!
Conchita Martínez prepara la temporada 2019 de Karolina Pliskova en Tenerife thumbnail

Conchita Martínez prepara la temporada 2019 de Karolina Pliskova en Tenerife

Española y checa ya trabajaron juntas durante el pasado Open de Estados Unidos
ALEJANDRO’S FAVORITE PHOTOS FOR 10SBALLS FROM SOME OF THIS YEAR’S TOURNAMENTS thumbnail

ALEJANDRO’S FAVORITE PHOTOS FOR 10SBALLS FROM SOME OF THIS YEAR’S TOURNAMENTS

Jelena Ostapenko of Latvia hits a forehand to Kaia Kanepi of Estonia during her second round match at the Nature Valley International tennis tournament in Eastbourne, Great Britain, on Tuesday, June 26, 2018.