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It's Nothing Personal—Honest
L. Jon Wertheim
March 22, 1999
IMG went to court when Jeff Schwartz took his leave—and star tennis clients
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March 22, 1999

It's Nothing Personal—honest

IMG went to court when Jeff Schwartz took his leave—and star tennis clients

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So much for the notion that pro tennis lacks a heated rivalry. Last month, in a scene straight out of Jerry Maguire, Jeff Schwartz, the agent for three of the world's most prominent players—Pete Sampras, Marcelo R�os and Martina Hingis—called his bosses' offices at Cleveland-based International Management Group (IMG) and announced his resignation. After working at the high-powered sports and entertainment marketing firm for more than six years, Schwartz said, he was eager to open his own sports law firm in midtown Manhattan. Oh, and one other thing: He might be taking Sampras, Rios and Hingis with him.

Without wasting time, IMG filed suit in federal court in northern Ohio charging Schwartz with fraud, misrepresentation and unfair competition. The firm also filed grievances against Schwartz with the New York and Connecticut bar associations, where he's a member. "He was given confidential information about the company and betrayed our trust," says Bob Kain, the longtime head of IMG's tennis division. "We trained Jeff and gave him his clients-it's not like he recruited Pete—and this is the appreciation we get."

Responds Schwartz, "I'm completely comfortable with what I did. The lawsuit is just a lame effort to discourage clients from retaining me."

At the heart of the contretemps is a noncompete clause in Schwartz's original employment agreement with IMG, which he signed in 1992. For a period of two years after his termination, the clause stipulates, Schwartz may not "directly or indirectly solicit or represent...a client with whom [he] had dealings while [he was] associated with IMG." Schwartz, 35, maintains that he is not bound by that agreement because he is starting a law practice, not a sports management company, and, therefore, is not in competition with his former employer. IMG, not surprisingly, contends this is a thinly veiled attempt to circumvent the agreement. The dispute over the noncompete provision will go before an arbitrator later this year, while IMG pursues its other charges in the lawsuit.

Although IMG represents hundreds of clients, ranging from Tiger Woods to violinist Itzhak Perlman, the defection of Sampras, Rios and Hingis—all have sent letters to IMG terminating their business relationship, though Hingis hasn't yet decided to follow Schwartz—nonetheless is serious. "No question, it would be a loss," says Kain.

It's not hard to see the motivation behind Schwartz's gambit, either. Even if he has to farm out certain services, such as marketing, he stands to reap exponentially more than the roughly $250,000 he was paid by IMG last year.

Amid the bickering, Schwartz's clients are standing resolutely by their man. Sampras—whose older brother, Gus, is employed by IMG as an account executive—released a statement on March 1 expressing "dismay" that IMG has taken legal action against "my friend and trusted advisor" and vowed to continue to retain Schwartz as his legal counsel. Rios expressed similar sentiments last week.

"If they think I'm just going to roll over," says Schwartz, "that's not going to happen."