Last thursday, during the sun-drenched first round of the AT&T Pebble Beach National Pro-Am, Ted Forstmann, a 65-year-old New York businessman with fluffy white hair and a nobody-rushes-me gait, was smack-dab in the middle of Pebble Beach glamour. A few holes ahead of him on the Spyglass Hill course was golf's Elvis, Phil Mickelson, on his way to shooting a snazzy 62. A hole ahead of Forstmann was Bill Murray, fully engaged in his role as a pied piper for grownups, at one point leading his gallery in a rendition of the old Del
Shannon hit Runaway. Right behind Forstmann was Donald Trump, with his thick waist and weird orange hair, chatting up his fans while sizing up improbable recovery shots. As for Teddy, as his prep-school classmates still refer to him, he was playing with his friend Vijay Singh, the best golfer in the world, and being entouraged by a lady friend maybe half his age and a small group from Forstmann Little & Co., the buyout firm Forstmann runs and Singh endorses. It was a big day. For the first time since he bought IMG last fall for a reported $750 million from the heirs of world-class extrovert Mark McCormack, Forstmann was out front as a public sportsman representing the agency.
IMG manages Vijay Singh and Tiger Woods, the Williams sisters, Derek Jeter and hundreds of other baseball, hockey, football, soccer and tennis players. (The company manages models and announcers too.) IMG, which also owns a television production company that produces a staggering 6,000 hours of sports programming annually, is one of the biggest sports companies in the world. For years, Forstmann has been a regular in The Wall Street Journal and in the gossip columns. (He had a stint as an escort for Lady Diana, and there was a period when he was dating Elizabeth Hurley, the actress and model, who is an IMG client.) But from now on he'll be a sports-page bold-face name too.
When Forstmann bought IMG, he flew to the company's headquarters in Cleveland and met with employees. They had come up, most of them, under McCormack, who cared chiefly about the footprints he left and the athletes he managed, many of whom had his cellphone number. McCormack ran a global company employing about 2,200 people as a small family business, where only the owner got truly rich but almost nobody got fired. "Mark had his way of doing things, and I've got mine," Forstmann said that day. "One thing I have is a knack for making money." For some, his words were encouraging. Others wondered if their days at IMG were numbered. The agency has been reducing its workforce since
McCormack's death in May 2003. A year from now IMG is expected to have about 1,500 employees and is currently undergoing a substantial reorganization. The company is slimming down and tightening up. Many business executives, even IMG competitors, say the agency is likely to flourish under more disciplined management.
In early January, Forstmann asked two dozen of IMG's leading managers, nearly all of them men, to meet in New York, where Forstmann lives and where Forstmann Little is located. They gathered in a private room at 21, the clubby midtown Manhattan restaurant, and sat at a long, narrow table. Forstmann, who had installed himself as IMG's chairman, sat at one end, while the man he had named as president, Bob Kain, sat at the other. The big news was this: For the first time in its 45-year history, IMG would begin a stock option program. At one time sharp young lawyers and MBAs came to IMG because they loved sports and wanted to be around athletes. They stayed because they fell under the spell of McCormack. With Forstmann running the show, it's a brand-new day. Now the incentive to stay is the prospect of a monster payday down the road if Forstmann takes IMG public or decides to sell it, in whole or in pieces, for far more than what he paid for it.
As a dealmaker Forstmann has had two high-tech clunkers in the new millennium, XO Communications and McLeodUSA, but his colossal success with Gulfstream jets and Topps trading cards and Dr Pepper and a dozen or so others over the past 30 years has already made him very rich, with houses and apartments here and there, his own jet, a string of fabulous girlfriends (he has never married) and club memberships from Bel Air in Los Angeles to Shinnecock Hills in Southampton, N.Y. (When Singh played in the U.S. Open at Shinnecock last year, he stayed at Forstmann's Southampton summer home.)
So why did he buy IMG? "To make money for my investors," he said last month, as he sat low in a sleek chair in his corner office in Manhattan, 44 floors above Fifth Avenue. But you get the feeling there may have been a motivation even greater than money. The office gave clues. All around him were artifacts from a life that has crisscrossed with George H.W. Bush and Nelson Mandela and Pope John Paul II. There was also a framed Augusta National scorecard that showed Forstmann shooting 76 and Singh 65, and other evidence of his sporting life. As a boy growing up rich in Greenwich, Conn., he had an abiding love for the Brooklyn Dodgers, and today he owns the film rights to The Boys of Summer, the seminal book about the team. In his winters at Andover and Yale, Forstmann was, he says, "a really good goalie." His mother, Dorothy Forstmann Sammis, diminutive and domineering, pushed him into tennis and away from baseball as his spring sport in high school, and he became good enough to play in elite junior events on the grass courts of Forest Hills. For years he has run a charitable pro-am doubles tennis event called the Huggy Bear at his Southampton home right before tennis's U.S. Open. As kids Forstmann and his brothers, John, Tony and Nicholas, whose death in 2001 at age 54 devastated the family (Forstmann also has two sisters), stomped all over country club courses in Greenwich. Today Forstmann carries an eight handicap at three top-shelf Long Island clubs, Deepdale, the National and Shinnecock Hills. In the early 1990s he asked McCormack, whom he'd met through tennis, to help him examine the books of the Los Angeles Dodgers to see if he should buy the team he had rooted for as a boy. A decade or so later he made his sports play through his purchase of IMG.
McCormack was one of the great salesmen of the 20th century. He sold his athletes so well because he was in awe of their talents. Forstmann is not like him. You don't meet Forstmann and immediately find him warm or charismatic. He has a reputation for being prickly and tough on the help. And he is busy, focused on his work and whatever other tasks are at hand. His Yale hockey teammates have been holding reunions for 40 years, but Forstmann never goes.
He manages himself wisely. Golf represents roughly 25% of IMG's total business (TWI, the agency's television production wing, accounts for about 50%), but Forstmann lets his golf people, most notably Mark Steinberg, who was recently named codirector of the golf division, handle the details. Steinberg's main job is to make sure that Tiger Woods is happy. McCormack, in the early 1960s, was famously aligned with Arnold Palmer, and that caused Jack Nicklaus to leave the fold. But Woods and Singh are unlikely to leave IMG as long as they believe no other firm can make them more money, a position that reflects the consensus among IMG's other golf clients.