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It may not be long before IMG owns the very land beneath the golfers' feet. "Golf course design and developments could represent huge, huge dollars for us," says Norton, who cites a report by the National Golf Foundation that says a new course would have to open every day from now until the year 2000 to keep up with the increasing demand. And that's just in the U.S. "Asia, especially Southeast Asia, is going to be an astonishing growth market in golf," says IMG's Johnston.
In Europe, it has been estimated that the number of recreational golfers will double in the next four years. Through one of its subsidiaries, IMG is developing golf and leisure resorts in France, Ireland, West Germany and Belgium and has ones in Hungary and Turkey on the drawing board. McCormack is also working in partnership with Langer Buckley, a golf course design and construction firm based in Germany and Switzerland. Together they have already designed courses in France, Germany, Italy and Austria. In return for a lower fee up front, IMG is usually willing to accept equity in the development projects.
"Then what we say is, when it's finished, if you want a tournament, we'll organize it," says golf course developer Terry Buckley, who opened up shop with IMG and its client Bernhard Langer to form Langer Buckley in 1986. "We may not be able to tell you which tournament it will be, but we're absolutely sure we can do it. It's all part of the A to Z concept. Mark got fed up with taking IMG tournaments to various golf courses around Europe and making those courses famous and their owners very much richer. So the thinking was, why keep creating this cachet for someone else? Why not create it for IMG's projects?"
The strategy makes perfect business sense. But has it made IMG too powerful and created conflicts of interest? If IMG wanted to move one of the tournaments that it runs—say, the German Open—to a new resort that it has built, owns equity in and wants to promote, what's to prevent it from doing so? The tournament organizers would be powerless for fear of alienating the company that represents Langer, Faldo, Woosnam, Norman, Lyle et al. As for the players, they don't care where tournaments are held, as long as they get their appearance fees. And IMG can afford to be generous with appearance fees since the highest ones go mostly to its own clients, and 25% of those fees goes right back to the company coffers. And Schofield isn't about to cross swords with McCormack. His worst nightmare is that he will somehow fall out of bed with IMG, and McCormack will decide to create a rival European tour.
Sinister as all this sounds, IMG has not, to date, abused its considerable power. McCormack is a fine amateur golfer—a seven handicapper who is struggling to get closer to the scratch game he used to play—and an avowed Anglophile who insists that he would be mortified if the British golfing establishment turned against him. "Mark makes us money, he does his job, and he's done it all with a great regard for the game of golf," says Maclaine. "We feel his heart is in the game."
IMG's tentacles are even more embracing in tennis, where, according to Norton, "there is more chaos, which gives us more freedom." In addition to representing 10 of the top 30 men, including Ivan Lendl, Mats Wilander and Andre Agassi, IMG has four of the top 10 women, including Martina Navratilova and Arantxa Sanchez Vicario. Fourteen-year-old star Jennifer Capriati, who had $5 million in endorsement agreements before playing her first pro tournament, is a recent addition to the IMG fold, and Chris Evert, who retired last year, earns millions in endorsements via IMG.
The company has television and promotional contracts with three of the four Grand Slam tournaments and has virtually bought the newly formed ATP Tour. In March 1989, for a minimum guarantee of a whopping $56 million over the next three years, IMG became the exclusive agent for the ATP's sponsorship rights and domestic and international television sales, and the promoter of the tour's singles finals, which will be called the ATP World Championships. "It's not the players' tour anymore, it's the IMG tour," said Thomas Muster, Austria's top player, after the announcement of the ATP-IMG arrangement. "This is very bad for tennis."
But not bad for IMG, which in recent years has devoted more and more of its resources to event management, a more lucrative, less hazardous field than its core business of client representation. As McCormack once pointed out to an IMG executive: "Bjorn Borg can break a leg; Wimbledon cannot."
IMG recouped part of its huge investment in the ATP Tour, which has an 11-month, 75-tournament annual schedule, when IBM agreed to pay at least $9 million over the next two years, with an option for a third, to be the title sponsor of the tour. The pact ended an embarrassingly long search for a sponsor and brings in far less money than IMG had hoped for. But McCormack says, "We've exceeded by a lot our projected earnings for the world TV rights."
"McCormack's doing a great job of developing an empire," groans Philippe Chatrier, head of the French Open, which is the only Grand Slam event in which IMG does not have a significant stake. "I'm afraid he walked into a vacuum."