Online Extra: Q&A with IMG's Mark McCormack
More than 40 years ago, Mark McCormack began booking golf exhibitions for Arnold Palmer at $500 a pop. In the decades since, McCormack, now 70, has built the company he eventually created, International Management Group (IMG) into arguably the world's biggest sports-management, -marketing, and -production empire. IMG's clients include Tiger Woods and Yankee shortstop Derek Jeter, and it controls licensing for events such as Wimbledon. Recently, McCormack discussed the changing face of sports marketing with contributing editor Mark Hyman.
Q: It's often said you invented modern sports marketing. Agree?
It's often said you invented modern sports marketing. Agree?A: It would sound extraordinarily conceited to say that. I was there at the right time and saw some connections between sports and selling products that theretofore hadn't been seen. That isn't to say if I hadn't been there somebody else wouldn't have done the same thing.
Q: In the early years, was there a plan to grow IMG?
In the early years, was there a plan to grow IMG?A: I would like to tell you I had a 40-year plan just now coming to culmination. Really, it has been a step-by-step thing. I was lucky in having Palmer, [Gary] Player, and [Jack] Nicklaus as my first three clients, and having TV hit right about that time.
Q: For the most part, you grew the company organically, rather than by buying up competitors. Why?
For the most part, you grew the company organically, rather than by buying up competitors. Why?A: I am somebody who is very simple. You make a product for $2, sell for $3, and make a dollar. If it costs you 70 cents to make that dollar, you've made 30 cents. I don't think about stocks as currency for acquisitions.... We financed [IMG's growth] out of earnings all the way. It is the way I have always thought about business, which is a very unsophisticated and a very old-world way.
Q: In contrast, IMG's most potent rivals today were built through numerous acquisitions. What set off the recent consolidation frenzy in the sports-marketing biz?
In contrast, IMG's most potent rivals today were built through numerous acquisitions. What set off the recent consolidation frenzy in the sports-marketing biz?A: People started figuring out that sports was big and it was global. Everyone is very impatient in the world and wants it now. They figure the only way to get it now is to buy it. I think the concept is flawed in a lot of ways. I don't think you can combine cultures by buying small companies and throwing them together. You can't presume everyone will like each other and work well together.
Q: What's your reaction to the aggressive acquisition strategy of SFX SFX
What's your reaction to the aggressive acquisition strategy of SFX SFX ?A: I don't know anything about what SFX did in the entertainment business. But everything they did in sports they vastly overpaid for. Vastly overpaid.
Q: Will IMG go public?
A: I don't know why we would. Most people I know who have private companies that went public are sorry they did. I can read SFX's S-1s and know everything about every company they bought. I don't want to tell everybody in competition with us everything we're doing.