View From the Spire: The Good, Bad, the Ugly
August 25, 2011 5 Comments
IMG Worldwide – the most global of giants, have defined cornering a market. In fact – not just one corner – it has fought in all available corners – and it seems that every market is one that they can lay claim to ruling.
Take the business of sport, they exist everywhere no matter what sport and no matter on what basis. From consulting, venue development, event management to talent representation, training/academies, sponsorship and media distribution – they do it all, they are very good at it and they are the undisputed world beaters at it. Then take the other industries involving celebrity, media, advertising and property development. They “own” all of these too.
If we look at almost any sporting event – and let us say golf. They “own”, through having developed, or managed, the golf courses and resorts. They deliver, and subsequently, manage many of the biggest and most high profile events using and promoting that venue. They manage, and therefore, bring the highest profile talent that plays in that event, to the course that they also promote. They manage, and therefore deliver the sponsors, gaining benefit from the profile and exposure their talent delivers by playing in their own events at the venue that they gain benefit from owning or managing!
IMG deliver the media relationships that drive the awareness and creates sponsorship that drives the talent that benefits the venue that bolsters their revenue to make them more powerful that drives the opportunities. And so the cycle continues. Endlessly. The cradle to grave delivery clearly delivers great revenue and creates some of most interesting and highly watched spectator sporting events the game of golf has.
So with that approach, is it good for a company to own and manage every element in a particular business vertical? I guess financially it is – if you are IMG. What could be bad about taking 20% out of every step in the process – and taking a sizeable consulting chunk on top where you can appropriately?
In golf, they also have a unique relationship with the European Tour and the PGA Tour, running many of their now global events – one might question be who is the governing body and which one tows the line in support? With IMG and the European Tour is it a question of the tail wagging the dog? Which one is really in control? Heaven forbid, is IMG powerful enough to have a bearing on who plays as picks in a competition like the Ryder Cup?
And what if you are high performing talent. Should you be with IMG as they will cut you the best and biggest deals and ensure your participation in the biggest events. If not, what does it mean for you? (Though I guess Rory, GMac or Darren Clarke are not currently suffering with Chubby Chandlers ISM stable!)
In golf course design and management – read the IMG brochure, it is about creating the best golf courses in the world. To me – that’s a niche, but limited market. Not every course can be the best, not every course can host a top end tournament and not every course is a property development where multi million pound houses are suitable – especially in this financial market. Although is that where everyone else has tucked in behind IMG and found their own niche?
At a time when, barring the elite’s unique position, the golf industry is suffering, clubs and facilities are closing across the globe and the governing bodies should be exploring ways to develop the next generation of golfers – to support the facilities, the equipment and apparel manufacturers and to ensure a future for our sport. I would ask what are IMG doing in this regard? Where is its legacy for the sports it reigns supreme in?
However, does what makes Mark McCormacks (RIP) IMG commercially great at the elite level also make it bad as a business? Does it make it irrelevant? Out of touch? Too big to be flexible? Too inbred and set in its ways with its many departments, pigeon holes to adapt to the ever changing world we live in? Could it could be too corporate – and therefore really quite ugly and cumbersome?
And considering that, does it actually allow for the smaller, more nimble and ultimately cuter boutique organizations, like ISM, Bounce Sports Marketing, Braemar Golf or even G3k Consulting to cut their cloth, make their mark and work to corner that particular element of the market be it talent representation, events, course design and management or sponsorship and events underneath the might of the IMG brand?
Think Jerry McGuire’s fewer clients, better “management” and you might be almost there. Also look at Chubby Chandlers ISM stable that currently holds 3 of the 4 majors and you see it competing with the big, bad, ugly boys in real life!
Which ever way you look at it, IMG have done well, and others have positioned themselves to slip into their wake and so it just seems to work. Either way, there is an interesting series of questions that would have some interesting answers.