CSMG recently acquired Arizona Cardinals quarterback and budding actor, Matt Leinart, but the company has seen a big downsizing ever since. To put it plainly, and directly from the mouth of Liz Mullen at SportsBusinessJournal.com:
[CSMG] has terminated its CEO, laid off several employees, saw its founder step down as chairman of the board of directors and has a signed separation agreement with one of its major NFL player agents [Big changes at CSMG].
The founder/chairman is Alan Nero. He says that he has stepped down voluntarily. Who knows? What is certain is that CSMG wants to spare itself from any bad press.
Here is a little bit of what I was able to dig up. Apparently, Michael Hall (the terminated CEO) had a difference of opinion with Alan Nero. Hall wanted CSMG to become more marketing based, focusing more on the endorsement side of the business of sports. This is understandable if you think about the fact that Hall had more than 20 years of experience as an advertising executive at Leo Burnett prior to joining CSMG. The problem is that Nero did not follow Hall’s theory. This was one area of tension. In addition, CSMG has been investing a lot of money on grassroots projects lately with little return on investment.
Basically what we have here is a situation where there is a lot of money being spent on projects that aren’t amounting to anything while the company is split over whether to focus more on contractual negotiations or marketing deals.
With all this being said, the company hopes to remain as an important entity in the athlete representation business. They will be hiring more agents, looking for a new CEO, and trying to acquire new clients.
One thing that should really hurt CSMG is the departure of agent Kennard McGuire. He will be creating his own agency, and it will be interesting to see how many of his roughly 17 clients leave CSMG with him. If a majority of them leave with McGuire, it could substantially hurt the company.
-Darren Heitner
5 Comments
Can McGuire expect a lawsuit if the majority of his 17 clients leave CSMG to go with him? I know this happened in a similar case a couple of years back with a big NFL agent.
Some guys like McGuire have clauses in their contract that if certain execs leave the parent company, they can walk as well and take all the clients they wish.
Tom Condon had a clause in his at IMG that allowed him to walk and take every IMG client with him.
McGuire could be sued, but it wouldn’t stop him from taking clients, or clients following him.
I wonder if Fletcher is going to leave as well, Ken and Fleth were very close and I couldn’t see one leaving and one staying.
after reading the sbj article on it, it looks like he can walk and take what clients he wishes. they mention, on several occasions that he has a “seperation agreement” which likely spells out the terms of what he can do and can’t do…
It seems that McGuire will be ok with his departure. I don’t think we will be seeing another Steinberg/Dunn situation
I’m interested to see if McGuire stays “independent” or signs up with a larger firm (maybe Blue like Segal?).
One Trackback
[...] little over a year ago, I reported on the internal struggles over at CSMG headquarters in Chicago, Illinois. The company was spending a lot of money being on [...]