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Yesterday it was reported that IMG Worldwide (IMG) Chairman and CEO Theodore J. (Ted) Forstmann passed away at 71-years-old.  The cause of death was brain cancer.  Forstmann will be remembered for his unique ability to invest in companies (including Dr Pepper and Topps), fix them up, make them immensely valuable, and then sell them to make big profits for himself and the investors who bought into his plan.  He was also a noble philanthropist who donated millions of dollars, mostly focusing on ways to benefit various classes of children.

For numerous years, dating back to when Mark McCormack served as Chairman of IMG (when it was referred to as International Management Group), the company was the staple of the sports agent world.  Throughout the company’s existence, it has represented some of the best football players (Peyton Manning), baseball players (Derek Jeter), golfers (Tiger Woods), and tennis players (Roger Federer).  When Ted Forstmann bought the company for $750 million, Peter Johnson was fired, IMG’s team-sports division was scrapped (Manning, Jeter, et. al. went elsewhere for representation in team contract matters), and some its top agents moved on to other agencies, most of whom ended up at Creative Artists Agency (CAA).

IMG reinvented itself under Forstmann to focus more on its media and entertainment services.  It did not take long for IMG profits to become much larger than they had been prior to Forstmann’s takeover in 2004.  Whereas IMG used to be most well known for its representation of athletes, it is now acknowledged for its success with IMG College (collegiate marketing, licensing and media rights), its joint ventures in emerging markets overseas, its fantastic events, and large licensing and consulting arms.

Forstmann graduated from Yale University and received a J.D. from Columbia University.  He is survived by his two sons Siya and Everest.  IMG asks, in lieu of flowers to Forstmann’s family, please consider donations to The Children’s Scholarship Fund.

Ted Forstmann Of IMG Passes Away At 71 Years Old from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The most thorough reporting that I found on the matter was written by Sharon Waxman and Brent Lang at TheWrap.com (although they need to catch up on the fact that Tiger Woods is no longer an IMG client – he left with his agent Mark Steinberg to become a part of Excel Sports).  They found that Mike Dolan made calls to important board members to discuss how kick Ovitz off of IMG’s board after it was found that Ovitz was trying to create an “executive committee” that management would have to report to, and may have also floated the idea that he was interested in purchasing IMG.  Management currently only has to report to Forstmann and Dolan.

TheWrap.com reported that a “knowledgeable individual” said the board voted 7-4 to get rid of Ovitz and that the board members planned on formalizing that decision this past Monday.  I have left a message with IMG spokesman Jim Gallagher to see if he can confirm that there was a vote, that it was 7-4, and whether or not the decision to kick Ovitz off the board was finalized on Monday.  I also asked whether someone will take Ovitz’s empty seat.  I am awaiting Gallagher’s response.

Internal Issues On The Board Of Directors At IMG from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

For a guard, Julyan Stone, has major issues shooting free throws (56.1% FT% in his senior season), but the University of Texas El Paso senior has shown progress in almost every other category over his collegiate career.  Over-sized for his position, at 6’7, Julyan averaged 7.5 rebounds per game in 2010-11, but he also managed to average 5.3 assists per game.  He is not a tremendous scorer, averaging 8.5 points in 36.5 minutes per game, but he seems rather balanced.  His field goal percentage has gone up from a dismal 34.1% in his freshman year to 51.0% in his senior year.

Giovanni Funiciello certainly sees promise in Julyan.  The President of GCF Sports Management has been retained by Julyan to be his agent of record for upcoming domestic or foreign opportunities.  Funiciello had Julyan train at IMG Academies in Bradenton, Florida prior to Julyan taking part in the Portsmouth Invitational Tournament.

Julyan Stone Hires Giovanni Funiciello For Representation from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Sports Business

• Congratulations to everybody on this impressive list [Forty Under 40: Class of 2011].

Baseball

• Great write-up on Roy Halladay’s relationship with his agent, Greg Landry of CAA [Trusted agent sharing in Halladay's happiness].
• Worthwhile to hear, especially if he answers questions [Scott Boras will be the keynote speaker at SABR convention].
• I wonder what Boras produced to influence the Nationals to sign Perez [He Wrote the Book on a Bust].

Football

• Will we see lawsuits filed by players who are not being paid workout bonuses? [Other players could file their own lawsuits].
• Agree with the title [NFLPA* should drop any efforts to attack NFL’s antitrust exemption for broadcasting].

Rugby

• Started for IMG and worked for some other agencies before starting his own [Mark Spoors, Founder of leading Player Management Company Big Red, talks about rugby, careers and Jerry Maguire].

Sports Law

• Why would you ever want to give your wife steroids? [Agent suspended 10 years for BALCO involvement]

Shabbat Shalom: Friday Wrap-Up (3/25/2011) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Stories about elite athlete training are everywhere.  The importance of the NFL Combine Testing and where guys prepared, Barry Bonds “trainer” Greg Anderson not testifying, and finishing the week with the Oregon Football program coming under attack for paying for recruiting services by “trainer” Willie Lyles begs the question: What role does a trainer play?

In the 80’s and 90’s, players in just a few sports had trainers in the off-season, and in other sports, a coach who may help them with their tactics and mental approach.  Two of the most famous trainers were David Leadbetter and Nick Bollettieri, whose innovative swing techniques helped accelerate phenom players through the ranks.  Individual sports were the pioneers for the paid “trainer”.

Trainers have now become influential pieces to major sports agencies growth like Wasserman Media Group and Boras Corporation, as well as “family” to many elite amateur athletes, the talented ones and the rich ones.  Facilities are opening in every city and town bearing the names of those with impressive client lists, as sponsorship dollars are following.

In the basketball industry, players are sometimes more loyal to their trainers than their agents.  In many cases basketball players are using “trainers” for skill, physical development, psychology, and in-season mentorship.  As we look into the future of shortened contracts, less signing bonuses money, bigger player pools, and performance based pay, what will the word “trainer” mean?  How will professional teams who employee these players handle “trainers”?  How will “trainers” be judged for their ideas, methodology and return on investment?

The players see value and like the consistency of someone that knows their body, abilities, learning style, and dreams.  The only money conversations are weekly or yearly fees. Training players is now a desired position with a healthy, sometimes enormous salary.  We also have a generation of young athletes that begin individual training at very early ages creating a near co-dependency on the concept.

In the coming weeks, I will be covering this emerging topic to help agents, families, and trainers with the history of the industry.  I look forward to your comments and questions.

Trainer: Scumbag or Savior? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Yesterday, I read a report that Ted Forstmann, Chairman and CEO of IMG Worldwide, has been been betting on tennis matches.  IMG represents some of the best tennis players in the world, is a part-owner of The Tennis Channel, and also is responsible for the organization and execution of many tennis events.

The information that Forstmann has placed bets on tennis matches involving his own clients, was made available based on a lawsuit filed by James Agate.  Agate alleged that Forstmann once bet against IMG client, Roger Federer.  The response by an IMG Vice President denied the accusation, but instead admitted that Forstmann bet on Federer.  The media has taken an interest in this response, asking if Forstmann should be betting on his clients at all, whether it be for them to win or lose a match.  There are claims that there is a clear conflict of interest for Forstmann to be betting on a sport where he has a vested interest in its overall success.  Additionally, many people note that tennis already has a gambling problem that does not need to get worse.

Ted Forstmann Of IMG Accused Of Making Wagers On Tennis Matches from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

For eight years, action sports icon Shaun White has worked with agent Mark Ervin and IMG. This was a successful and lucrative pairing that saw White become one of the most recognizable faces in sports, but like they say, all good things eventually come to an end. Last week, White dropped Ervin for the services of a team of agents at CAA Sports who will work to develop marketing partnerships, appearances and television, music and motion picture opportunities for the 23-year-old.

White is the most recognizable action sports athlete in the U.S. His Davie-Brown Index score (72.41) outranks fellow action stars Tony Hawk, Ryan Sheckler and Bam Margera. His awareness level, a 73.94, is comparable to New Orleans Saints quarterback Drew Brees and New York Yankees third baseman Alex Rodriguez. – Sports Business Journal

While with IMG, White compiled a list of high end sponsors that reportedly earned him more than $7.5 million a year. Companies like Burton, Ubisoft, HP, AMEX, and Target all signed up for White’s endorsement, and where it was applicable, gave him his own signature line, such as Target’s “White Collection.” Having a reputation for being selective in the endorsement process, these signature lines gave White the voice he asked his agent to provide him with. Between features on 60 Minutes, covers of Rolling Stone and ESPN the Magazine, and a few Olympic Gold Medals, Shaun White will try to build on the successes that his partnership with IMG brought him and take it to the next level with the more than capable CAA Sports team.

Though he is said to be looking into movies, music and TV, White’s competitive career is far from done. He is expected to compete in a third Olympics in Sochi in 2014. He also plans to continue skateboarding and already has committed to this summer’s Dew Tour Skate Open, June 25-26, in Boston.

Please post any questions or comments you may have and don’t forget to follow me on Twitter @ZachLipari.

On to the Next One: Shaun White from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

What I find most fascinating is the fact that sports fans actually care. ESPN has the most to lose – not the actual game of college basketball or football. As a network, ESPN has very few sideline reporters that have both beauty and brains – and knowing your stuff isn’t easy. Considering the demographic of much of the programming of the network, losing her could disappoint many (men) and possibly cost the network some viewers.

If EA does pull the plug on ESPN, it would take an entire team to figure out her next move. According to my sources and analysis, there are two possibilities other than ESPN.

1. With either FOX, CBS, or NBC – on NFL sidelines.
2. Transplant to Hollywood, with a similar role as with sports – possibly with Entertainment Tonight or a similar program.

As usual, money will be one of the deciding factors. If ESPN expects to keep her around – expect EA to get a pay day, to a large extent, an in-house promotion.

The challenge for her agent will be to structure the deal — providing the maximum payoff, but also in terms that allow her to partake in the NCAA Basketball Tournament – a desire she has expressed candidly. Jay Bilas has a similar arrangement between ESPN and CBS.

Concurrently, EA has also shown an interest in pursuing opportunities with the NFL, which may not be too far down the road.

For now ESPN’s parent company, ABC – with Dancing with the Stars, will toast her success with a gala of dance and cheer – a possible farewell tour for EA and her six year relationship with the network.

Will Erin Andrews stay with ESPN? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

IMG does not have a specific division for hockey, but it is experienced in marketing hockey players; it handled the marketing of Wayne Gretzky and Jaromir Jagr when they were in the NHL. IMG will look to expand on Ovechkin’s current endorsement portfolio which includes CCM, Energizer, Hair Cuttery, and Hockey Ink.

Ovechkin’s style of play on the ice and personality off the ice provide the foundation for incredible potential in product endorsements. On the ice, Ovechkin has scored some of the most impressive highlight-reel goals in the history of the game and still has energy to make the huge hits that hockey fans love to see. Off the ice, his personality is on display in interviews showcasing his contagious smile (interview starts at 2:00), love for the fun of the game, and pre-game antics which include racing a utility cart around the arena. The city of Washington D.C. fell in love with Ovechkin over the past couple years and it shows in ticket sales- the Capitals sold out all 12,000 season tickets this year.

What role did Ovechkin’s agent play in acquiring this marketing deal with IMG? Ovechkin’s representation is a roundtable that consists of his father, mother, financial adviser George Landa, and attorney Stephen Screnci. All decisions involving Ovechkin’s career are made collectively by that group. It would definitely be interesting to sit in on a negotiation involving all those parties, and they are obviously doing something right.

For a little insight on the negotiation of his $124 million contract which Alex and his mother conducted without an agent, watch this video at the 2:40 mark. You’ll notice the language barrier makes it hard for Alex to express in English exactly what he means, but IMG said it isn’t worried about that.

The Gr8est Since Gretzky? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

First up: Samuel Michael Keller v. Electronic Arts, Inc., NCAA, Collegiate Licensing Company.  The complaint was filed on May 5, 2009 in the United States District Court, Northern District of California.

Electronic Arts has created a long line of profitable games under the EA Sports umbrella.  For its games based on professional sports, it can use players’ names and their likeness by bargaining with the players’ association.  For instance, if EA Sports wants to put player names on Madden 2010, the NFLPA can assign those rights to Electronic Arts (for roughly $35 million per year, according to the lawsuit).  EA pays the NFLPA a fee, and all is said and done.  So, can’t Electronic Arts make a similar deal with the NCAA to use college athletes’ likenesses on games like NCAA Football, NCAA Basketball, and NCAA March Madness?  Keller is arguing that such a deal is illegal.

The claim being made is that NCAA bylaws (Bylaw 12.5), contracts, and licensing agreements (between Electronic Arts and the Collegiate Licensing Company) prohibit outside entities from using NCAA players’ names, pictures, and likenesses; however, the NCAA and Collegiate Licensing Company are doing absolutely nothing to deter Electronic Arts from using those names and likenesses.  In fact, Keller argues that the NCAA encourages the violation of its own bylaws, contracts, and licensing agreements, because in the end, the NCAA benefits from increased royalties.  In defense of EA, players do not have names attached when a consumer purchases the original game.  However, Keller claims that EA does not do enough to prevent gamers from uploading new rosters that include player names.  This sounds like a claim of vicarious liability that I believe will be hard for Keller to prevail on.

Keller wants to make it a class-action lawsuit on behalf of all NCAA athletes who have had their names and likenesses used without permission.  If your height or weight is not the same (or very close to the same) on the game as it is in real life, then sorry, but you’re left out of the suit.

Is EA’s replication of an athlete’s jersey number, height, weight, build, skin tone, hair color, hair style, and accessories (like wristband, headband, facemask, and/or visor) a replication of that player’s likeness?  That’s for the court to decide.  When you hit the sticks for a rivalry match between the Gators and Seminoles, can you easily tell that the starting Quarterback for the Gators is Tim Tebow based on his image alone?  Or are you only confirmed of that based on your prior knowledge that he is the QB for the National Champions?

Players’ names are left off of jerseys on purpose in an effort to avoid this type of litigation.  The NCAA and CLC may point to that and show just how many gamers go through the process of downloading the rosters so that the names are then revealed.  I do not believe that EA is contributorily liable for the actions of the consumers who download the rosters, because I cannot see how EA encourages the downloading of those rosters by any specific act.  However, perhaps EA is found to be vicariously liable.  It’s hard to say that EA does not have constructive knowledge that its consumers are actively downloading rosters.  But does EA directly or indirectly benefit from the action?  I would say that people are going to buy the games whether or not they can download the rosters.

The amount in controversy exceeds $5,000,000.  One would think that maybe the NCAA, CLC, and EA would take interest in this case.

Case #2: Edward C. O’Bannon, Jr. v. NCAA and Collegiate Licensing Company. The complaint was filed on July 21, 2009 in the United States District Court, Northern District of California.

The NCAA and CLC might take interest in this one too.  Electronic Arts breaths a sigh of relief…unless Keller’s suit is joined to O’Bannon’s.

Edward C. O’Bannon, Jr., also known as Ed O’Bannon, also does not like not getting paid when his likeness is used.  Like Keller, he has decided to file suit in Federal Court, and made it a class-action suit on behalf of all of his collegiate athlete brethren.  O’Bannon has a lot more fish to fry than Keller, though.  Not only is he upset with the NCAA for allowing the usage of his likeness on video games, but also on DVDs, TV, photos, memorabilia, and advertising in general.

O’Bannon is not only claiming that current student athletes have a right to royalty payments when their likeness is assigned or used by the NCAA.  He is also claimimg that former players control the right to use their likeness and former likeness, and that the NCAA should be prohibited from earning profits on players’ likenesses once they leave campus.  Additionally, O’Bannon claims that athletes transfer their name/likeness rights to the NCAA upon accepting a scholarship because they have absolutely no choice and are never told to attain outside legal advice before making the transfer.

O’Bannon believes that the NCAA has restrained trade in an effort to exploit former collegiate athletes and reap profits without making any type of royalty payment to those athletes.  This lawsuit has a little Antitrust zing that the Keller complaint seems to lack.

A little FYI – the Collegiate Licensing Company is a subdivision of IMG.  IMG is a conglomerate with a large sports representation practice in golf and tennis.

Another FYI – O’Bannon has some big guns on his side: Attorneys with solid track records in popular cases and Sonny Vaccaro.

At least these cases won’t prevent the release of future versions for Bulls vs. Blazers or Tecmo Super Bowl.  Yeah…like the Bulls and Blazers will ever be in the Finals again, anyway!

2 on 2: Sam Keller and Ed O’Bannon vs. NCAA and CLC (with EA on the bench) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules