IMG’s Ted Forstmann Talks Emerging Markets, College Biz & Gambling
With plenty of topics to talk about, we caught up with IMG’s chairman and CEO Ted Forstmann.
Darren: Yesterday, IMG announced that it acquired the rights for the All India Football Federation (AIFF),where you will radically overhaul soccer in India. It’s the second joint venture you’ve announced in India with a company called Reliance Industries – the last being basketball. How big of an upside is there here?
Forstmann: Their sport is obviously cricket, but we see this as if it’s the NFL in the 1930’s.
Who would have thought that decades later football would be bigger than baseball in this country?
We did some market research and found out that kids who were 25 years old and under like football, or as we call it soccer, more than cricket. And the leagues over there aren’t done well. There’s a lot to improve on. So we have 1.2 billion people to work with and are very optimistic. We also like this model. Previously, we did consulting work on the Indian Premier League (cricket) and built it to a $4 billion valuation within four years and, like what we did with Wimbledon, don’t get a piece of that. Here we have equity.
Darren: A lot of money has been thrown about in baseball in recent days. $100 million plus contracts that last for seven years in some cases. What does this say about the overall economy?
Forstmann: You never know who is right and who is wrong. Obviously there’s a lot of people that have one point of view that the outlook is good. And the way they are behaving, you can at least say they better be right about what they think.
Rovell: IMG College’s acquisition of ISP Sports was approved by the justice department recently, which means you’ll be the official agency for about 75 schools in the media and sponsorship space. How big of a business is this going to be for you?
Forstmann: We have a large and rapidly growing presence and in the next couple years, our IMG College business is going to be bigger than what all the rest of IMG put together is now. It’s a very scalable business and there was a need to be filled. Now, we obviously paid schools hundreds of millions of dollars in guarantees for their rights. But this is a huge win-win. We think we can make money and the colleges will be making more money than ever before to spend money on stuff like buildings and labs. The business also doesn’t go through much turmoil as the demographics are terrific and the alumni love their schools.
Darren: Earlier this week, your name appeared on the Giving Pledge, which is a list of America’s wealthiest individuals that make a pledge to commit the majority of their wealth to philanthropy. How did this work out?
Forstmann: I’ve been doing this for years, I just added my name to this list. In my will, after I give to my kids, the rest of it goes to children’s charities around the world.
Darren: We can’t finish this interview without talking to you about the recent stories about you and gambling. You acknowledged to betting $40,000 on your client Roger Federerto win the 2007 French Open and, at least according to a lawsuit against you, there’s other evidence you bet on other sports that IMG has a big interest in, including college basketball. Both the ATP and the NCAA have said you did nothing wrong. What do you have to say about this?
Forstmann: I’m essentially a target of a guy who is trying to get money from me. Many of his facts are not right. I did place bets. Very modest bets. I’m not a big gambler. If I showed up in Vegas, they wouldn’t even pay for my wine. The direction some media members have taken with the betting on my own clients, that’s garbage. The governing bodies have looked into what happened and uniformly said stop what you’re doing, but you haven’t done anything wrong. I placed my last bet almost four years ago. We’ve instituted a no-betting policy at IMG – we’re not even doing office pools. Every Sunday in the New York Times you can see the spreads and the picks. The New York Post has them every single day. So what are we talking about here?
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