With Forstmann Gone, IMG Unlikely to Stay Intact
Posted: 11/22/2011 1:55:30 PM by
Jim Andrews | with 0 comments
The passing of IMG chairman and CEO Ted Forstmann throws into question the company’s future in much the same way that the death of its founder Mark McCormack did seven-plus years ago.
This time, however, the scenario of a single new owner scooping up the company is an unlikely one, unless the Forstmann heirs place a more realistic value on the company than the private-equity pioneer and philanthropist himself did in the months before he died.
The word circulating through sports marketing circles for much of this year was that Forstmann was willing to part with IMG for somewhere between $2.5 billion and $3 billion, a valuation said to have been balked at by the large number of potential buyers approached—a group that included many usual suspects in the advertising/sports/media world.
According to some close to the company and/or in touch with prospective buyers, a more realistic price range for all of IMG would be between $1 billion and $1.5 billion. (They also claim that the company, while making money, is not quite as profitable as IMG executives have intimated.)
Those same sources speculate that a break-up of IMG would extract the most value, with buyers interested in individual pieces such as its TV, modeling and college football units—although pricing the latter could prove tricky given the probability that many of its deals are back loaded.
It will be very interesting to see how this all shakes out. Anyone want to speculate on who will end up with what?
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Filed under: college sports, agency