Television

IMG at crossroads after IFW loss to Percept?

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The Indian arm of International Management Group (IMG), the global sports management conglomerate founded by the late Mark McCormack, seemingly stands at the crossroads today.This has been brought to bear even more starkly with the totally unexpected loss of the Lakme India Fashion Week (LIFW) to Shailendra Singh’s Percept D‘Mark.

For many in the industry, the demise of the event that marks the high point of India’s fashion calendar from IMG‘s roster also signals the end of the IMG decade as the dominant force in the sports and events management arena in country. That is an argument that IMG/TWI - South Asia managing director Ravi Krishnan dismisses outright though. Says Krishnan, "It is certainly incorrect to say ‘the demise of the event also signals the end of the IMG decade as the dominant force in the sports and events management arena in the country.‘ It‘s also important that I clarify that whilst LIFW was the highest profile event that IMG conducted, it does not, nor ever has, represented the most significant income stream for us."

Still, there is no gainsaying that the last decade has witnessed a number of highs and the road the company has traversed in the country illustrates that well. IMG TWI were already the world‘s leading sports marketing company when they arrived in India with the Hero Cup cricket - where television arm TWI broke national broadcaster Doordarshan‘s monopoly of cricket coverage.

In 1994,TWI negotiated on behalf of the Board of Control for Cricket in India (BCCI) a ground breaking exclusive contract with ESPN Star Sports for all Indian cricket for the next five years. They took the chance to establish an office in India, with an English football producer Peter Hutton moving to India to organize first domestic then international cricket coverage for ESPN.

Parent company IMG arrived in 1995, with American Dick Alford - an IMG veteran - in charge alongside Krishnan and an English lawyer Malcolm Thorpe. The next years saw an amazing growth, with TWI dominating the television sports market - producing live football and hockey coverage for Star Sports as well as the cricket for ESPN and IMG setting up a series of international events including the The Sahara Cup cricket, the Gold Flake ATP Open Tennis and the Wills Indian Open golf. The relationship with the BCCI continued to bear fruit as IMG-TWI negotiated the contract for Sahara to take over the team sponsorship of the Indian cricket team, while it found sponsors in Tata for the Indian Tennis Open in Chennai and Royal Challenge for Indian golf to take over the mantle when ITC moved out of sports sponsorship. The company diversified with TWI beginning daily news coverage for Doordarshan Sports and producing music events such as the Zee Cine awards, whilst IMG moved into the Lakme Indian Fashion Week and the Four Square Challenge Rafting. At its peak, IMG TWI employed close to 150 staff with offices in Delhi, Bombay, Bangalore and Chennai.

However, the rollercoaster lost quite a bit of momentum following a succession of departures in the last few years. Alford left for IMG Japan, Thorpe for IMG Hong Kong and Hutton for Ten Sports in Dubai. Incidentally, Thorpe left IMG Hong Kong and moved to Dubai where he joined up again with Hutton working on the Dubai Sports City project as well as his role at Ten Sports.

Golf head Rishi Narain left to set up his own company. Among the other top Indian executives who took the exit route were Navneet Sharma (he went on to set up Total Sports in India), Rahul Johri left to become head of sales at Discovery, while Rukin Kizilbash joined Ten Sports as its head of sales. There was also Jamie Stewart who left with Dhiraj Malhotra to set up the ICC’s commercial office in Delhi as too number of the TWI production staff who joined Hutton in Dubai.

Krishnan, is however, at pains to stress that the exits should not be seen as a problem unique to IMG but rather as a feature that many industries are experiencing as the Indian economy continues its explosive rate of growth. Says Krishnan, "Personnel movements have become a feature in many industries as the Indian economy continues to grow. Even in times when IMG was adding new properties to its portfolio, personnel changes were happening behind the scenes. It‘s simply a business reality in all industries.

"We have never been more confident in the capabilities of our personnel than we are with our existing team and will be adding to this team based on the forthcoming needs as we see appropriate."

Be that as it may, this period has certainly been less than smooth for IMG. The Indian team sponsorship contract ended as did the representation of the BCCI’s television rights to follow the Sahara Cup cricket being cancelled on an annual basis. The Indian Open Golf has been taken over by Nimbus and the Indian Open Tennis in Chennai lost Tata as a sponsor - with the Tamil Nadu government taking a leading role in the event.

What is the current status? Krishnan points out, "Two of the key properties in India are the Chennai Open and Scorpio Speedster search for a fast bowler (where Channel 7 have recently taken over from ESPN as the broadcaster) as well as various TV productions such as the ongoing Sunfeast Open, the historic Indo-Pakistan series among others. There are several large-scale properties both, on the events and on the television side that have been in the pipeline, most of which will come to fruition in 2006. These will more than compensate for any revenue loss from LIFW."

Indiantelevision.com also raised the issue of how the new management that is running IMG globally is viewing these recent developments in India. It needs noting that it was in early October 2004 that investment company Forstmann Little & Co bought IMG in a $750 million purchase that was completed this year. The buyout followed the

the death of the legendary Mark McCormack in mid-2004. Krishnan opined, "The Forstmann Little management has brought new thinking to our business and are very focused on India. They see much potential in a variety of our core businesses and in a variety of new areas where we can leverage our global strengths. Plans are afoot, but none that we can talk about right now."

Basically though, while LIFW was a big event, it is in television sports properties where the real money lies. Queried over what is being done to ramp up on that front, Krishnan says, "You are certainly right that television represents a key area of growth in the sports and entertainment industry. We too recognize this. In this context, one thing we have seen in the West is the demise of several companies in our business e.g. ISL, Sports World, and several others who paid exorbitant guarantees to compete in the sports and entertainment space and then realized both to their own detriment and to those that unwisely accepted these unsustainable sums, that they were indeed, unsustainable. It’s a lesson for all rights holders that sometimes the too-good-to-be-true deal is indeed too good to be true."

Point taken. But that still begs the question. How is IMG going to get back up on the radar in the television scheme of things without drawing back some of the professional expertise that has gradually seeped out of the IMG system in India?

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