MUMBAI: Forstmann Little & Co has hired investment bank Morgan Stanley and Evercore Partners (EVR) to find a buyer for sports management company IMG Worldwide.
IMG Worldwide operates in the areas of sports, fashion and media, creating and managing events, organisations, celebrities and brands. Among other things IMG also manages the organisation of the Indian Premier League (IPL).
Reports add that potential buyers include Creative Artists Agency, William Morris, Lagardere and Guggenheim Partners. Closer home Mukesh Ambani is said to be interested and the price tag could be in the region of $2-3 billion. Right now Ambani already has a joint venture in India for IMG Reliance. Among other things the JV works with the All India Football Federation (AIFF) and the Basketball Federation of India (BFI). Also Ambani owns the Mumbai Indians IPL franchise.
The question is what impact a potential deal could have on the country? Percept joint MD Shailendra Singh feels that if this deal goes through it will be a moment of pride for the country. "It will be a moment of pride for India to have an Indian owning an iconic sports brand. But I don‘t think that it will impact the sports business in India much. The consumer has not changed. It is still about cricket and Bollywood. You have to also understand that the Ambani family is now enjoying sports. For Reliance $2 billion is petty cash."
In terms of IMG Worldwide among other things representing the interests of international sportspersons activity in this area will not affect India. "Ronaldo can be seen in many countries endorsing products. But do you see him in India doing that? To sell products you still need Shah Rukh Khan."
He also feels that if the deal happens it will be an investment deal like what Anil Ambani has with Steven Spielberg. "Reliance will let the IMG management run things. You don‘t see Anil Ambani advising Spielberg on the script to shoot," he adds.
Alchemist MD and promoter Manish Porwal said that he is not surprised at the development. "When IMG and Reliance announced their JV I always felt that they would not just let it be like that. They would find a way to make it grow and take it in different directions. There could be synergies between IMG and Mumbai Indians. You could also see IMG organising more events in different sports in India."
In terms of international sport stars and celebrities endorsing Indian products on a regular basis that according to him is still two to three years away from happening on a regular basis. "You have seen Michael Schumacher and Maria Sharapova endorsing Indian real estate companies. But these are one off deals. Right now there is a mismatch between the cost of an international celebrity and the fan following that celebrity has in India. Things will change in the coming two to three years. That is because more Indians will follow international celebrities. A point will come when companies feel that it makes sense to use them in India. Right now companies like Omega use international celebrities in India as a part of their global plan."
