Arnold Palmer, the storied golfer with the easy charm and fearless style who died yesterday at age 87, changed the game in the 1960s by broadening its appeal beyond country club elites. But he is also at least partly responsible for the creation of a multibillion-dollar industry that has enriched generations of professional athletes.
Forbes says that Palmer earned $875 million in career earnings – inflation-adjusted to $1.3 billion – that included prize money earned during his 52 years on the PGA Tour and Champions Tour, but the bulk of it came from endorsement deals such as the decades-long one he had with Rolex.
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The sports management and marketing industry with its lavish contracts and endorsement deals didn’t really exist before Arnold Palmer came ambling down the greens. In 1960 after he had turned pro, he and Mark McCormack, a friend from his brief college days, shook hands on an agreement that allowed McCormack, then a lawyer in Cleveland, to represent him.
McCormack soon signed up two other up-and-coming golfers who along with Palmer would one day be known as the Big Three: Jack Nicklaus and Gary Player of South Africa.
Had it not been for his friendship with Palmer, McCormack might never have formed International Management Group – now known as IMG – which became the most powerful sports management and marketing agency in the world. Palmer was the foundation on which IMG was built.
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The New York Times says McCormack helped Palmer become “golf’s first television celebrity athlete,” a role that the charismatic and telegenic golfer slipped into easily. Palmer’s annual income went from $50,000 to $500,000 in three years and later as much as $10 million.
Forty years later, IMG was representing Tiger Woods when he signed a $100 million endorsement deal with Nike, according to McCormack’s obituary in The New York Times. The company also negotiated a 10-year, $189 million contract with the Yankees for Derek Jeter.
McCormack, who also wrote the raging bestseller What They Don’t Teach You at Harvard Business School, died in 2003 at age 72. That same year, IMG was bought by financier Ted Forstmann. In 2013, following Forstmann’s death, it was acquired by William Morris Endeavor (WWE) and Silver Lake Partners for $2.3 billion.
IMG now operates in 30 countries; represents thousands of athletes, entertainers and celebrities; runs athletic academies and sporting events; and owns sports organizations such as the ultimate fighting brand UFC, which it bought in June.
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But IMG hasn’t forgotten its roots.
On the IMG website today, a message from WWE | IMG co-CEOs Ari Emanuel and Patrick Whitesell write: “Arnold Palmer set the standard for athletes in life and in business with his passion, charisma, and dedication. We will forever remember him as IMG’s first client and a man who profoundly shaped the modern-day sports industry.”
