Another senior executive has exited the sports marketing giant IMG, and gossip is rife that the $2.4 billion agency now run by WME’s Ari Emanuel and Patrick Whitesell is a “slow-motion car crash,” as one former executive put it.
David Abrutyn, a 15-year veteran of IMG and their global head of consulting, announced last week that he was leaving the agency “to pursue the next opportunity in my career,” with no further explanation and no word of a successor.
That came on the heels of abrupt exit earlier this month of CFO Peter Klein — just two months officially into his job — a key executive who brokered the financing of the $2.4 billion deal between WME and Silver Lake Partners to buy IMG.
A spokesman for WME-IMG confirmed that Abrutyn would leave in August, but denied there was anything but normal growing pains in the newly configured company.
“After only two and a half months, we are happy with where the company is financially,” said a spokesman. “We’re focused on supporting our clients, growing our business and putting the right teams in place to lead this company in the years ahead.”
Schadenfreude is a common emotion in Hollywood, and there is plenty of it to go around for the likes of Ari Emanuel, whose frontal-assault approach makes for naysayers.
But the insiders and knowledgeable observers who spoke to TheWrap were focused on hard numbers and whether WME-IMG would be able to handle the stunning leverage it took on when the smaller talent agency swallowed the sports marketing giant in December.
One insider told TheWrap that the all-important college division would be off its estimated revenue by $15-$20 million this year. The division lost a multimillion-dollar contract with the University of Kentucky this month, and IMG is scrambling to reverse another canceled contract with Syracuse.
An executive at WME-IMG denied this, saying that the division was on track to hit its numbers. He said the agency closed 60 partnership deals in June, one of their best months.
The insider said the entire company was unlikely to hit the $82 million in profit (scaled back from an earlier estimate of $105 million) promised to banks that loaned them money. Klein was said to be concerned by this, especially since the promised cost-cutting of $150 million does not appear to be underway. The IMG executive declined to comment on this.
Abrutyn, who joined IMG in 1999, ran the agency’s corporate consulting business, which encompasses 150 employees across 20 countries. His area is likely to be taken over temporarily by IMG Sports and Entertainment President George Pyne, but other insiders tell TheWrap that Pyne is also headed for the door by the end of the year.
“He is the dam break between Patrick (Whitesell) and Bill Sutton who runs the college division,” said the insider. “The feeling is George will leave by the end of the year. He’ll want to get out ahead of the bad news.”
The WME-IMG executive countered that Pyne will continue in his current role.
The core issue is whether Emanuel and Whitesell — consummate salesmen who successfully built the dynamic William Morris Endeavor — have the experience and management gravitas to operate a global sports company with very different lines of business from WME.
All of this will become apparent at the end of the year when the numbers come out. Whether naysayers are merely “stirring the waters,” as WME-IMG says, or whether Emanuel and Whitesell are in over their heads will show at that time.
“If I were Silver Lake and the CFO lasted 60 days, I’d be sweating bullets,” said the insider. With the cost involved, the insider added that an IPO to raise more capital is inevitable.
Said one former executive: “It’s like watching a slow-motion car crash.”
Time, as they say, will tell.