A lawsuit accuses the billionaire dealmaker of racism, escort use, and gambling against his client, Tiger Woods. Lies, Forstmann tells Charlie Gasparino exclusively, from a “shakedown artist.”
In more than 30 years as one of the world’s top dealmakers, Teddy Forstmann has made many brilliant bets—his stance against junk bonds in the 1980s, Gulfstream Aerospace in the 1990s, calling the credit crisis in 2008—and like any Wall Street veteran, more than a few clunkers.
But one of his worst calls, he says, involves a friendship with a man named James Agate. Forstmann says that decision is now costing him dearly—not necessarily in money (yet), but in reputation.
Agate filed a lawsuit in Los Angeles County Court in September accusing Forstmann, who now runs the sports management giant IMG, of breaching a previous agreement to steer business Agate’s way. But that isn’t what has Forstmann so concerned. Rather it’s salacious allegations leveled by Agate: Forstmann had a massive and nasty gambling habit (wagering millions over the years), he was dipping into IMG company funds to pay off loses; Forstmann bet against IMG’s clients, including Tiger Woods; Agate helped procure escorts for Forstmann; and Forstmann, who has adopted two African-American children, is a racist, and often referred to Woods as a “shvartze,” a dismissive Yiddish term.
In a wide-ranging interview with The Daily Beast, Forstmann denied all the allegations, and vowed revenge against Agate, whom he called a “stalker,” a “shakedown artist,” and a “scumbag lowlife.” But as Agate’s charges have made their way into the press, Forstmann has had to defend himself before clients, particularly those of IMG, which represents superstars such as Woods and Roger Federer, both of whom Agate tied to Forstmann’s alleged gambling habit, and with foreign government officials. (IMG is looking to strike deals in countries such as India, where government officials are queasy about all the controversy, Forstmann says.)
“At first this was an annoyance,” Forstmann told The Daily Beast in his first public remarks on this feud. “But now the sheer madness of it all is having an impact on my business. By the way, I didn’t even know what shvartze meant before all this came about. Can you imagine I adopt two black kids without a wife and I’m a racist? (Forstmann, a lifelong bachelor, is now dating celebrity chef Padma Lakshmi.) That shows he’s really insane.”
Forstmann said says he met Agate around 15 years ago at a country club through his brother Nick, and as both are avid golfers and tennis players, they developed a friendship.
Agate, for his part, referred all questions about the lawsuit and Forstmann’s charges to his attorney, who didn’t return calls for comment yesterday.
But along the way, the friendship took some interesting turns. Forstmann said he tried to help Agate’s printing company get new business (“I had connections but they didn’t go anywhere because his company is a piece of shit,” Forstmann told me), and when Agate’s business began to founder, he says he unsuccessfully tried to help Agate in a related investment.
Agate in turn helped Forstmann indulge in a hobby the dealmaker admits he has had since his college days—sports gambling—mainly by placing bets for Forstmann through offshore bookies. And that’s where Forstmann’s relationship with Agate took a dangerous turn. Fortsmann, for his part, concedes he wagered bets through Agate, but only in the thousands of dollars, a small fraction of his net worth, rather than the millions Agate alleges. “My lawyers tell me I made more than $80 million over the past eight years,” he said “As for my total net worth, you can check Forbes 400.” That list of the world’s wealthiest people shows Forstmann to have a fortune of more than $1 billion.
“Can you imagine that, I bet a few bucks on sports” during that time, Forstmann added with a laugh.
As for the lawsuit, Forstmann says it’s Agate’s attempt shake him down—a campaign that he said began about five years ago and one that he can verify with emails that Agate sent to him when his friend’s finances reached rock bottom. Forstmann said Agate told him that he felt he should have done more to help him get business for his printing company and a piece of the related deal.
Meanwhile, Forstmann added that the current lawsuit isn’t the first time Agate has challenged him in court. A similar lawsuit was dismissed in 2008, Forstmann said, based on lack of evidence. But because it didn’t contain some of the graphic details as this one, it made few headlines
“I told my lawyer that I now want Agate in jail for extortion,” Forstmann said, adding that his legal advisers have approached law-enforcement officials in Los Angeles on the matter. (He has not yet filed a countersuit.)
Yet Forstmann’s threats haven’t seemed to deter Agate, who recently turned up the heat several more notches, Forstmann said, by releasing information including phone records to TMZ, the celebrity/gossip television magazine, that Agate said shows how Forstmann lost nearly $100,000 betting that Roger Federer would beat Rafael Nadal during the 2007 French Open. Both were IMG clients and Federer lost the match, but Agate claims in his lawsuit that Forstmann bet on Federer based on inside information stemming from a conversation the two had before the match.
“I might have called Roger before the match in 2007,” Forstmann told me. “But Roger is a buddy of mine and all I would be doing is wishing him luck. How is that insider information?… Now somehow or another, I’m fixing the match.” Forstmann added that he lost $40,000 betting on Federer. His press aide Mike Sitrick told me that the phone records released by Agate “may be bogus.”
In terms of betting against Tiger Woods, one of IMG’s biggest clients, Forstmann said he can disprove Agate’s allegation. Woods, he explained, was playing Vijay Singh at the Masters, and he placed a bet through Agate on Singh because Singh was a personal friend.
“This guy is making it sound like I’m betting against Tiger Woods,” Forstmann said. “Vijay is my friend for many years and I bet maybe $5,000 on him winning the Masters. It was a 15, 20-to-1 shot and I would have felt like a genius if he won.”
Forstmann certainly isn’t feeling like a genius for befriending Agate. “All the agents are calling me, and Roger’s lawyers are calling me telling me that match fixing is the worst thing you can be accused of in tennis, and it’s all a lie,” Forstmann said in an interview. IMG’s business increasingly involves developing sports franchises overseas, and marketing collegiate sports, where the people he has to deal with “are like priests and now they’re asking me if I bet on March Madness.”
In addition to working with his lawyers, Forstmann said he has reached out to friends for advice. One of those was tennis great Monica Seles, who was the victim of a stalker. She was nearly killed when an obsessed fan stabbed her with a knife, greatly damaging her career.
“She told me the guy is crazy,” Forstmann added, referring to Agate. “And the only way to describe why the guy is doing this is because he has a wire crossed.”
Charlie Gasparino is a senior correspondent for Fox Business Network. He is a columnist for The Daily Beast and a frequent contributor to the New York Post, Forbes, and other publications. His latest book, Bought and Paid For, is about the Obama administration and Wall Street. This article originally appeared at The Daily Beast and is republished here with permission.