UPDATE: A lawyer representing Ted Forstmann writes us to clarify that, while Forstmann is the Chairman and CEO of IMG Worldwide, he is not actually the designated agent or manager of any of its clients (including Roger Federer.)
Also, IMG’s sports division generates just 5% of the company’s profits.
However, as the head of a company that does business with and represents athletes, his involvement in gambling would still raise questions about the events those athletes compete part in. It’s that potential conflict of interest that should be avoided.
A bizarre lawsuit involving the head of the world’s biggest sports agency has revealed the surprising confession that he has placed large bets on his own clients to win sporting events. Should this ever be allowed to happen?
The allegations first surfaced last week after Ted Forstmann, the CEO of IMG, was sued by a former friend and colleague James Agate. The two have feuded in the past—with Agate even apologizing to Forstmann for attempting to smear his name—and many of the claims of the lawsuit appeared to be so outrageous that the whole thing was given little thought by the media. Forstmann called it a “shakedown.”
But in an attempt to refute the most damning allegation IMG may have inadvertently opened another can of worms. The lawsuit claims that Forstman used inside information from client Roger Federer to place a bet against Federer in a French Open final. IMG corrected that by stating that Forstmann actually lost $40,000 betting on Federer to win; as if that confidence in his client completely ends the matter.
But why is he betting on tennis at all?
Not only does IMG represent numerous other players on the tennis circuit, the company actually owns a piece of several of the tournaments. Not to mention the hundreds of other clients they control in numerous other sports that could all be affected by illicit gambling. They are as much a part of sports as the leagues are, yet a league employee would never get away with gambling on a sport he or she has a financial interest in.
Like the Pete Rose scandal, it doesn’t matter if Forstmann placed all his wagers legally or only bet on his clients to win. The mere hint of a corrupting influence is enough to call the integrity of sport into question. (If he only bets on Federer to win, what does it signal when he doesn’t bet on Federer at all?) And as with the Tim Donaghy situation or many other point-shaving incidents, being in debt to gamblers make sports figures particularly vulnerable to pressure to “assist” those trying to swing games in their favour.
You can be certain that Forstmann is not the only sports agent* (see update) to gamble on his athletes. They all receive inside information from their clients—that’s part of the job—but if they use it to furnish their interests instead of the client’s then they should not be allowed to represent athletes.
Unfortunately, regulations for agents are lax and nearly impossible to enforce. Just look at the way agent Josh Luchs and his fellow travellers flouted NCAA regulations without impunity. In order for both sports and gambling to co-exist and succeed, but the fairness of games has to be defended at all costs.
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