It's Nothing Personal--Honest IMG went to court when Jeff Schwartz took his leave--and star tennis clients
So much for the notion that pro tennis lacks a heated rivalry.
Last month, in a scene straight out of Jerry Maguire, Jeff
Schwartz, the agent for three of the world's most prominent
players--Pete Sampras, Marcelo Rios and Martina Hingis--called
his bosses' offices at Cleveland-based International Management
Group (IMG) and announced his resignation. After working at the
high-powered sports and entertainment marketing firm for more
than six years, Schwartz said, he was eager to open his own
sports law firm in midtown Manhattan. Oh, and one other thing:
He might be taking Sampras, Rios and Hingis with him.
Without wasting time, IMG filed suit in federal court in
northern Ohio charging Schwartz with fraud, misrepresentation
and unfair competition. The firm also filed grievances against
Schwartz with the New York and Connecticut bar associations,
where he's a member. "He was given confidential information
about the company and betrayed our trust," says Bob Kain, the
longtime head of IMG's tennis division. "We trained Jeff and
gave him his clients--it's not like he recruited Pete--and this
is the appreciation we get."
Responds Schwartz, "I'm completely comfortable with what I did.
The lawsuit is just a lame effort to discourage clients from
retaining me."
At the heart of the contretemps is a noncompete clause in
Schwartz's original employment agreement with IMG, which he
signed in 1992. For a period of two years after his termination,
the clause stipulates, Schwartz may not "directly or indirectly
solicit or represent...a client with whom [he] had dealings
while [he was] associated with IMG." Schwartz, 35, maintains
that he is not bound by that agreement because he is starting a
law practice, not a sports management company, and, therefore,
is not in competition with his former employer. IMG, not
surprisingly, contends this is a thinly veiled attempt to
circumvent the agreement. The dispute over the noncompete
provision will go before an arbitrator later this year, while
IMG pursues its other charges in the lawsuit.
Although IMG represents hundreds of clients, ranging from Tiger
Woods to violinist Itzhak Perlman, the defection of Sampras,
Rios and Hingis--all have sent letters to IMG terminating their
business relationship, though Hingis hasn't yet decided to
follow Schwartz--nonetheless is serious. "No question, it would
be a loss," says Kain.
It's not hard to see the motivation behind Schwartz's gambit,
either. Even if he has to farm out certain services, such as
marketing, he stands to reap exponentially more than the roughly
$250,000 he was paid by IMG last year.
Amid the bickering, Schwartz's clients are standing resolutely
by their man. Sampras--whose older brother, Gus, is employed by
IMG as an account executive--released a statement on March 1
expressing "dismay" that IMG has taken legal action against "my
friend and trusted advisor" and vowed to continue to retain
Schwartz as his legal counsel. Rios expressed similar sentiments
last week.
"If they think I'm just going to roll over," says Schwartz,
"that's not going to happen."
Schwartz argues that he's starting a law practice, not a sports
management company.
