Court case illustrates value of sports personality’s image as an asset

Horizon was responsible for golfer’s travel, commercial activity, dealings with sponsors and financial affairs

   During 2012 McIlroy’s career continued on an upward trajectory and he won five tournaments. Horizon  landed a contract under which Nike was to pay $20 million a year to the golfer

During 2012 McIlroy’s career continued on an upward trajectory and he won five tournaments. Horizon landed a contract under which Nike was to pay $20 million a year to the golfer

 

The Rory McIlroy court case in Dublin illustrates the extent to which the golfer lives in a world where his image is an asset that is the subject of extremely lucrative commercial agreements.

In 2011, McIlroy was 22 and one of the world’s leading golfers. He had an agency agreement with International Sports Management (ISM).

Late that year Conor Ridge of Horizon Sports Management made a presentation to McIlroy in the golfer’s Belfast home and told him Horizon could “build his brand”.

An agreement signed soon afterwards was, in fact, between McIlroy and Gurteen Ltd, a Malta company which McIlroy says was at all times controlled by Horizon. Horizon says it was incorporated to deal in a discreet way with McIlroy’s affairs, among other things.

Horizon was responsible for the golfer’s travel and golf commitments, his commercial activity, his dealings with sponsors, his media and PR activity and his financial affairs.

The three-year deal gave Horizon the right to 5 per cent of McIlroy’s pre-tax golf prize winnings and 20 per cent of all earnings from sponsorship, appearance fees and other off-course activities.

During 2012, McIlroy’s career continued on an upward trajectory and he won five important tournaments. Horizon entered into negotiations with Nike and landed a contract under which the sportswear behemoth was to pay $20 million a year to the golfer.


New agreement
Horizon asked McIlroy earlier this year to sign a new three- year agreement, the terms of which, according to the golfer, included an entitlement for Horizon to continue to earn fees from the Nike deal after any potential conclusion of Horizon’s relationship with McIlroy. This second deal was signed by McIlroy in March 2013.

Meanwhile other deals were also being negotiated.

There were dealings with Creative Artists Agency, which acts for many leading sports figures in the world, including David Beckham and Cristiano Ronaldo. It and Horizon worked together on landing a lucrative deal with the audio equipment company Bose. A subsequent souring of the relationship with Creative Artists is blamed by McIlroy on Horizon.

Meanwhile the US sports equipment and sunglasses producer Oakley, which had a deal with McIlroy that had been negotiated by ISM, felt its rights under its deal with McIlroy had been ignored during the landing of the Nike deal and issued proceedings in California.

The case is still pending, but has cost McIlroy $1.5 million in fees to date, according to his filings in Dublin yesterday. The defendants are McIlroy and Nike.

McIlroy is disputing Oakley’s case but one of the claims made in the Dublin court is that if he fails in the US courts, Horizon, as his agent for the Nike deal, should be responsible for any costs and damages that arise.

McIlroy is seeking court orders cancelling “restrictive” and “unconscionable” representation agreements with Horizon and related companies on various grounds.


Negotiated deals
In a letter this month from Horizon’s solicitors to the golfer’s, it was stated that Horizon negotiated deals for McIlroy with Santander, Nike, Omega and Bose, the deals ran for up to five years and they totalled $129 million.

It also said McIlroy was in line to have earnings for 2013 of $13 million until Horizon came along and that as a result of its work, his earnings for 2013 were $50 million.

It claims that McIlroy’s case has caused Horizon significant reputational damage and that it would be looking for compensation from its former client.