Rory McIlroy has been hailed as golf’s Golden Child and the natural successor to Tiger Woods but while he announced yesterday that he has officially terminated his contract with Horizon Sports Management and become “Rory McIlroy Incorporated” (RMI), there are still troubled waters ahead for the former world number one in the form of a legal battle with his former agency.
A golfing prodigy since the age of two, the 24-year old from Holywood in Co Down enjoyed a meteoric rise to the top of the sport that has not been without its share of spectacular speed bumps. From now on the man who gave him his first club, his father Gerry, will sit on the board of his son’s new management company - a role similar to that carried out by the father of Masters champion Adam Scott, who has also moved away from formal management to look after his own affairs.
McIlroy is certainly not afraid to take chances and take his destiny into his own hands.
Just over two years ago, he won his first major by eight shots and then shocked his veteran British agent Chubby Chandler just five months later by announcing in an airport lounge that he was dumping him to join boutique Dublin agency Horizon Sports Management after spending he first four years of his career with the former journeyman.
The Horizon deal appeared to be a partnership made in heaven as McIlroy went on to become Irish golf’s first world number one, capturing his second major title by another staggering eight stroke margin at last year’s US PGA. Nothing could go wrong, it appeared. In January has signed a deal with Nike Golf reportedly worth more than $20m a year.
Described as “headstrong” by those who have dealt closely with him over the years, McIlroy has belied his boyish looks by taking as series of ruthless decisions during his short career.
Deciding midway through this season that he needed to take ownership of his own affairs entirely, he cut ties with Horizon Sports almost entirely, poaching a member of its staff to handle his day to day affairs before making his decision to go his own way public yesterday.
It’s a decision that could cost him a sizeable chunk of his huge fortune — conservatively estimated by Forbes Magazine at around $30m last year.
The deal with Horizon was believed to have at least another three years to run and following the lucrative endorsement contracts Horizon generated for the 24-year old Holywood star, the matter is now in the hands of lawyers.
Apart from his huge Nike deal, he has other contracts with the likes of Bose, Omega and Santander, and Horizon will seek financial compensation through the courts if an agreement cannot be reached between the lawyers for both parties.
“Under Horizon’s management, Rory has signed some of the most lucrative endorsements in sports history,” Horizon said in a statement, its founding members all in the US for Graeme McDowell’s wedding, which takes place today.
“The current management contract has a number of years to run. Rory’s decision to seek a termination of the management contract with Horizon is now regrettably in the hands of legal advisors. Horizon will be making no further comment.”
In other words, compensation will be setting in. How much Horizon will sue McIlroy for is unknown as yet but Oakley, who were McIlroy’s eyewear and apparel sponsors before he made the move to Nike, unsuccessfully tried to sue the Ulsterman and Nike for a reported $100m earlier this year.
Industry sources, who did not wish to be named, estimate that it could cost McIlroy considerably more than $6m to walk away from the Horizon deal. For the peace of mind it, it will be money well spent.
Following his meteoric rise to world number one last year, McIlroy has endured a horrific 2013 season since he changed equipment in January and joined Tiger Woods in the Nike Golf stable.
His apparent unhappiness with Horizon surfaced soon after he walked off the course after completing just 26 holes in the Honda Classic in March. Playing poorly, he confessed initially: “I’m just not in a great place mentally.”
Within 30 minutes his reputation suffered a blow when his management company issued a statement insisting he was suffering from wisdom tooth pain.
McIlroy was forced to make a public apology the following week and admit that his tooth was not the real reason for his walk out. Things have not improved for him on the course since then and having won five times last year, he has not registered a victory for 12 months. His relationship with the Danish tennis player Caroline Wozniacki and his equipment change have been blamed for his slump.
But McIlroy refutes both arguments, saying he simply didn’t play enough early in the year to find form and then put too much pressure on himself to produce results. A dinner chat with Roger Federer in Brazil earlier this year, which focussed on management issues.
“He’s a role model, someone I can pattern myself after,” McIlroy told the New York Times in March. Federer and his long-standing agent Tony Godsick both left IMG last summer and set up on their own.
The upshot of it all is that he will be a conspicuous absentee from his former Horizon stablemate McDowell’s wedding in the Bahamas today. After all, his former management company will all be there and the break up has been less than amicable.
Instead of enjoying the wedding build up in Florida, he’s spent the week in Dublin’s financial quarter, where his legal affairs now in the hands of A&L Goodbody, who declined, through consultants ReputationInc, to comment on any potential law suit from Horizon.
He is as much a corporate entity as the famously aloof Woods right now with his PR affairs in the hands of Terry Prone’s company The Communications Clinic, whose clients are blue chip companies, captains of industry and politicians.
He will have at least two former Horizon employees on his payroll with Horizon’s former Director of Strategy, 45-year old actuary Donal Casey, a native of Athy in Co Kildare, acting as CEO.
Mr Casey, who was at Irish Life Corporate Business for 22 years before acting as CEO for financial consultant Aon Ireland for nearly four years. He then joined Horizon as Director of Strategy in September 2011, leaving just before Christmas last year. His LinkedIn profile says his skills include “Making the complex simple.” (Click here for a political blog on Casey’s style.)
Ironically, he was the man who gave Horizon its first major endorsement break in the form for a multi-player deal for its small stable in 2005 when he was at Irish Life.
The Rory Foundation for charity will be run by family friend and Holywood native Barry Funston, who left his role as a successful executive for an Irish oil company to take charge of the Rory Foundation last May. McIlroy’s father Gerry will also serve on the board of “Rory McIlroy Incorporated.”
(Click here for Barry Funston’s views on McIlroy and his vision for the Rory Foundation.)
Donal Casey. Given the youngster’s troubled year, a quick, out-of-court settlement with Horizon might finally bring him some peace of mind — something he has struggled to find all year — and allow him to do what he does best.
Clearly taking a leaf out of the book of sportsmen such as Scott or tennis players Rafael Nadal or Roger Federer (all manager their own affairs) McIlroy simply wants more control with a smaller team of trusted advisors around him.
Winning the right to take all his own decisions with little interference will come at a cost and it remains to be seen if it will prove to be the right move. Given the contractual/legal complexities and the sums of money involved, the matter is set to run and run.
The word on tour is that McIlroy has huge plans and he’s not afraid to make mistakes.
“Be patient,” we have been told. “Rory is very ambitious and this will be done right.”