IMG Academy’s sunny, 600-acre coastal Florida campus churns out hundreds of college athletes annually. Ninety-two percent of graduates go on to play NCAA sports (as compared to less than 7% nationally), and nearly half of them compete at the Division I level. The more than 1,100 student-athletes at the boarding school are, however, only a fraction of those the IMG Academy serves. The school is like an octopus, with tentacles throughout the sports and education spaces, which is why it has thrived even amidst a pandemic when many—whether that be peer schools and colleges or even its parent company, Endeavor—haven’t.
While IMG Academy almost mirrors Endeavor’s own conglomerate composition, its financial situation does not. Endeavor secured a $260 million term loan in May to supplement an existing $2.8 billion loan, as reported by the Wall Street Journal, after tabling its planned IPO in September and taking COVID-19 related revenue hits. Endeavor’s $4.5 billion total debt burden hasn’t impacted the Academy, said Tim Pernetti, executive vice president of IMG Media & Events.
On the contrary, growth at IMG Academy was cited specifically in Endeavor’s SEC S-1 filing prior to its once expected-IPO as a contributing factor to revenue increases from 2017 to 2018. Revenue for 2018 increased $283.9 million, or 14.3%. Approximately $240 million of the increase is attributable to the sale of media rights, but growth in events and IMG Academy was among the remaining contributing factors to the remaining $40 million—and that was before the opening of the on-campus Legacy Hotel, after which the Academy saw an uptick in larger scale events. For example, the Academy hosted the CONCACAF Central America Women’s Qualifier in 2018 and is currently amid a massive undertaking with the WNBA—evidence that as the virus rages on, the Academy has continued that growth.
“We were in the midst of a typical year in January and February, and really bullish on a lot of the opportunities that we had in front of us,” said Pernetti, who is heavily involved in oversight of operations at the Academy. “The prep school was thriving—camps, events, everything else that naturally comes in. Like everyone else in the world, we had to pivot our business.”
In a typical year, the Academy can have a fully enrolled prep school, hundreds of athletes (youth and professional) training and participating in camps each week and host multiple outside events. With a little luck tied to its location (Florida has remained one of the most open states throughout the pandemic) and a multi-dimensional business model that gave them additional revenue streams to fall back on, IMG Academy was able to successfully pivot much of that normal business.
Year-round camps turned into the soft launch of virtual training offerings called IMG Academy+, planned to continue post-pandemic. The revenue-generating addition complemented the limited in-person offerings the school was still able to accommodate starting later in the summer.
“A lot of [who was able to operate and how] depended on where they were, where the virus was and what the government decided to do in either the local municipality or state government, so there was absolutely an element of luck so to speak,” said Princeton athletic director Mollie Marcoux Samaan, who spent 19 years with Chelsea Piers Management (which owns and operates two highly regarded amateur sports complexes similar to IMG’s non-boarding school athletics operations). “But when you have a more independent facility, as opposed to a college or athletic department or even a normal high school that’s part of a much larger entity, you can make very different decisions.”
As an example, Samaan cited IMG’s virtual training offerings. Creating an online program would take a college-level institution much longer and could be more limited given the NCAA hoops it would have to jump through, she said.
IMG also reassessed its events business, which usually bustles during the months COVID hit hardest. The Academy has hosted or managed more than 100 athletics events, including NCAA Track & Field Championships, NFL Rookie Camps, MLS Games and preseason training over the years. A number of options on the table turned into one massive undertaking instead as Bradenton, Fla. became home to the WNBA’s entire nationally broadcast bubble season.
“We probably had five or six outside events opportunities pre-COVID, and then naturally things got into a holding pattern,” Pernetti said. “But it was great because then we had the ability to get the WNBA deal done and provide more facilities, more infrastructure, to them. The campus is so massive that we could also start our camps and legitimately ensure [the WNBA] they were never going to see these people. That’s essentially the beauty of the way we’re set up.”
Though he declined to disclose the financials of the WNBA deal, Pernetti did say the decision was about more than revenue. He described it as an opportunity to start a relationship with “a league that is in a transformative and historic time,” and bring furloughed employees back to places like the hotel.
While camps ended in August and playoffs approach for the WNBA, normal NFL draft and combine prep programs that would’ve started in December or January are now starting early. “There’s a definite trend of college players considering already opting out of the season to train for the draft in combine programs,” Pernetti added, noting that four players are already in the Academy’s combine program for the fall.
Other sports team training offerings are also ongoing, all as the school has stayed open and operational. Students are back on campus in “pods,” sports are starting and a Johns Hopkins All Children’s Hospital partnership is helping make all of it possible as the Academy’s on-site healthcare provider, thanks to a deal signed in 2017. Revenues from tuition (which ranges from $45,000 to almost $90,000) remain intact, as do partnerships with Under Armour and Gatorade.
Meanwhile, many prep schools have had to close their facilities and pause other events, some postponing sports altogether as classes restart in altered form.
“Look, we host summer camps and rent out our facilities for use and do a pretty good business with it, but we don’t do it on the scale IMG does,” said one head of school at another private athletics-focused boarding school. “No one does, and especially not during a pandemic. They took the necessary steps [to stay safe] and are just big enough physically to make it all work.”
The boarding school is stunning in its breadth. Established in 1978 as the Nick Bollettieri Tennis Academy, the sprawling campus today also boasts the IMG Institute, a developmental center for athletes and working professionals alike, focused on maximizing performance, and 150-room Legacy Hotel, where WNBA players and staff are staying. The hotel provides accommodations for those visiting or participating in athletics events or camps—like the WNBA or the more than 100 teams that utilized IMG Academy in 2019, including more than a dozen professional soccer clubs, the NFL’s 49ers, Cardinals and Panthers, Florida State football and the entire Premier Lacrosse League. With more than 5,000 square feet of meeting space, the hotel has attracted companies like VISA, Marriott and Gatorade to hold corporate retreats there. Those gatherings, of course, are largely on pause, but that hasn’t devastated the Academy’s business.
“For a couple of years we have flirted with what can we do outside our four walls,” Pernetti added. “What we’re doing with the WNBA, some of the things we’ve done with distance learning and distance training—they’re all things that could be valuable outside of COVID.”