McIlroy paid €5m to agency in 18 months
Golfer thought to have split from Dublin-based Horizon Sports Management over its 20pc cut on certain earnings
RORY McIlroy paid out more than €5m in just 18 months to the Dublin-based sports agency he fired last week, writes Ian Mallon
Horizon Sports Management and its chief Conor Ridge were notified on Friday that the golfer had severed ties with the company, sparking what is expected to be a lengthy court battle between both sides.
The massive financial outlay – a fraction of what Horizon would have expected over the lifetime of the contract – was key to the twice Major winner's decision.
The contract with the 24-year-old is due to run until 2017, with payments to the management agency described by sources close to McIlroy as "very significant indeed".
McIlroy announced that he was leaving Horizon to join his newly created Rory McIlroy Incorporated agency.
It is believed that McIlroy was deeply unhappy with the contract terms, despite the fact he willingly signed the agreement with Horizon in the first place.
McIlroy feels that the agency earns too much of a cut from his earnings, up to one-fifth in commission on certain earnings.
"Twenty per cent commission made sense when sport management first became a profession in the early 1960s," a financial expert told this newspaper.
"Mark McCormack effectively started the business, back in the days of Palmer, Player and Nicklaus, and the total money was much, much smaller then.
"Roll forward 50 years and the picture is very different. the earnings capacity of a golfer like McIlroy is so enormous that a 20 per cent take is significant."
Since McIlroy signed with Horizon he has gone on to win a second Major, adding the USPGA title last year to his 2011 US Open.
He also signed one of the biggest deals in sports history when he joined Nike in a deal north of €100m, with that figure set to go up in accordance with further success on the golf course.
On Friday, McIlroy confirmed that "he has terminated his contract with Horizon Sports Management and that the details of the termination are in the hands of his legal team led by A&L Goodbody", who are based in Dublin.
The fallout looks set for the courtroom with Horizon likely to seek compensation for the loss of earnings over the next four years. Horizon signalled this in a statement: "Rory's decision to seek a termination of the management contract with Horizon is now regrettably in the hands of legal advisers."
The former world number one announced that his "business interests will from now on be managed by Rory McIlroy Incorporated" run by CEO Donal Casey, an actuary by profession.
McIlroy also announced that his media relations will be run by PR guru and well-known media commentator Terry Prone and her Communications Clinic team. Ms Prone's appointment is seen as a major development for the sports star whose personal life often dominates the media.
His relationship with former world number one tennis player Caroline Wozniacki frequently spills on to the news pages, with constant speculation about the state of the pair's relationship.
Ms Prone would not comment about her deal with the Holywood, Co Down, sports star, but she is seen as being a key part in the newly unveiled 'Team McIlroy'.
Horizon Sports Management insisted it had "achieved exceptional results for Rory in realising his commercial objectives".
It is the second time in two years that McIlroy has split from an agent, but this is set to be much more acrimonious than his break-up with Chubby Chandler in October 2011.
"Chubby was a father figure to Rory," a friend of McIlroy's noted this weekend.
"Chubby was the right man at the right time – a good golf manager. He just didn't get the global brand thing and didn't have the back-office machine to cope with the scale of Rory's career. It came to a natural end, tinged with sadness. The end of the Horizon relationship couldn't be more different."
Conor Ridge of Horizon has not returned calls and emails from the Sunday Independent about the size of the company's take from McIlroy's earnings.