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The sum of the sale of David Falk's FAME to SFX on Monday could exceed $150M in cash and stock, according to Richard Sandomir of the N.Y. TIMES. SFX is paying $82.9M in cash, one million shares of stock (worth $38.75M at yesterday's close) and $15M over five years in "incentive payments" if FAME's cash flow hits certain levels. Other incentives could push the total over $150M. Advantage Int'l Chair Lee Fentress: "Now it'll be interesting to see who retires first, David or Michael [Jordan]." Sandomir reports that Falk will bring his "connections" to companies like Nike, Warner Bros. and WorldCom to SFX. Falk: "We can offer our young superstars like Keith Van Horn and Antoine Walker a way to build businesses without going outside to do it, and it gives us a way to buy companies that we didn't have before." Agent Leigh Steinberg said SFX's acquisition of FAME "highlights the synergy between Big Entertainment and Big Sports, to the extent that sports have become content and programming in a much larger world." Sandomir notes SFX's "next step" could be the acquisition of The Marquee Group (TMG), and writes that Falk "comes into SFX with stronger assets than anyone" at TMG, adding that Falk "could supplant" TMG President Bob Gutkowski "as the dominant executive under the SFX sports banner." Falk could also wind up "supervising" ProServ and his former boss Donald Dell. TMG acquired ProServ last year (N.Y. TIMES, 5/6).
Reebok Chair & CEO Paul Fireman told shareholders at the company's annual meeting yesterday that Reebok "has been less than I would hope for as far as sales and profits," and that "everything can be improved, including myself," according to Gregg Krupa of the BOSTON GLOBE. Fireman: "I believe that what we are experiencing today is a large bump in the road and not the death of an industry. We have now got, in my opinion, the best product line in the industry, and it has been heralded by most retailers as such." Krupa writes that a recent report on the "top-of-the-line" Reebok DMX 6 showed it outselling Nike's Air Triax by about three to one. Fireman said that Reebok's plan is to take "advantage of new strides in shoe technology and expanding markets" for its Rockport and Ralph Lauren footwear and the Greg Norman Collection of sportswear. Net sales of Rockport increased by $64.9M in '97, to $512.5M, including a 46% increase internationally. Meanwhile, Fireman said the Norman line is now one of "the top four brands in men's sportswear," and sales have increased by 35% in each quarter since the line was introduced in '92 (BOSTON GLOBE, 5/6). LITTLE PROTEST: The GLOBE's Krupa reports that "some stock analysts had suggested before the meeting that Fireman would face substantial criticism from some shareholders." When the meeting started, Reebok Investment Senior VP/General Counsel Barry Nagler announced the normal format had been changed. Nagler: "In response to shareholders, there will be more structure to the annual meeting to allow for questions and comments." But when it came time for shareholders to speak, only one "seized the opportunity." Gary Larsen of NJ asked Fireman to rate his own performance. Krupa: "So much for dissent" (BOSTON GLOBE, 5/6).
AGED BREW AD IRKS PARENTS: In Boston, David Arnold reports that a Boston Lager Beer ad on the outfield wall of a Little League park in Newton, MA, "has some parents crying foul." The 4-by-8-foot ad reads, "Our beer is carefully aged before drinking. You should be, too." Terry Sacks, the league president who approved the sign, said he considered it a PSA (BOSTON GLOBE, 5/6)....In Chicago, Patrick McGavin writes on the new Puma TV spots, which use six high school basketball players, under the header, "King Star's Commercial Raises Exploitation Issue." McGavin writes that for some, "the concept of young athletes as commodities is quite troubling" (CHICAGO TRIBUNE, 5/6). MAS MACHO POR NOMAR? In Boston, Larry Whiteside writes that the Red Sox "have not hesitated to incorporate" SS Nomar Garciaparra into "their considerable marketing efforts." Garciaparra: "If people enjoy looking at me and want to come out and see some games because I'm playing, that's great. ... As for the marketing, whatever. If it happens, it happens" (BOSTON GLOBE, 5/6)....Larry Walker has signed an endorsement deal with Acclaim Sports for its All- Star Baseball '99 (Acclaim)....The WNBA's Lisa Leslie signed a partnership agreement with Planet Hollywood to represent the Official All-Star Cafe. Leslie will make appearances, and be involved in ad campaigns/promos for the restaurants (THE DAILY)....The UK arm of Hitachi Seiki will use Jackie Stewart's name in advertising its tools, in exchange for providing a full-time consultancy service to Stewart's Grand Prix Racing (FINANCIAL TIMES, 5/5)....Pequot Tribe Chief Marketing Officer Byron Quann has "denied the Pequots would turn profits" off their $1.51M sponsorship of USA Boxing amateur bouts at Foxwoods Resort Casino. Pequot Senior VP/Marketing Bob DeSalvio, on a future relationship with any of the boxers: "Our business interest here is to provide our customers with first-rate entertainment. Obviously, if some of these fighters prove to be as successful as Ali or Leonard, we'll have satisfaction in knowing we were there to help" (JOURNAL-BULLETIN, 5/5)....USA TODAY's Michael Hiestand profiles Hiedi Howkins, an MIT graduate who will climb K2 next month. Howkins, who will be sponsored by PowerBar, is still looking for backing for the additional "bare bones" $26,000 budget for the four-person climb (USA TODAY, 5/6)....CNBC's Don Dahler profiled Spike Lee's ad agency, Spike DDB and reported that the agency "is still struggling to lose the urban-only label." Lee, on the first group of Spike DDB ads: "We developed a sports niche. I'm glad this happened. [People] can see us outside of just 'Spike Lee can only speak to the African-American consumer.' We think it's much broader than that" (CNBC, 5/5).
Four key Nike managers "have left or announced their plans to leave," according to Jeff Manning of the Portland OREGONIAN. Nike VP Sports Marketing Rudy Chapa, the most senior of the outgoing execs, "has told senior managers at Nike that he plans to leave." Nike Sports Entertainment President Ian Campbell "has told his staff that he's departing." Campbell is said the be planning to return to his native Australia, "perhaps to open a sports events management firm." Tom Fox, who serves under Chapa as Dir of U.S. Sports Marketing is also leaving. Former Nike Dir of Golf Marketing Rob Tallman left in early April. Manning: "Hard times have prompted much soul searching on Nike's campus." Nike CEO Phil Knight recently told employees, at "an emotional all-staff meeting in April," that he was "re- dedicating himself to restoring Nike's once-formidable momentum." Knight, at the meeting said, "I just have two words. I'm sorry" (Portland OREGONIAN, 5/5). THE SHOW THAT ENDS: Nike has "pulled out" of The Super Show in Atlanta "for at least one year," according to TENNIS WEEK. Nike Dir of Communications Lee Weinstein said that it "just didn't make business sense. It was a huge cost and we felt our resources could be better applied to regional retailers." Sketchers will take over Nike's 54,000-square- foot space at the convention (TENNIS WEEK, 5/7 issue).