SBJ/April 2-8, 2012/Marketing and Sponsorship

WMG receives $25M for minority stake

Sources say Casey Wasserman plans to use the investment to expand the company’s business overseas.
Photo by: MICHAEL GOOD PHOTOGRAPY
Editor's note: This story is revised from the print edition.

Wasserman Media Group has received an investment of approximately $25 million from Highbridge Capital Management, giving the New York-based private equity firm a minority position in the sports and entertainment company.

Wasserman plans to use the money for acquisitions and strategic growth initiatives, and sources familiar with the company’s plans say it’s particularly focused on expanding its business overseas.

The deal gives one of Highbridge’s funds, Highbridge Principal Strategies Growth Equity (HPSGE), preferred equity in Wasserman. Clifford Friedman, who oversees HPSGE, has become a director on Wasserman’s board.

Highbridge does not comment on its investments, and Wasserman Media Group CEO Casey Wasserman declined through a representative to speak for this story.

Sources familiar with Casey Wasserman’s plans say that he envisions using the money to expand the company’s business overseas, especially in Europe, Asia and South America. The company has been active in Europe for years and has set up offices in India and forged an alliance with a basketball agency in Brazil. Sources added that Wasserman’s vision for growth isn’t limited to overseas and said the company also will consider opportunities to expand domestically by adding talent agents or acquiring agencies.

JP Morgan has a majority interest in Highbridge Capital, which has $27 billion under management, and Wasserman has ties to JP Morgan’s most senior executives.

Under terms of the investment, Wasserman is able to buy out Highbridge at any time. He also has the ability to secure more funding under similar terms to the group’s initial agreement.

Highbridge is the first outside investor in Wasserman Media Group. The Los Angeles-based sports and entertainment marketing company was built primarily through acquisition and investment by its namesake, the grandson of Hollywood talent agent and studio executive Lew Wasserman.

Wasserman began buying sports marketing and representation agencies in 2002. His first acquisition was Jeff Knapple’s Envision Group, which specialized in naming-rights sales. That was followed less than a year later by the acquisition of Steve Astephen’s action sports agency, The Familie. He went on to hire former SFX Sports agent Arn Tellem and build out a stick-and-ball-athlete representation division with offices in the U.S. and Europe. He later acquired OnSport in 2007, giving the agency a foothold in the corporate and property consulting business.

Over the last decade, Wasserman Media Group rarely missed in its acquisitions. Knapple and Gary Stevenson, who founded OnSport, are no longer with the company, but Wasserman remains active in sales and sponsorship consulting.

As it grew, the company’s only real failure was its vision for a digital sports network called Sportnet. It formed in 2007 a programming and marketing partnership with USA Swimming, USA Track & Field and USA Gymnastics and planned to develop a series of websites that would show those sports’ competitions. Eventually, those plans were abandoned and Sportnet merged with GrindTV to create a digital network of action sports sites.

Staff writer Terry Lefton contributed to this report.
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