SBJ/April 8-14, 2013/Marketing and Sponsorship

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  • Pieces in place for IMG sale; who are the likely bidders?

    IMG College President Ben Sutton walked out of the opening panel at the IMG World Congress of Sports and made it 10 feet down the hallway of the Ritz-Carlton before an executive at a competing agency grabbed his shoulder.

    “What’s going on with the IMG sale?” the executive asked.

    “We’re in year nine” of Forstmann Little’s ownership, said IMG’s George Pyne, leading to his remarks that the company would probably be sold soon.
    Photo: GORT PRODUCTIONS
    The question came moments after an opening panel in which IMG Sports President George Pyne said the company would be sold in the next four to 24 months. The looming sale promised to be a topic of conversation in Naples, Fla., during the conference, but Pyne’s comments ensured it.

    “Forstmann Little has bought and sold 39 companies,” Pyne said. “They’ve held companies for less than a year, the average is five, the longest is nine. We’re in year nine, so I think it’s reasonable to say sometime in the future, somewhere between four and 24 months, something would happen.”

    But sources close to IMG and familiar with the company’s plans expect the sale to be completed on the short end of that. The goal is to begin an auction process in May, secure a handshake agreement by the end of the summer and close a sale by the end of the year. And they expect that sale to be an all-cash offer of more than $2 billion.

    “IMG’s been built into an attractive property from both a financial perspective and vanity perspective,” said Steve Horowitz, a partner at the sports investment bank Inner Circle Sports. “The new owner has an opportunity to grow a business based on solid financials in an exciting world, which should encourage a lot of bidders to look at the business.”

    The IMG sales process will be run by Forstmann Little, which is led by director Kathleen Broderick, and Akin Gump Strauss Hauer & Feld partners Mark MacDougall and J. Kenneth Menges Jr., who are managing the wind-down of Ted Forstmann’s estate.

    The first step will be to hire a bank. In late March, Forstmann Little spent two weeks meeting with interested bankers, and it plans to select a bank by late April. Twenty major banking and investment groups pitched to manage the IMG sale, including Goldman Sachs, Morgan Stanley, JPMorgan Chase and The Raine Group.

    Pyne said on his panel that the bank has one priority. “They have to execute,” he said. “They have to close.”

    Forstmann Little and Akin Gump want to sell the company in its entirety because it’s the quickest and easiest way to return money to the investors and trustees who own it.

    A sale of IMG has been expected ever since Forstmann Little acquired the company for $750 million in 2004. Speculation of a sale increased after the private equity firm’s founder, Ted Forstmann, died in 2011.

    INSIDE IMG


    The Assets

    IMG Academy

    Based in Bradenton, Fla., this 400-acre complex hosts more than 30,000 athletes a year who spend their weeks, weekends or summers training in tennis, golf, soccer, baseball, football, lacrosse, basketball and other sports. There’s also a year-round, K-12 school that prepares students who are training to be top athletes. Andre Agassi, Maria Sharapova, basketball’s Michael Beasley and soccer’s Michael Parkhurst are among today’s sports stars who trained there.

    Maria Sharapova,  once an Academy athlete,
    is now a client.
    Photo: GETTY IMAGES

    IMG College
    Though it’s one of the newest areas of the company’s business, it’s considered to be one of its strongest. IMG built the division by acquiring Collegiate Licensing Co. and Host Communications in 2007 and ISP in 2010. It has rights to more than 75 properties, including Georgia, Kentucky, Michigan, Ohio State and Texas, and two conferences, the SEC and the MAC.

    IMG Consulting
    The company has a staff of more than 125 people that provide sponsorship marketing advice to more than 50 corporate clients worldwide. Its roster of clients, which includes Allstate, British Airways, Coca-Cola, GE, Visa and others, spends more than $2 billion on sponsorships annually. The consulting group does everything from strategic planning and negotiation to activation and hospitality management.

    IMG Media
    The company distributes more than 21,000 hours of content from 400 events to broadcasters worldwide. It has offices in 21 cities on all seven continents. It also has video archives that includes classic Premier League matches, the PGA Championship, Wimbledon and a host of other events.

    IMG Fashion
    The company manages some of the biggest fashion shows in the world, including New York, Milan, London and Tokyo. It also has a consulting division and a licensing group that works with Vera Bradley and Perry Ellis. Its management division represents Kate Upton, Miranda Kerr, Kate Moss and others.

    Sports
    The company owns and manages a host of events across sports ranging from surfing to cricket and figure skating to tennis. The most high-profile properties it owns include the ATP Sony Open, the U.S. Open of Surfing and Smucker’s Stars on Ice. It also operates 15 PGA and LPGA events, and manages cricket’s Indian Premier League and the Chinese Super League, a 16-team soccer league. It recently invested in starting a pro basketball league in India.

    Talent
    The company largely withdrew from the talent representation business over the last eight years, though it still represents some of the biggest names in sports and entertainment, handling endorsements for Peyton and Eli Manning, Danica Patrick, Justin Timberlake, Taylor Swift and others.

    * * *

    The Investors

    There are a total of 15 investors. The two largest are the General Electric and Boeing & Co. pension funds. Other investors include state pension funds and large corporations such as JPMorgan Chase and United Technologies.

    Editor's note: This story is revised from the print edition.
    There are 15 limited partners that invested in Forstmann Little’s final fund, which bought IMG in 2004, and they had the option to force a sale of IMG after Forstmann’s death. But instead of forcing a sale, they last year extended the expiration of the fund until this June.

    The investors could extend the fund again, but that’s unnecessary if the sales process begins, and the trustees at Akin Gump are intent on selling the company and completing their dissolution of Forstmann’s estate. (They already have sold much of his art, property and homes.)

    Both the Akin Gump team and Forstmann Little executives believe IMG is well-positioned for a sale. Its earnings before interest, tax, depreciation and amortization (EBITDA) increased from $146 million in 2011 to $175 million last year, and are projected to exceed $200 million this year, according to sources familiar with its earnings.

    Much of the recent EBITDA increases have been provided by IMG College. The business, which was largely built through acquisitions between 2007 and 2010, recorded $65 million in EBITDA last year. But sources said the division also has more than $2 billion in financial guarantees for collegiate media rights over the next decade.

    In a credit opinion written last summer, Moody’s praised the company’s EBITDA growth and added that its annual revenue totaled $1.38 billion and its operating margins were 11 percent. Moody’s also said that IMG had $197 million in cash and generated good cash flow.

    “We’re a market leader in almost every business we’re in,” Pyne said during the panel. “We’ve had three years of double-digit earnings growth, and the company is in good shape.”

    Pyne said the executive team at IMG will continue to manage the company. He didn’t say whether they would be involved in the sale.

    Mike Dolan, IMG chairman and CEO, has already met with potential buyers to gauge their interest. Industry sources, who declined to speak on the record because of the sensitivity of the sale, said Dolan had met with people from agencies such as CAA, William Morris Endeavor and MP & Silva; private equity firms; and the Qatar Investment Authority, a sovereign wealth fund that explored buying AEG.

    Sources said that Dolan didn’t have permission from Forstmann Little to have those conversations and has been told to stop having them.

    The agencies Dolan met with and others will have to weigh whether they could absorb all of IMG and afford the company’s $2 billion price tag.

    The company’s corporate consulting and event businesses could benefit CAA, and its media business might boost MP & Silva’s bottom line, but it’s unclear if those agencies would want the fashion, college or academy businesses. It’s a complicated purchase that each will need time to consider.

    Financial experts said private equity firms are more viable as buyers because they have the capital necessary to stomach the $2 billion cost, but they will have to determine if it’s an investment worth making.

    “These companies are sitting on $1 billion, $2 billion or $3 billion that they must spend,” Horowitz said. “Every private equity firm with an interest in sports and entertainment has to look at it. That doesn’t mean they need to buy it, but they must look.”

    But most observers expect a wealthy individual to buy the company, someone who is eager to get into sports and sees a value in the business. IMG has forged joint ventures over the years in Brazil and India in order to prime two potential buyers, Eike Batista and Mukesh Ambani, respectively, among the wealthiest men in their countries. Other wealthy individuals, such as former Yahoo Chairman and CEO Terry Semel and business magnate Ron Burkle, have expressed interest (see related story).

    “It will be hard to find the right people to buy the whole property,” said Donald Dell, who founded IMG’s former competitor, ProServ. “There are only eight or nine people in the world who can buy it at the price they want.”

    Dell thinks that the $2 billion price tag is so high that Forstmann Little will be forced to sell the company in pieces. “I just don’t see how else they can get the price they want,” he said.

    Another possibility is that an agency or private equity company buys all of IMG and then sells off various assets of it. But that strategy holds serious tax implications for the buyer that may make that strategy cost prohibitive. If a company paid $2 billion for IMG stock, which is what Forstmann Little will be selling, and sold the IMG Fashion business for $100 million, it would have to pay a 35 percent tax on its $100 million and another 20 percent tax if it paid a dividend to shareholders from the sale.

    “The key part about buying it just to sell it is that it’s very expensive,” said Robert Honigman, a tax attorney at Arent Fox. “Any for-profit buyer that buys the stock and sells the assets and liquidates it would have two levels of tax — corporate-level tax on the asset sale and shareholder-level tax on dividends.”

    The sale represents an opportunity not just for Forstmann Little but also for a host of high-level, current and former IMG executives. Forstmann Little sold stock in 15 percent of the company at a discount to IMG’s top executives after it bought the company. Those executives could stand to make a significant return on their stock.

    It also represents an opportunity for other agencies. Much of IMG’s business is based on relationships with athletes and clients. After Forstmann Little acquired the business in 2004, much of IMG’s top talent left, taking those athletes and client relationships with them, and competing agencies expect the same to happen after this sale.

    “When it’s sold, the best talent will leave, and it will create huge opportunities in the agency world,” said Charlie Besser, owner of Intersport, a Chicago-based competitor of IMG.

    Pyne said during the panel at the conference that IMG’s management team and employees will continue to focus on “creating good value.” He expects IMG to follow in the tradition of other companies once owned by Forstmann Little such as Gulfstream and Dr Pepper, which continue to succeed in the aerospace and soft drink industries. He expects IMG to continue to be a leader in sports and entertainment.

    “People ask me all the time, ‘What’s going to happen?’” Pyne said. “The only thing you can say is that you don’t know what’s going to happen … other than that it will be a very professional and thoughtful process, and IMG should follow in the tradition of those other companies [Forstmann Little sold].”

    He added that he’s personally looking forward to the sale because he believes the sale price will prove what a great company the employees at IMG have built.

    “There’s been a lot of speculation over the last several years at IMG,” Pyne said. “For me, it has been the equivalent of intellectual waterboarding, and I am looking forward to an objective result because there won’t be any more speculation as to what value has been created. I’m very bullish and confident of what’s going to happen.”

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  • IMG sale: Who will bite?

    Forstmann Little is in the process of selecting a bank and plans to open an auction for IMG later this year. The private equity firm, which bought IMG for $750 million in 2004, is looking for more than $2 billion for the sports, fashion and media company. Here’s a look at some of the potential buyers.

    The Agencies

    CAA

    The agency’s push into sports began when it lured away many of IMG’s top agents. Since then, it has bolstered its sales division and added a corporate consulting team. It could benefit by adding some pieces of IMG such as its events, college and media businesses. The agency is supported by the private equity firm TPG Capital.

    William Morris Endeavor

    After two of Hollywood’s biggest talent agencies merged in 2009, speculation was rampant that the resulting agency would push into sports. But WME’s sports activities have remained modest and limited to representing a handful of athletes. Co-CEO Ari Emanuel could change that immediately by acquiring IMG. The agency is supported by the private equity firm Silver Lake Partners.

    Lagardère

    The company’s push into sports began in 2006 when it outbid IMG for the European media and marketing agency Sportfive. CEO Arnaud Lagardère spoke with Forstmann about acquiring IMG in 2007, but it’s unclear if he’s still interested in it. Lagardère already carries $2.35 billion in debt.


    Wasserman Media Group

    The agency hasn’t expressed much interest in buying IMG in the past, but it could still benefit from adding some of IMG’s assets to its portfolio. It received $25 million from Highbridge Capital Management last year to help expand its business through acquisition. But it would need much more than that to make a play for IMG.


    MP & Silva

    The London-based media rights company has competed against IMG Media for years. It would love nothing more than to complement its representation of the French Open’s media rights with IMG’s representation of Wimbledon. It already has met with IMG.


    The Funds

    Aurora Capital Group

    The Los Angeles-based venture capital fund, which is led by Gerry Parsky, expressed interest in IMG prior to Ted Forstmann’s death, according to Vanity Fair. At the time, it was going to team up with Terry Semel. It’s unclear if it would still partner with Semel or find another partner.


    Colony Capital

    The California real estate firm was a serious bidder for AEG, but that was largely because of AEG’s real estate interest in Los Angeles and London. IMG doesn’t offer much real estate, so it would be a stretch for it to make a run.


    Guggenheim Partners

    The financial services firm that put together a jaw-dropping $2 billion deal to acquire the Los Angeles Dodgers made a run at AEG. It could also look at IMG.

    Qatar Investment Authority

    The sovereign wealth fund behind Qatar Sports Investments considered partnering with Colony Capital on a bid for AEG. The fund, which is run by the Qatari royal family, has shown an appetite for big sports investments, buying the Paris Saint-Germain soccer club for more than $340 million and spending money for Qatar Airways, which it owns, to sponsor FC Barcelona.


    The Individuals

    Eike Batista

    One of Brazil’s wealthiest men partnered with IMG on a joint venture in Brazil called IMX in 2010. The partnership and his friendship with Forstmann gave him insight into the company’s business, and his estimated net worth of $12.7 billion means he could stomach IMG’s projected $2 billion asking price. But his interest may be complicated by troubles at EBX Group, his company, which lost $1.25 billion last year.

    Larry Ellison

    Oracle’s billionaire founder continues to take more of an interest in sports. He is underwriting much of the cost of this year’s America’s Cup races in San Francisco and recently made his Indian Wells tennis tournament, the BNP Paribas Open, one of the best-paying events on the tour.

    Mukesh Ambani

    The wealthy Indian’s company, Reliance Industries, partnered with IMG on a joint venture (IMG Reliance) in 2010. Much like Batista, the partnership, friendship with Forstmann and familiarity with IMG’s success in creating the Indian Premier League make him a prime candidate to acquire the company. His net worth is estimated at more than $20 billion.


    Ron Burkle

    The former grocery store magnate has said publicly that he’s interested in bidding on IMG when an auction begins. His Yucaipa Cos. has invested in everything from Barnes & Noble to Hollywood’s Relativity Media. The latter last year acquired SFX Baseball, Maximum Sports Management and Rogue Sports.

    Steven Mnuchin

    The former Goldman Sachs executive and hedge fund manager who runs OneWest Bank made a run at AEG.

    Terry Semel

    The former Yahoo chairman and CEO raised $1.5 billion to buy IMG back in 2008, but Ted Forstmann reportedly rejected the proposal.

    Patrick Soon-Shiong

    The billionaire surgeon was a major figure in the sale of AEG. Though he came up short in the bidding process, he remains interested in sports and could see IMG as an opportunity to get involved in the business.

    The Holding Companies

    WPP

    Martin Sorrell’s appetite for sports is well-known, but his company’s sports assets are primarily focused on Europe. Adding IMG would give the company a strong position in the U.S. and strengthen its standing in sports overseas. It currently has $1.35 billion in cash and carries $4.2 billion in debt.

    Omnicom

    The company’s sports agencies — GMR, SportsMark, The Marketing Arm and others — have made great strides in corporate consulting and sales in recent years. IMG would give it a way to push into property representation in college sports and add media rights distribution to its portfolio. It currently has $1.9 billion in cash and carries $4.4 billion in debt.

    Interpublic Group

    The company already has Octagon and Momentum Worldwide as part of its portfolio. Adding IMG Media and IMG College could help boost its bottom line and take it into new areas in the sports industry. It currently has $1.2 billion in cash and carries $1.6 billion in debt.

    — Compiled by Tripp Mickle

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  • After drifting from golf, Izod attracted to sport’s younger face

    Editor's note: This story is revised from the print edition.

    Golf has seldom been described as a marketing tool to reach a younger audience, but with more and more colorfully dressed 20-something golfers becoming the face of the PGA Tour, Izod has noticed.

    The brand, whose theme is “Izod is color,” jumped back into golf with three player deals at the start of the year, most notably one with U.S. Open champ Webb Simpson. This week, Izod will make its biggest splash in golf with a full slate of hospitality and marketing initiatives at the Masters, where it “will take Augusta by storm,” said Mike Kelly, executive vice president of marketing for Izod parent company Phillips-Van Heusen.

    “We’re trying to take the golf world back,” Kelly said. “Golf has always been in Izod’s DNA, and we used to be deeper in the sport with Retief Goosen years ago. But golf got a little old and the numbers were falling off,” so Izod looked other places to access the 18- to 34-year-old consumer.

    But at Augusta this week, Izod will have its “coming-out party,” as Kelly described it. The Pinnacle building, a hospitality structure near the heavily trafficked corner of Washington Road and Berckmans Road, just a block away from the entrance to Augusta National, will be wrapped on two sides with images of Team Izod golfers Scott Piercy, Simpson and Spencer Levin. The side wrap will measure 69
    In its effort to “take Augusta by storm,” Izod will have its branding on the Pinnacle hospitality building, shown in renderings.
    Images: IZOD GOLF (2)
    by 19 feet, while the long wall wrap will be 97 by 19 feet.

    Izod also has agreed to partner with Maxim on a Wednesday night industry party in a rented house that will be the primary location for Izod and Maxim hospitality throughout the week. The site is being called the Maxim Clubhouse presented by Izod. A sweepstakes is rewarding winners with invitations to the party.

    The 2,500-square-foot property on Azalea Drive, just across the street from the entrance to Augusta National, will also be the site for what Izod is calling its social media hub, where bloggers and journalists will be filing stories throughout the week. PGATour.com social media team members and reporters, the golf writer from SB Nation, radio shows and other bloggers will be working from and referencing the Izod social media studio throughout the week.

    Kelly said the social media outreach will give Izod a stronger voice with the younger readers and fan base. Matter and Edelman Digital are working with Izod on its social media strategy.

    But marketers are still waiting to see if golf’s youth movement and more of a presence on social media will generate more Gen Y and Gen X fans.

    “With the economy coming back, we’ve seen insurance, financial institutions, a lot of Fortune 500 companies coming back in a big way,” said Jon Wagner, a longtime marketer for IMG Golf who now runs his own shop in Cleveland, Milestone Sports Management, and represents Capital One. “Certainly golfers like Keegan [Bradley] and Rickie [Fowler] have gotten people’s attention, but for people in their 20s, golf is still a fringe sport and an expensive sport. Has golf gotten a little cooler? Yes. But I wouldn’t say it’s attracting more new kids to the game than it did in the past.”

    But at least golf is attracting a mainstream, big brand like Izod, said Barry Hyde, a golf marketing veteran at Wasserman Media Group and a former chief marketer at the U.S. Golf Association.

    “We can’t always be limited to financial firms and car companies,” Hyde said.

    The brand’s Team Izod advertising has been heavy on NBC/Golf Channel, with its print advertising running in Golf Digest, Maxim, Men’s Health and GQ.

    “We’re trying to get the point across that this is not your dad’s Izod,” Kelly said. “We’re trying to bring a younger, fresher take, and social media is one of the ways you reach [the younger consumer]. The line of golf apparel has already been very well-received by our retail partners. Now, this is our coming-out party, really, for the industry at the Masters.”

    Kelly said the Maxim Clubhouse deal was part of a large ad buy with the magazine.

    “This is our first, big on-the-ground activation,” he said.

    Because Masters advertising on CBS is limited to just three primary sponsors — AT&T, Exxon Mobil and IBM — brands have developed ways to activate away from the golf course in Augusta. Berckmans Place is the Masters’ primary hospitality option on-site, but the $6,000 weekly passes have been sold out essentially since the facility opened two years ago.

    It’s not uncommon to see brands renting space up and down Washington Road in order to catch the eyes of the passers-by.

    “This kind of off-site activation at Augusta has become prolific,” said Hyde, who has missed just one Masters since 1991. “There are two simple reasons. It is the mecca for the golf world. You’ve got to have some type of presence in Augusta, for credibility sake. You combine that with the fact that there are very few opportunities on-site, and those off-site activations become more and more important. That’s always been the case to a degree, but it’s gotten much louder in the last several years.”

    Izod spent much of the last five years title sponsoring the IndyCar Series. The Izod Center in the Meadowlands continues to carry the company's name even though the naming-rights deal has expired.

    Golf was absent for much of that time, until it struck a deal with Simpson late last fall. Simpson surprised many in the industry by leaving Ralph Lauren to go to Izod, a brand with much less equity in the sport. Industry insiders say Izod outbid Ralph Lauren with a $750,000-a-year offer, compared with Ralph Lauren’s $500,000 bid, and Simpson went with the newcomer to golf.

    Piercy and Levin were added shortly thereafter — the value of their deals was not available, although it wouldn’t have compared to Simpson’s. Those deals gave Izod a stable of three tour players to market against this year.

    “As we’ve refined what we’re trying to do with the brand, lo and behold, golf got hot,” Kelly said. “Look at the colors being worn, the age of the golfers. We decided to dive back in with a really aggressive plan.”


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  • TaylorMade a quick-change artist on marketing

    It probably wasn’t noticeable to anyone outside the walls of TaylorMade’s Carlsbad, Calif., headquarters, but the company’s 2013 marketing has already done an abrupt about-face.

    In the span of less than three weeks, from the end of January into February, TaylorMade’s marketing team blew up one advertising campaign, created another one and launched it with the help of ad agency NYCA.

    “It’s already been a crazy year,” said Bob Maggiore, chief marketer for TaylorMade-Adidas Golf and a 15-year veteran of the company’s marketing department. “We shifted our campaign within weeks and created a completely new message.”

    Here’s why: TaylorMade spent the fall of 2012 planning a campaign for the R1 driver built around the club’s adjustability. The golfer can change everything from the loft to the face angle and the flight path. The campaign was themed “80%” because TaylorMade contends that 80 percent of all golfers play drivers with the wrong loft.

    It was a perfectly sound
    The rapid success of the company’s R1 driver created an equally rapid response in TaylorMade’s marketing strategy.
    campaign built on “logic points,” Maggiore said. Three 30-second spots were shot and began airing on Golf Channel with the first tournament of the year at the Hyundai Tournament of Champions.

    With any new driver, Maggiore said, the hope is that it eventually becomes the top driver on the PGA Tour. It’s a realistic expectation for TaylorMade, which owns 47 percent of the market for drivers and woods. In addition, the company was coming off a record year with $1.7 billion in 2012 sales, more than any other golf equipment maker had ever made. But the R1 took off even faster than expected. By the Sony Open, the second tournament of the season, 21 pros had put the R1 in their bag, making it the most-used driver on tour, according to the Darrell Survey of equipment played.

    Just two weeks into the season, the story had changed. It wasn’t just about the logical “80%” anymore. The story was about how the R1 had taken the tour by storm.

    “You always set out to have the No. 1 driver on tour, but it takes time,” Maggiore said. “The speed by which this driver became No. 1, well, that was the story. The best players in the world moved to this driver faster than anything we’d ever seen.”

    Maggiore has been in charge of marketing for TaylorMade-Adidas for two years, overseeing equipment, footwear and apparel for the TaylorMade, Adidas and Ashworth brands. He likes to think of his 12-person marketing department as Robert Griffin III, the Washington Redskins quarterback who might hand off, run or pass on any given play.

    “Years ago in football, you’d call a play and then run that play,” Maggiore said. “We’re a lot more like the read-option, changing plays in the middle of the play. Our adaptability is what I’m most proud of.”

    TaylorMade’s sales and its dominance of the market are well-established now. In 2012, sales of drivers and fairway woods were up 21 percent. Sales of irons were up 32 percent. Footwear sales jumped 19 percent. “They are the greatest marketer in all of golf,” said veteran golf marketer Jon Wagner, a former IMG Golf executive who now runs his own shop in Cleveland, Milestone Sports Management.

    “When they came out with the white driver a few years ago, that was all marketing,” Wagner said. “That wasn’t technology. They went out and marketed something new and different, and that’s why their sales are where they are.”

    By mid-January, it was clear to Maggiore that TaylorMade had to change course and create new spots that emphasized the “No. 1 driver on tour” message. Within a few weeks, new footage of TaylorMade’s top stars — Dustin Johnson, Sergio Garcia, Justin Rose and others — was shot for “R1 is the One.”

    “We blew up all of our TV spots, our print, all of our messaging in social media,” Maggiore said. “We replaced all of that creative. We jumped in a room with our partners at NYCA and completely moved to the theme of tour dominance.

    “We realize that the chaos and the speed with which we behave is a strength. Honestly, we’ve had people join the team who struggle with that. They want to have a plan and stick with the plan. But taking advantage of your opportunities is what makes great marketing.”

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  • Surf’s up as Lynch takes new marketing post

    Longtime Visa sponsorship marketing chief Michael Lynch has resurfaced atop a surfboard. Lynch, who left his job at Visa last January after 16 years with the payment card brand, is the new chief marketing and revenue officer for the Association of Surfing Professionals, the de facto worldwide governing federation for the sport. He will start the new job April 15.

    Michael Lynch takes his experience to the Association of Surfing Professionals.
    Photo: TONY FLOREZ PHOTOGRAPHY
    The ASP runs a global tour and was recently bought by ZoSea Media, a group headed by surfing agent Terry Hardy and Paul Speaker, a former marketing director at the NFL. Hardy mounted an unsuccessful rival tour in 2009.

    Speaker was named CEO of the ASP, and his group will assume full control for the 2014 tour.

    “Paul is someone I worked with when he was at the NFL and someone I consider very creative,” Lynch said. “And the opportunity to build a global sports property that has been recapitalized and one that is headed by someone I really respect in a really entrepreneurial environment was impossible to turn down.”

    Lynch said he had spent the past 15 months on the boards of a half-dozen startup companies and consulting for another handful of organizations, including the NCAA and the ASP.

    The ASP is moving its global headquarters to Venice Beach, Calif. Lynch, who would not say whether he is receiving equity as part of his package, described his job functions as running communications, marketing, sponsorship and other revenue lines, and building the profile of the ASP through top athletes, like 11-time champion Kelly Slater. Lynch said the ASP had not previously packaged and sold media and marketing rights on a global basis. It will now.

    What has been a sometimes factionalized tour has been supported almost entirely by endemic sponsors, such as surfwear and equipment brand Quiksilver. Lynch will attempt to package and sell global sponsorships, which will certainly require some sort of media package.

    Overall, the ASP, which has competitions from grassroots to elite levels, will have 115 events in 15 countries next year. Lynch said a recent audience segmentation study reported a base of 78 million fans, largely in five countries: Australia, Brazil, France, Portugal and the U.S.

    Lynch says he may also find time to take surfing lessons. “I’ve tried to stand up on a surfboard three times in my life, and none of those were successful,” he said, laughing, “but I don’t think they hired me for my surfing ability.”

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  • Electronics maker BiGR continues sports push

    BiGR Audio, a California-based manufacturer of high-end electronics, has signed a multiyear license with the Collegiate Licensing Co., is nearing another with the rival Licensing Resource Group, and has expanded its existing line of Major League Baseball-licensed headphones, signaling its growing interest in sports-related products.

    The college licenses with CLC and LRG will begin with licensed headphones for the universities of Florida, Alabama and Texas and Louisiana State University, and soon expand to more than a dozen other schools. Schools represented in the BiGR Audio headphone lineup will be a mix of both large programs in football Bowl Championship Series conferences, and smaller universities.

    BiGR Audio, meanwhile, revamped its MLB product line after a debut with the baseball license last year. Price points of $199 and $149 last year have been reduced to $99, and the company shifted from plastic materials for its earcups to beechwood, with the team logos laser engraved.

    The company is one of several headphone manufacturers that have sought out sports in recent years as a key avenue for growth and awareness as consumers increasingly seek out higher-quality audio products. Others that have experimented with sports licensing include Beats By Dre and Skullcandy, as well as players at lower price points such as iHip.

    “A lot of this is simply the result of customers asking for these products, particularly the college headphones,” said Rich Bracke, BiGR Audio founder and chief executive. “We see a ton of opportunity ahead in college, particularly in markets where there isn’t a pro team.”


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  • Sunrise Sports to seek naming-rights buyer for FAU stadium after Geo Group controversy

    Florida Atlantic University has turned to Sunrise Sports & Entertainment to sell naming rights for its football stadium after the school’s much-criticized deal with a prison operator fell apart last week.

    In February, Geo Group, a private manager of prison facilities, signed an agreement with FAU to donate $6 million to the school over the next 12 years in exchange for stadium naming rights. The Boca Raton, Fla.-based firm, whose chairman, George Zoley, is an FAU alum and a former member of the school’s board of trustees, withdrew the gift after several campus protests by students and civil rights groups. The company has been sued for human rights violations, accusations Geo Group denies.

    The naming-rights issue put a spotlight on the stadium, Sunrise Sports’ Michael Yormark says.
    Photo: J.C. RIDLEY
    Sunrise Sports, parent company of the Florida Panthers, has assumed the responsibility of remarketing a title sponsorship of the 30,000-seat football venue, said Michael Yormark, the group’s president and chief operating officer.

    Sunrise Sports had signed a deal with FAU in January covering the selling of naming rights to both FAU Stadium and FAU Arena, in addition to booking events at the stadium. But soon after the agreement was reached, FAU sold naming rights in-house to Geo Group, cutting short Sunrise Sports’ effort to market those rights. Sunrise Sports instead put its focus on filling the stadium with special events and selling the arena’s naming rights.

    Yormark said FAU was talking with Geo Group before the school signed its deal with Sunrise Sports and it had the option of finding a buyer on its own.

    Now that the stadium’s naming rights are open again, Sunrise Sports will revert to the terms of the original agreement tied to all three components, company officials said.

    During initial conversations with FAU last week, Yormark agreed to be the point man for selling the stadium’s name, he said. Further talks were scheduled with Athletic Director Patrick Chun and Mary Jane Saunders, the school’s president, to talk about naming prospects.

    Sunrise Sports has identified categories and companies as potential naming-rights partners, but Yormark did not want to mention names until FAU had OK’d them.

    “We want to stay away from any more controversy,” he said. “Geo Group was obviously not the right fit. It’s time to turn the page. It was a learning experience, and now we will remarket the opportunity to put a name on the stadium. That’s our goal.”

    If something positive came out of the Geo Group naming-rights debacle, Yormark said, it was the “big spotlight put on this stadium” through a deal that quickly became national news. “It is much more visible than it’s ever been,” he said, “and we think that is to our advantage.”

    Ideally, Sunrise Sports would like to get a deal done to rename the stadium by the time college football season starts this fall, Yormark said.

    “We have the potential to do a better deal,” Yormark said. “It is a valuable asset and has to be marketed as such. We are going to be aggressive, but ultimately, the university makes the decision.”

    Print | Tags: Marketing and Sponsorship
  • Bassmaster hooks Diet Dew as sponsor

    Bassmaster, the sanctioning body for fishing’s top series, has signed Diet Mountain Dew to be a sponsor across all of its leagues.

    The deal marks another nonendemic sponsor for Bassmaster and provides its first sponsor in the soft drink category. The sides reached an agreement last month after talks started last fall.

    Bassmaster sponsorships range from the low six figures up to seven figures. Specifics of the Diet Mountain Dew deal were not available, but it’s believed to be in the middle of that range.

    “In the last year or so, we’ve worked really hard to expand on the nonendemic sponsors in the sport,” said Bruce Akin, CEO of B.A.S.S., the membership organization that oversees the fishing series. “Our audience presents a real opportunity for a lot of brands, and Diet Mountain Dew has had a good experience with outdoor campaigns they’ve had in the past.”

    Bassmaster handles its sponsorship sales in-house, led by Akin and by Angie Thompson, vice president of business development.

    Diet Mountain Dew was represented in the deal by John Rizzolo at Optimum Sports.

    The brand will receive exposure across Bassmaster’s media outlets, ranging from its monthly magazine to spots on Bassmaster.com and its TV shows that run on ESPN2 and Outdoor Channel.

    Bassmaster also offers extensive branding and signage across its elite, open and college series.

    Print | Tags: Marketing and Sponsorship
  • Hospitality hoists sales over sponsor deals at America’s Cup

    Terry Lefton
    It’s still the most important race in sailing, but over the past few years, the America’s Cup has been wandering the waters of sponsorship looking less like the sleek, 72-foot, wing-sail catamarans that will compete for sports’ oldest trophy this fall and more like a leaky scow sailing against the wind.
     
    It started with overblown expectations of top-level sponsorship sales in the tens of millions, deals that were not realized. It continued with strong independent sales agencies like Rob Prazmark’s 21 Marketing and Randy Bernstein’s Premier Partnerships finding it difficult to sell IP and global and domestic media when hospitality rights were the asset most in demand.

    Big-event hospitality ace SportsMark has had the most success, having sold about half of its top-level packages on the shores of San Francisco Bay, where the 2013 event will be staged Sept. 7-21.

    “I would characterize our sales as good and improving,” said SportsMark President Keith Bruce, “but this has always been an event driven by hospitality.”

    The competition will take place in San Francisco in September.
    Photo: AMERICA'S CUP
    SportsMark is still selling waterfront hospitality “chalets,” which can hold about 60 people and are priced from $75,000 for a single America’s Cup race to $395,000 for the full series making up the two-week competition.

    However, those hospitality sales were made at the expense of the mid-seven-figure IP packages, which agencies 21 and Premier found were about as easy to sell as is sailing across the North Atlantic in December. Prospective clients like JPMorgan Chase, for example, saw little need to purchase broad category rights for $3 million to $4 million when hospitality could be had for 90 percent less.

    “Give [San Francisco-based] SportsMark credit: They know their home market and they knew what was valuable about the America’s Cup for sponsors,” said a veteran marketer, who’d looked at some of the packages. “But having those hospitality packages out there just gutted so many potential sales.”

    This is not to say there has been no sales success. Lexus, Louis Vuitton, Kaiser Permanente, Charles Schwab and Puma have secured top-level official partner packages, and we hear that The New York Times is close to signing on as a global media partner. The fact that a property originally in the market at Olympic or FIFA World Cup prices doesn’t have a beer or wireless sponsor speaks volumes about what those marketing-heavy industries thought about the property.

    But in an attempt to speak to the market with one voice, the packages have flipped from being primarily marketing to being primarily media. Now, it’s Front Row Marketing selling the NBC and NBC Sports Net media packages, and here’s where we expect the beers and telecoms will be buying in. Looking for irony? Comcast-owned Front Row Marketing is selling media-heavy packages originally bought by America’s Cup organizers and Comcast-owned NBC. Those new, media-heavy packages are priced from the mid-six to low seven figures for network, cable and augmented-reality for on-screen branding, along with digital media and foreign TV time.

    As you’d expect, the America’s Cup is being sold more on the basis of top-flight demographics than ratings. However, it is arguably the biggest international sports competition of 2013, and for those still seeking them, IP rights and hospitality are available at the higher price levels.

    “These have a lot of value for brands with global aspirations,” said Front Row President Chris Lencheski, “but they weren’t bought with nearly the lead time sponsors bought other big international sports properties.”

    If the U.S. successfully defends the America’s Cup, the hope here is that a better sales course can be charted for the next series.

    MillerCoors will activate in the U.S. around Molson Canadian.
    > BEER CUP: While most, if not all, of the ads you’ll see from MillerCoors for the coming Stanley Cup playoffs on NBC Universal outlets will be for Coors Light, most of the brewer’s U.S. retail activity during the second season is around the Molson Canadian brand. For perhaps the first time south of the Canadian border, Stanley Cup imagery is splashed across 275,000 cases of cans, and 200,000 cases of bottles will feature themed labels as well. Each bottle then will have one of 45 different versions of the back labels, delivering a social media overlay to create hockey debates among fans. That means hockey fans reading those labels will be able to debate playoff scenarios and vote on them via mobile or online. The promo is being staged in hockey-mad markets, especially Buffalo/Rochester, Michigan, New England, Philadelphia and Pittsburgh.

    “We’re trying to marry ourselves to hockey, generate more display, and create a social conversation around the brand,” said Molson Canadian brand manager Tom Henehan.

    Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.

    Print | Tags: Marketing and Sponsorship
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