SBJ/March 3-9, 2014/Marketing and Sponsorship

Years after bumpy rollup, SFX Sports alums reunite to remember

At a Manhattan tavern during Super Bowl week, they gathered, the soldiers of the late ’90s SFX sports and entertainment rollup, commemorating over beer and finger food. It was a group laden with talent, yet with so many egos that perhaps it never could have succeeded in challenging the likes of IMG.

But oh, what an all-star team.

The Marquee Group, headed by former MSG chief Bob Gutkowski, rolled up the likes of Athletes & Artists, Alphabet City, ProServ, ISI and SMTI. SFX entered the agent business in 1998 by acquiring David Falk’s FAME agency (then managing Michael Jordan and many other NBA stars) and followed that by swallowing up The Marquee Group. The SFX shopping spree continued with the acquisition of top agents like the Hendricks brothers, Tellem & Associates and sports branding agency SME.

At the time, you wondered if the egos of all those entrepreneurs could even fit in the same room, much less achieve any synergy. For example, Falk, then chairman of SFX Sports, had ProServ head Donald Dell reporting to him, even though the pair had a messy split when Falk worked for Dell at ProServ. “The cultures — especially of the agents — were tricky,” said Falk, who did not attend the reunion.

E.J. Narcise talks with SFX Sports reunion organizer Brian Corcoran.
Photo by: TERRY LEFTON / STAFF
There’s always a question as to whether size matters when it comes to sports marketing. SFX Sports was unwieldy. ISI co-founder Fred Fried recalled being summoned to an SFX off-site gathering in Florida, restricted to senior vice presidents and above. When he arrived, there were more than 700 people.

“I looked around and thought sports was just way too small to be important,” said Fried, now a principal at Team Services.

To be fair, SFX achieved synergy on the entertainment side through its marriage of radio stations, concert promoters, venues and Broadway producers.

However, on the sports side of the house, “We felt like we were sitting in the back seat,” said Brian Corcoran, who worked for ISI/SFX for more than three years and who organized the reunion, “but we had the talent for something that really could have endured.”

Brian Mieth and Fred Fried
Photo by: TERRY LEFTON / STAFF
Brian Mieth
, now vice president of sales at Icon International, came in through the ISI side of the SFX conglomeration and like his “classmates,” recalled learning so many practical lessons. “If there had been a vision other than financial, it could have been something special,” he said, “but it was just about blowing up a stock.”

Howard Schacter, the former SFX corporate communications executive, said all those acquisitions “meant we were sprinting all day, every day.” As time progressed at that speed, “it became apparent that it was all about making us palatable to the investment community,” said Schacter, now president of DiGennaro Communications.
Jeff Sofka worked under four different company nameplates from 1997 to 2002.

“Now I know someone on almost any business connected to sports and entertainment,” said Sofka, an independent marketing consultant. “The lesson for me is that buying talented entrepreneurial individuals is so much different from rolling up hard assets, like radio stations.”

Whatever can be said about the untapped potential of SFX Sports, the rollup worked as a financial play. SFX sold to Clear Channel in 2000 for $4.4 billion. By the mid-2000s, many of the SFX sports marketers had left. Some of the bigger agents, including Arn Tellem, bought their practices back.
 
Around 14 years later, William Morris Endeavor’s recent acquisition of IMG shows that siren song sports and entertainment synergy is still driving billion-dollar deals.

Falk says he’s discussed his SFX experiences with CAA President Richard Lovett and William Morris Endeavor co-chief Ari Emanuel, “both of who will now be slugging it out in an intergalactic battle” with competing sports and entertainment agencies.

“The lack of a culture [at SFX] made it very difficult, and maybe I wasn’t a great manager or motivator,” Falk said when asked about what might have been, “but we had all the ingredients …”

It all gets back to whether size and scale matter. FAME had 24 employees and 40 clients when it was acquired by SFX in 1998. Three years later, Falk was heading SFX Sports, with 900 employees and 1,100 clients. Today he has two employees and 10 clients.

“I’m grateful to [former SFX head Robert] Sillerman, because the [FAME] sale gave me independence,” Falk said. “But these days, I’ll tell you that smaller is better.”

The reunion bar grew noisier as the second and third rounds were served.
 
“What’s fascinating is how everybody has flourished,” said Corcoran, now owner and president at Shamrock Sports and Entertainment. “There’s enough material here for a book. And we’re all hoping to finish writing that before this night’s over.”

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

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