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SBJ/April 21-27, 2014/Marketing and Sponsorship
GMR moves on after departures
Senior executives exit in wake of merger with SportsMark
Published April 21, 2014, Page 1
But a year later, only two of the five senior sports executives remain — Katzoff and SportsMark CEO Steve Skubic. The other three — Keith Bruce, Greg Busch and, most recently, Mike Boykin — have departed.
Bruce left last September to lead San Francisco’s Super Bowl host committee. Busch and Boykin, who left in February and March, respectively, haven’t announced what they plan to do next.
The departures, particularly of Busch and Boykin, who are credited with building GMR’s sports consultancy over the last 15 years, surprised employees and business partners alike, sparking questions across the industry about the direction of GMR.
“It’s like seeing a couple in a good marriage and then watching it fall apart,” said Trip Wheeler, a former GMR executive who now runs Speedway Benefits Inc. “You’re just sad for them. GMR is going to be fine. They’ll keep on trucking, but there are questions about how something so good could fall apart. What happened?”
The merger was designed to combine Omnicom’s strongest event hospitality company, SportsMark, with the established event marketing and corporate consulting businesses that resided at GMR Marketing. The two companies separately worked with clients like Procter & Gamble and Visa, and the hope was that they could improve their offerings to existing clients and add new ones by combining the services they offered.
Such mergers typically trigger executive changes, but the recent departures have raised more questions than answers about the agency’s direction. They also came at a time when several sports marketing companies are going through transition. IMG Consulting will soon be part of a combined WME-IMG company. CAA Sports’ consulting group is relatively new on the scene, while Lagardère is looking to ramp up its offering and Jack Morton Worldwide is moving into sports marketing.
Wasserman Media Group, Octagon, Team Epic, Momentum Worldwide and others have been stable. But the fluctuations across the industry have the potential to reshuffle some long-standing client relationships.
“You’re at an inflection point within the agencies, without a doubt,” said Chris Lencheski, former CEO of Front Row Marketing. “These inflection points happen in seven- to 10-year cycles, and you’re starting to see another change. Any time you have this type of change historically, clients will sit back, wait for it to resolve and they’ll start measuring things based on performance and new people. It puts some chum in the water.”
With Busch and Boykin out of the picture, Connelly said GMR has turned over its sports efforts to three key executives:
n Katzoff is leading global consulting efforts around everything from the Olympics and World Cup to international soccer and the NBA. He lives in Montana but travels extensively to GMR offices in Milwaukee, San Francisco, London and Brazil.
n Tyson Webber is a longtime GMR executive who distinguished himself with his handling of the Lowe’s motorsports business early in his career. He relocated from Charlotte to Milwaukee last year to oversee a client management group working across both sports and entertainment.
n Steve Dupee is another longtime GMR executive who started on the account service side of GMR’s business and recently transitioned into a role leading business development across sports and entertainment. He is based in Milwaukee.
Despite the change in ranks, the trio has had early success expanding GMR’s business. The San Francisco 49ers recently hired GMR to manage sponsor activation at the new Levi’s Stadium in Santa Clara, Calif., and the vacuum company Dyson has hired GMR to manage an international tour displaying its technology at malls and festivals. The agency also expanded its business with SAP, which it was working with in Europe and now is working with on NBA and NFL sponsorships in the U.S., and HP, which was working with GMR on some golf tournaments in the U.K. and has hired it to develop an international sponsorship strategy.
Connelly and Katzoff credit the merger of the two agencies with helping it secure some of that business. The best example they could point to was new business it won with Samsung. GMR had worked with Samsung on its handset business in the U.S., and that relationship combined with its merger with SportsMark allowed it to win Samsung’s Olympic hospitality for the Sochi Games, Connelly said. The Levi’s Stadium business also is an example. SportsMark, which was headquartered in the Bay Area, has strong ties to the 49ers, and Katzoff sits on the team’s board.
“We’re feeling efficiencies, and it’s been a great, great merger thus far,” Connelly said.
Keeping that momentum going following the recent changes in its executive ranks could be a challenge. Former Visa sponsorship executive Michael Lynch, who worked with GMR while he was at Visa, said brands hire agencies in large part because of their personnel, and brands spend considerable time working with an agency’s staff to be sure they understand a brand’s goals.
“When someone leaves, particularly at the leadership levels, that training goes out the window,” Lynch wrote in an email. “The key is the replacement personnel — are they an upgrade or not? If not, the account could be at risk. What happens to the person that leaves? Does he or she go to a competitor with all that client knowledge? If so, again, you could be at risk.”
GMR has built a reputation through the years of replacing key personnel with dependable staff. Matt Lederer, Comcast Cable senior director of sports marketing, has worked with the agency for five years and seen people working on the Comcast account come and go, including Dupee, who once led the account team.
“Whether it’s a junior account executive or a more senior executive, they always replace them with top-notch people,” Lederer said. “I have full confidence that they will get the right quality of person in whatever role they need.”
The GMR-SportsMark merger that played a role in the departures of Busch and Boykin can be traced to 2012. In September of that year, executives from GMR and SportsMark met to discuss the merger for the first time. A few days later, then-GMR Chief Operating Officer Bryan Buske died of a heart attack at just 52. He was the agency’s second employee and served as a key adviser to its founder, Gary Reynolds, who sources describe as a distant executive focused on financial results. Buske led the company’s operations and had a strong relationship with Busch and Boykin that made him a key advocate of their leadership over the years.
In the years prior to the merger, Reynolds, like many executives facing revenue declines during the recession, pushed GMR to improve its margins by reducing overhead, sources said. Senior staff such as GMR President Jay Lenstrom, Ed Kiernan and Tamera Green departed during that period and their positions were filled by promoting other employees.
The approach, which had its roots in the recession, continued as GMR and SportsMark merged.
For more than a decade, sports within GMR operated independently from the rest of the agency, which did entertainment, retail, music and lifestyle marketing. The sports group evolved during that time from being regarded as a talented event marketing agency to a full-service consulting group that could help evaluate and execute sponsorships for brands like P&G, which signed a worldwide Olympic sponsorship in 2011.
Busch and Boykin had been critical to the sports division’s evolution. They became the public faces of the sports group and worked in tandem to win business and build a staff to work with new clients like Gillette, Lowe’s, Comcast and Humana. GMR went from being a small player in sports event marketing to a major competitor in sports consulting, challenging established agencies like IMG and Octagon for business with big brands.
The duo expected that work to pay off with senior leadership roles following the merger.
As the merger played out, GMR restructured its well-regarded consulting practices, bringing sports and entertainment together for the first time. According to sources familiar with the merger, Busch pushed to lead the new combined client services group, and Boykin pushed to lead sales and business development. But those roles went to Webber and Dupee, respectively.
Around the same time, GMR named senior vice president Cameron Wagner head of its Charlotte office, displacing Boykin, who had led it since it opened in 2000.
Bruce was the first top executive to leave following the merger. Last September, the longtime Bay Area resident accepted the chief executive position at the San Francisco Bay Area Super Bowl Host Committee for Super Bowl L, a prestigious job overseeing the biggest sports event in the history of booming Silicon Valley.
Busch left GMR several months later in early February. Boykin followed in late March, and his departure was announced in a brief, internal email. Neither have announced what they plan to do, and both declined to comment for this story.
The news rattled much of GMR’s Charlotte office and sparked industrywide response.
“The way you handle key people like that leaving is as important as the decision of letting them go,” said Steve Lauletta, president of Chip Ganassi Racing and a former executive with Omnicom’s Radiate Group. “There were questions internally about what was going on and questions externally, and I don’t know that’s a good position to be in.”
GMR clients say they have been advised on changes at the agency. Lederer worked with Busch early in Comcast’s use of GMR, and he said he was told several weeks before Busch left GMR that he would be departing.
“From an existing client standpoint, those changes won’t impact me,” Lederer said. “That’s not a knock against Greg or Mike. They did a great job. But they have a machine [at GMR], and they have really good people.”