This week, writer Daniel Kaplan sits down with Rodney Barreto, chair of the host committee for next year’s Super Bowl in Miami. Plus, Erik Spanberg joins the discussion of our cover story on the Charlotte Hornets as Buzz City prepares for the All-Star Game next weekend.
Three-time Olympic champion Kerri Walsh Jennings’ startup beach volleyball tour p1440’s future is uncertain after suffering major losses in its first three events and struggling to schedule a 2019 tour. Now, a former partner is suing.
P1440 originally promised eight events in 2018 and 2019 but hasn’t announced any new stops since its last event Dec. 2. Organizers say they’ll proceed with much lower costs, which could undermine Walsh Jennings’ original promise of athlete-friendly prize purses.
“We invested a lot more money than we projected in year one, but we learned and we’re looking at everything to fix that,” said Dave Mays, p1440’s primary capital backer.
On Jan. 15, entities controlled by beach volleyball promoter Leonard Armato sued p1440 and Mays for more than $8 million total in two separate cases in Orange County Superior Court. In one case against Mays personally, lawyers for Armato’s World Series of Beach Volleyball property claim Mays obtained trade secrets from him under the guise of a partnership, and then used that information to invest $5 million in Walsh Jennings’ startup and build the company. Armato claims that caused the World Series to cancel its 2018 event and go out of business, costing it at least $3 million.
According to a separate lawsuit filed against p1440, the tour also cost Armato’s Management Plus Enterprises at least $334,750 by unilaterally canceling telecasts it helped broker with ABC/ESPN.
Armato declined to comment. Mays declined to address the lawsuits in detail, only saying that p1440 has always acted “with professionalism, transparency and authenticity.” He did not say when a new schedule might be released, or what kinds of events it would entail.
We invested a lot more money than we projected in year one, but we learned and we’re looking at everything to fix that.
p1440's primary capital backer
Despite shortfalls in sponsorship revenue, Mays said there were positive results for the sport and the property.
“With that being said, do I want to go burn whatever — I’m not going to give you a number, but it’s a big number — next year, or this year rather?” Mays said. “No, but we’re going to do what’s smart, because that’s what entrepreneurs do: They adjust to the environment.”
Walsh Jennings founded the p1440 tour after her dispute with the AVP over its exclusivity clause that prohibits players from participating in other domestic circuits. When she launched p1440, she promised prize pools large enough to let players make a full-time salary on the sand, and in fact, the purse for its opening event was $300,000, larger than any single AVP stop.
But business problems were apparent from the start. Attendance at the inaugural event in San Jose was sparse, according to those who did show up. Unlike most free-to-attend beach volleyball tournaments, p1440 charged admission, making the low attendance damaging to both gate receipts and sponsorship sales (it dropped the admission fee after the first event). On television, it drew 496,000 viewers on ABC during Sunday NFL football.
Its second event, in Las Vegas, was sanctioned by the International Volleyball Federation (FIVB), giving it Olympic qualifier status. The sanctioning lures a better field but also raises costs. In Vegas, officials required p1440 to replace the sand on center court before play because it didn’t meet international standards. Viewership in the same Sunday afternoon time slot on ESPN2 dropped to 87,000.
In November, p1440 announced it had canceled its San Diego event and moved up the date of its year-ending Huntington Beach, Calif., tournament. Neither would be on TV, which Armato says in the lawsuit cost him promised production fees, payments for ad units he sold p1440 and the cost of royalties he gave ESPN in lieu of the canceled programming. Before the tour’s launch, Armato obtained the ad units and broadcast time from ABC/ESPN and then sold it to p1440 as part of a deal in which his firm produced the events for a fee and vouched for p1440 to ABC/ESPN.
All the while, p1440 was talking to FIVB about sanctioning three of its planned 2019 stops, which would again give them Olympic qualifier status and help lure players under contract with the AVP. The AVP says it won’t hinder an athlete’s attempt to qualify for the Olympics.
But those talks broke down after p1440 was unable to secure a partnership to co-promote the FIVB events with the Red Bull-backed Beach Volleyball Major Series. Mays said he’s unwilling to let p1440 be the only financial backer to FIVB tournaments that cost millions to execute.