ASP Teams With Sportsworld/SSM In $12.75-Million Deal

[IMAGE 1]It’s finally official. The Association of Surfing Professionals (ASP)and Sportsworld Media Group plc (SMG) announced today that they hadreached an agreement on a five-year, 12.75-million-dollar (U.S.) dealthat grants Sportsworld exclusive marketing and media rights to the ASPbrand. According to Sportsworld, the intent is to re-launch pro surfingas a globally competitive sports and lifestyle property.

“SMG is unlike other companies we have spoken with,” says ASP Presidentand CEO Wayne “Rabbit” Bartholomew. “They understand surfing and ourfuture. Secondly, their TV production quality showcases the sport how itshould be seen, and combined with their distribution network, we believewe can take surfing to a new dimension.”

In addition to granting Sportsworld exclusive marketing and media rightsto the ASP brand, the deal guarantees the ASP an extensive internationalmedia platform, and provides dedicated marketing representation in allmain markets for the sport. The agreement will also include a majorcommitment to the development of the popular ASP web site,www.aspworldtour.com, in which Sportsworld acquires a twenty percentequity stake.

While the fact the negotiations were underway was a poorly kept secret,the announcement that a final deal had been reached was a shock to manyin the industry — including those with the most at stake.

[IMAGE 2]When told of the announcement, Billabong U.S.A.’s V.P. of MarketingGraham Stapelberg was caught off guard: àƒ,à‚†žThat’s news to me. That’sextreme news to me considering the fact that we at Billabong haven’teven seen the deal yet.” Billabong is planning to sponsor three WCTevents during 2001 — more than any other brand.

So who the heck is Sportsworld? Based in London, Sportsworld is atelevision-production, sponsorship-management, and event-managementcompany that’s publicly traded on the English stock exchange.

However, much of the day-to-day marketing of the ASP brand will comefrom SSM Freesports, which Sportsworld acquired last year fortwo-million pounds (U.K.). SSM has accumulated exclusive marketing andmedia rights to the Professional Windsurfers Association, The ArcticChallenge (in partnership with legendary snowboarders Terje Haakonsenand Daniel Franck), and the International Triathlon Union World Series.Apparently a solid company that’s close to the sports they cover.

The deal, which has been pending for the past several months, isexpected to go into effect January 1, 2001. The news puts a positive endto a year that’s been somewhat clouded by controversies surrounding theASP’s proposed 2001 schedule, and serves as a culmination of the ASP’sstrategic two-year revitalization strategy. The deal could also help theASP gain the support from one of the big-fish worldwide sponsors likeFord or Coca-Cola.

Another intriguing aspect to this story is that Bluetorch was innegotiations with the ASP for five months on a similar deal, but wasunable to reach agreement. But it wasn’t for lack of trying.

“Our team made at least four trips to Australia between February andJune, in an effort to negotiate this sort of deal with the ASP,” saysC.J. Olivares CEO of Bluetorch. “Despite responding to two differentsets of proposal criteria, we were ultimately unable to come to terms ona deal based on the ASP’s inability to guarantee in writing to us thatthe media rights we were seeking they actually had to sell.”

Bluetorch, which owns the media rights to both the Bluetorch Pro and theGotcha Tahiti Pro, is in a unique position as both an event sponsor andmedia content provider. “Unlike other event owners like Quiksilver,Billabong, and Rip Curl our primary business is the exploitation of themedia from our events and helping to support the ongoing growth of thelifestyle and sport of surfing. For us to lose control of our mediarights when we’re risking in the neighborhood of a million dollars issomewhat disconcerting.”

But whether this will occur is still unknown. “We’ve only been givenbs and pieces of what the deal might include at this point, but havebeen given no official summary from the ASP or SSM,” continues Olivares.”Despite our role as an event promoter and event owner on the tour –and despite the fact that Ian Cairns also sits on the ASP board — we’venot been kept in the loop about what this deal actually entails.”

Sportsworld, producers of over 1,000-hours of original programmingglobally each year, will produce and distribute all TV programming fromthe ASP World Championship Tour (WCT), working with dedicated regionalASP marketing offices in Australia, the United States, Europe, Japan,and South America.

The ASP’s web site will feature live web casts from all WCT events, aswell as receiving significant investment to develop the user interfaceand functionality of the site.

Sunny Garcia, 2000 world champion and World Professional Surfers (WPS)President on ASP Executive Board: “From what I know this is the bestpartnership that ASP could have ever hoped for. It’s good for thesurfers, the association, and the industry. We’ve never had a dealthat’s benefited every party before, but this is the best for everyone.I’m excited.”

According to Sportsworld, the brand will be working with strategicbroadcasters to create presenter-led high production quality programmingin the main markets for surfing — including the U.S., Australia, Japan,Brazil, and Europe.

“The ASP tour is the ultimate freesports property — it’s totallyunique,” says Shaun Whatling, co-founder of SSM Freesports. “The tourhas always attracted strong brand and media interest, but has beenunable to capitalize on it. Our involvement in the ASP will give brandsthe assurance that they will get the association they want — and themainstream exposure they expect. In the current climate, and stage inits evolution, surfing has never been more attractive.”

The production costs of the television shows and web casts will likelyadd up to at least one-million dollars a year. It’s also been speculatedthat SSM deal might help the ASP defray some of its administrationcosts.

So what happens to the remaining cash? Sources familiar with televisiondeals of this sort speculate that the SSM deal could be a windfall forboth the Top 44 surfers on the WCT tour and the brands running theevents (who own the media rights).

According to Stapelberg, however, the events don’t expect to see anysort of windfall. “The ASP increased the sanctioning fees from 25,000 to50,000 dollars last year,” he says. “If SSM comes to the table, I thinkthat would go back down to 25,000 dollars. From our point of view, we’restill paying 25,000 dollars. So I don’t view this as a positive or anegative. I’m reserving judgment until I see all the details.”

Stapelberg also points out that since surfing contests are in demand,the brands usually aren’t paying huge television production fees. “Thevalue of the SSM deal right now is hard to gauge,” he says. “If theySportsworld/SSM come and deliver and do an outstanding job withproduction, and the events are spared that cost of television exposure,then that’s good. But having said that, we normally don’t have to payfor most of the cost of production — so it’s kind of a moot point. Theonly thing we gain on with this deal is if they come in with greatdistribution — a package where we’re really getting great coverage onglobal scale.”

Is Stapelberg satisfied with the level of communication between ASP andBillabong regarding the details of the deal? “Absolutely not.”

Olivares says he hopes Sportsworld will give some sort of considerationto the media rights of the events: “There’s certainly an expectationthat we will get paid something through this deal, but in looking atrumored numbers, it’s hard to see how the event are going to end upreceiving anything directly from this deal.”

“Unfortunately, since we don’t know the details, we’re left to speculateas to whether this is a good deal for us. I’d like to see a detailedsummary of the deal and have the time to evaluate it, but apparentlythere’s certain forces within the ASP that don’t feel that those riskingthe most should have involvement in such a discussion.”

But ultimately is it a good deal for surfing and pro surfers? JakePaterson thinks so. At the Billabong Pro at Trestles in late SeptemberPaterson was excited about the pending deal: àƒ,à‚†žSSM will put a packagetogether to sponsor the ASP in regards to international televisionrights and the satellite feeds, and they’ll inject money into the ASPinternet site. They’re also putting a package together to sell the ASPto an international sponsor. Those guys see the value in surfing, andsee that all it needs is someone to push it into the television arena.”

“What it does is increase the value of the WCT,” continues Paterson. “Anevent will get worldwide television coverage and SSM will put up all themoney that it costs to do that. It’s a great deal.”

Olivares isn’t so sure. “At this point, it’s hard to say whether thisis a good deal for surfing. Our understanding is that it definitelydoesn’t include any women’s events. If the rumored dollar figures andterms are accurate, the net revenue to the ASP is likely to be muchsmaller than people might expect.”

TransWorld SURF Business will be updating this story as it develops.deal and have the time to evaluate it, but apparentlythere’s certain forces within the ASP that don’t feel that those riskingthe most should have involvement in such a discussion.”

But ultimately is it a good deal for surfing and pro surfers? JakePaterson thinks so. At the Billabong Pro at Trestles in late SeptemberPaterson was excited about the pending deal: àƒ,à‚†žSSM will put a packagetogether to sponsor the ASP in regards to international televisionrights and the satellite feeds, and they’ll inject money into the ASPinternet site. They’re also putting a package together to sell the ASPto an international sponsor. Those guys see the value in surfing, andsee that all it needs is someone to push it into the television arena.”

“What it does is increase the value of the WCT,” continues Paterson. “Anevent will get worldwide television coverage and SSM will put up all themoney that it costs to do that. It’s a great deal.”

Olivares isn’t so sure. “At this point, it’s hard to say whether thisis a good deal for surfing. Our understanding is that it definitelydoesn’t include any women’s events. If the rumored dollar figures andterms are accurate, the net revenue to the ASP is likely to be muchsmaller than people might expect.”

TransWorld SURF Business will be updating this story as it develops.