Blood In The Water : Behind The Scenes At The ASP Executive BoardMeeting

An often acrimonious December meeting results in a 2001 tour schedulecompromise.

It’s been five months since the top 44 surfers on the Association ofSurfing Professionals (ASP) World Championship Tour organized and hitthe event owners with one wallop of a surprise.

During the now-infamous July 7 ASP executive board meeting in HuntingtonBeach, California, the five athletes on ASP board — representing anewly formed World Professional Surfers management group — flexed theirpolitical muscle to the breaking point. Fed up with what they consideredpro-event inequalities on the WCT tour, the surfers called unanimouslyfor a series of sweeping changes.

With the help of ASP CEO Wayne “Rabbit” Bartholomew (who cast thedeciding vote, giving the surfers the needed six-vote majority on theeleven-member executive board), the surfers voted to increase WCT prizemoney from 135,000 dollars per event to 250,000 dollars (the firstincrease in ten years). They insisted on a shortened tour that began inFebruary with the Pipe Masters (moving that event from its traditionalDecember time slot) and ended in late September at Trestles — givingthe surfers a needed break from the grind of traveling and freeing upthe calendar for increasingly important photo trips. The surfers alsovoted to move the Bluetorch event from its August time slot to one inearly September (and after the kids had returned to school). Events atHuntington would pay an additional 100,000 in prize money because thewaves there were only “standard quality.”

The event owners were caught completely flat-footed and left the meetinga bit shell-shocked. Billabong, with four events planned for the 2001’CT schedule, was hit in the wallet the hardest. In effect, the surferswere asking the brand to cough up almost an additional 500,000 dollarsin prize money per year.

“It’s hard to figure the surfers out at times,” says Billabong FounderGordan Merchant. “The surfers wanted the increased prize money and Iasked them to understand Billabong’s situation. I told them we steppedup to the plate when they wanted a ‘CT at Jeffrey’s and when they wantedan event at Trestles. All I was asking was for them to give me a littlecompromise here — have half of the increase in prize money changes inone year and half in the next. But they were adamant that they wanted itall in one year.

“It made it very tough on Billabong, who is floated as a publiccompany,” continues Merchant. “I would have thought they would’veunderstood the situation, but they seemed a little naive to a lot of therealism that happens at companies. We can’t just produce an extramillion dollars out of our hat. A ten- or twenty-percent pay increasewould’ve been fine, but when they increased the prize money by somethinglike 80 percent, it was an awful lot to take.”

But the surprises weren’t over. In September rumors began to circulatethat the ASP was preparing to ink an agreement with London-basedSportsworld Media Group (SMG) for exclusive worldwide media rights tothe ASP brand. While it was a poorly kept secret that these negotiationswere underway, the November 17 agreement between SMG and ASP stillcaught many of the event owners by surprise — including those with themost at stake. More troubling was the claim that several ASP boardmembers, nearly all of the event owners, and at least one member of thenegotiating committee putting the SMG/ASP deal together had been kept inthe dark about the details.

So it wasn’t hard to guess that all eyes would be on the North Shoreduring December 2 – 4, when the most significant action wouldn’t happenin the water, but in a meeting room at Turtle Bay Hilton during theDecember ASP Executive Board meeting. Could all these issues be resolvedto the satisfaction of everyone involved? Could an agreement even bereached?

It was a tall order, but at the end of the marathon three-day meetingthe surfers, event owners, and ASP management had managed to patchtogether a compromise that — while not satisfying anyone completely –might just be the best and only solution at this point. At the sametime, the board meeting highlighted the politically charged feedingfrenzy running just beneath the seemingly placid surface of the surfindustry. And make no mistake, there was plenty of blood in the water atthe meeting.

Won’t Get Fooled Again
On November 21 Billabong’s Merchant and others were calling for a”pre-meeting” of event owners on the North Shore just prior to theTurtle Bay event. The goal was for event owners and reps to meetprivately and form a consensus about the proposed schedule, the SMGdeal, event contracts, and the ASP leadership.

“I insisted on the pre-meeting because I felt there were so many issuesthat really did affect us all and there was a lot of common ground wecould reach before the general meeting even began,” says Merchant.

So on the evening of November 30 all of the event owners andrepresentatives — including Merchant, Triple Crown Executive DirectorRandy Rarick, Bluetorch Event Director Ian Cairns, Rip CurlInternational Marketing Manager Steve Kay, and Quiksilver MarketingDirector Kirk Wilcox — met at Cafe Haleiwa on the North Shore in aquest for solidarity. “It was a long meeting,” says Rarick, “and wedidn’t agree on every issue, but by the end we had reached a consensuson a number of topics.”

It was agreed that the Bluetorch event should return to its previoustime slot and that the idea of a 100,000-dollar Huntington Beach wavetax should be scrapped. The events also agreed that if the SMG deal wasgoing to be approved, the events would have to receive guarantees thatthe company would live up to its side of the bargain.

The event owners also supported Rarick’s goal of ending the tour at thePipe Masters during its traditional December time slot. Just two nightsbefore, at the North Shore Neighborhood Board Meeting, any remainingchance of a Pipeline 2001 tour kickoff was scuttled when Reid Inouye,who holds a permit for a February Pipe event, publicly announced that hewas shelving plans for a WCT February Pipe contest until 2002.

Finally, the event owners agreed that SMG and the ASP should solicitonly a single umbrella sponsor for the WCT tour so as to not dilute anyof the marketing punch associated with the ASP brand.

“The event owners had felt kind of worked over by the surfers during theJuly meeting,” says Rarick, “but by the end of the pre-meeting everyonehad agreed to the parameters that suited us.” Those parameters — tooversimplify — looked an awful lot like to the status quo before July7. How in the world would they persuade the surfers to agree to that?

The Grand Compromise
The first day of the meeting saw the events and surfers at odds witheach other. “There was a little polarization in the beginning, and itkind of came to a head with the scheduling conflict,” says Rarick.

The events, as planned, were pushing for the tour to end at the PipeMasters. As expected, the athletes were having none of it. Rabbit was ina particularly delicate position. “Rabbit was caught in the middle,”says Rarick. “I think he probably would have had a nervous breakdown ifhe had been forced to cast the deciding vote. He didn’t want to piss theevents off, but at the same time he didn’t want to let the surfersdown.”

As the day wore on tensions slowly mounted. At one point, all the namesof the events were written up on a board at the front of the room andthe tour as it was being proposed would have ended in Portugal. “All theevent owners just looked at the surfers and said, ‘Portugal?'” saysRarick. “The surfers went, ‘Yeah, we can make that into a good mediaevent’ and tried to bullshit their way through that one.” But no one wasbuying it.

At this point a break was called and the surfer representatives — SunnyGarcia, Jake Paterson, Kieren Perrow, Kate Skarrat, and Flavio Padaratz– huddled together, talking quietly and intently. After several minutesof discussion, some sort of decision was reached. According to Rarick:”The surfers approached me and asked, ‘If we finis
h in Hawai’i, can wefinish at Sunset?’ I told them it was possible and then broached thatidea with Rip Curl, who said ‘Okay, we’ll take it.'”

Rip Curl shifted the money and WCT status from its Hossegor event andswapped it with the six-star WQS status of the Rip Curl Cup. And justlike that, the tour was once again finishing in Hawai’i.

“By the second day of the meeting I think everyone realized, ‘Shit, ifwe don’t get together, we’re going to split this thing up.'” SaysRarick. “So, all the events agreed to cop the increase in prize moneyand the surfers compromised on the scheduling.”

“I reckon it went pretty good,” says Jake Paterson. “We came out of theHuntington Meeting thinking that we had conquered the world. The eventsdidn’t say anything about the prize money and everything, but we knew itwould hit the wall at the Hawai’i meeting. But we ended up comingthrough with a pretty good compromise. Everyone is going to be paid alot more money — 250,000 dollars total purse and 30 grand U.S. for awin — so it’s hard to complain about that. The tour schedule is reallypretty good. There’s big breaks in the middle of the year and goodbreaks before Hawai’i and a pretty good break after.”

The Pipe Event
Of course, having the Rip Curl Cup finish the tour effectively puts thePipe Masters off the WCT schedule for the foreseeable future, but thatseems to suit Rarick just fine. “What Pipe Masters will become is achampions of champions event,” he says, “where we’ll invite all theevent winners and anyone else from the WCT who wants to compete andcombine those surfers with the Pipeline elite. It will be aninvitational Pipe Masters event like it used to be.”

“At this juncture, I’m quite happy to have it a specialty event,”continues Rarick. “In some ways it allows the surfers who ride Pipelinethe best to showcase those skills — rather than just a field of 44surfers. I’m happy. I have the Rip Curl World Cup finishing the tourhere in Hawai’i — which was my main argument against the new schedule.And although I’d still would’ve liked to see the tour finish atPipeline, Sunset is in some was even better. It’s more versatile wavethat doesn’t favor such a specialized surfer.”

Bluetorch Hits A Time Crunch
The 100,000-dollar increase in prize money at the Bluetorch Pro inHuntington Beach also went by the wayside. “We said either you want theevent or you don’t,” says Merchant. “I think the surfers feel that theHuntington Beach event is below standard compared to a lot of the breaksthey get in the world. But the events were saying, ‘Hey, this is acommercially viable contest and it should be on. You can’t have it allyour own way. We have to make a rational commercial decision here.’Obviously the surfers aren’t that experienced in those things and totheir credit they bowed to us and we went on.”

But not everything went exactly as planned for Bluetorch. The brand hadasked for a contest window from July 28 until August 12 — plenty oftime to run both the WCT and WQS events they’ve held in the past.Instead, they only received an event a window from August 1 – 5.

“Everyone shuffled their schedules a bit so we can go around the worldin one motion, instead of having to go back and forth,” says Paterson.”Ian just had the opinion that he had to have his contest in the middleof holidays — which ruins everything for the whole tour. We gave himtwo weeks for his ‘QS and his ‘CT backing on to Trestles at the end ofAugust, start of September but he didn’t want those dates. He said ithad to be at the start of August. We just went, ‘Well, you can have fromthe August 1 – 5 to run a ‘CT or a ‘QS because we’re sick of you ruiningthe schedule. Now we have to go to South Africa back to America and thenback to Europe which is a lot of traveling.”

Bluetorch CEO C.J. Olivares isn’t buying it: “There’s a reason they onlygave us four days, and that reason is they don’t want an event there.”

Olivares says it would be impossible to run both the WQS rated U.S. Openand the WCT rated Bluetorch Pro in the time provided. “We now have awindow to run one event, and we need to decide which event to run,” hesays. “We know there’s a sentiment from the top 44 that they don’t wantto come to Huntington.”

The Bluetorch event is the only part of the schedule that’s stilltentative, and the ASP has given Cairns until December 21 to decide. Atthis point, Olivares seems frustrated with the entire process: “We justhave to sit and think a little bit and really search out if there’s away to make this work.”

SMG Deal Poised For Approval
Surprisingly, the SMG deal, which at one point appeared to be headingfor a bitter fight, slipped through the meeting with hardly a struggle.”Ostensibly without the SMG deal the ASP is broke,” says Rarick. “Itwould be up to the events to step in an pay for the association, and noone wants that to happen.”

However, this shouldn’t be taken to mean that the ASP is making a baddeal. “They SMG and its action-sports subsidiary SSM Freesports dovery good work,” says Olivares. “I saw their show on the ArcticChallenge snowboard event and a show on Nias — they were both reallystrong shows.

“I don’t have a problem with SSM on this,” continues Olivares. “If Iwere negotiating the contact, I would be asking for the same thing,which is worldwide exclusive rights where the only thing you give up isdomestic territory to each of the events on the ‘CT.”

But Olivares says there’s one significant problem with the deal as it’sset up now. Event owners running offshore events such as the Gotcha Proin Tahiti or the Quiksilver Pro in G-Land, can’t designate a domesticterritory. That means that even though Bluetorch owns the Tahiti event,it has no media rights to the event. “Since we’re a media company, thatmakes it very difficult for us,” says Olivares. “and it’s a problem Ihaven’t come up with a solution for yet. The terms of my licensee rightnow don’t allow me to broadcast the event I own in the United States,and that’s a big problem. Of course, as the only media company with anevent, we recognize that we’re a bit of an island in this regard.”

In fact, Bluetorch will have to make a deal with SMG to cover any of the’CT events except the Bluetorch Pro. So, is just that type a deal aninevitability? “There have certainly be discussions,” says Olivares,”but I don’t know if I’d call it an inevitability. There are mutualbenefits if we do a deal with SSM. I think it’s good for SMG, it’s goodfor ASP, and it’s good for Bluetorch.”

Of course that assumes that SMG will buy into the performance guaranteescurrently being devised by the ASP board — which are likely to includesecuring distribution in critical markets including the United States,selected countries in Europe, Australia, Brazil, and Japan.

“It all comes down to media performance: can they deliver a TV packageand Internet deal to the satisfaction of the events,” says Rarick. “Ifthey can, the events are willing to give up their media rights.”

However Merchant, who was on the four-person ASP negotiating teamputting the deal with SMG together, doesn’t seem overly impressed withthe deal as it stands now. “I don’t think it really offers the eventsthat much,” he states flatly.

Nevertheless, Merchant says everyone is now going through exactly whatthose performance guarantees should be. “We’re in the phase right now ofgoing through each event and assessing what their normal distributionwas in regards to television, Internet, and video,” he says. “Then we’llput that down as the bottom line of what SMG has to deliver. If theydon’t meet that criteria, then they’ve voided their contract.”

Is one of the criteria SMG bringing a umbrella sponsor to the tour? “Ithasn’t been,” says Merchant, “but it probably should be. I left themeeting a little early because I spat the dummy — but hopefully that’sin there.

Blood On The Floor
For those unfamiliar with the Australian idiom, “spat the dummy” meansto be extremely upset at something. So, what made Merchant so angry thathe left the meeting early? Accord
ing to several sources, a few people atthe meeting were openly disrespectful to Merchant when it came to theGold Coast specialty event.

In fact, the rivalry between Quiksilver and Billabong seemed to bereaching Nuclear levels. “There was blood on the floor between those twobrands by the end of the meeting,” says a source who asked not to beidentified.

It all seems to have started with a new regulation that brands couldhave a maximum of three WCT events. According to Stapelberg, Billabongwas aware that such a regulation was likely to be approved at themeeting and that was one of the reason for turning Billabong’s GoldCoast WCT event in the an American/Australian challenge. However, whatthey didn’t expect was Quiksilver’s reaction. According to Rarick:”Quiksilver came in with their shopping cart saying, ‘Hey, we want anevent in Europe, and we want an event in Australia — kind of a veryaggressive position for Quiksilver on sponsorship procurement. Ineffect, Quiksilver was saying, ‘Hey, if you don’t want the time slot, wedo.'”

The surfers, eager to see a CT event there, supported the idea of aQuiksilver WCT event on the Gold Coast. As it stands, the 2002 schedulewill include as Quiksilver sponsored WCT event on the Gold Coast.

According to Paterson: “Quiksilver said they didn’t want the Billabongspecialty event to go before their event. Quiksilver wanted to have thefirst event of the year on the Gold Coast. The surfers had the point ofview that we couldn’t afford to lose a contest for a specialty event, sowe had to vote for Quiksilver’s stand. It was pretty bad the way it allwent down. It was just heavy. There was no compromise. It was this wayor it was no way. I was really disappointed Quiksilver and Billabongcouldn’t have worked out some sort of compromise. The surfers were putin a difficult position.”

However, Billabong U.S.A.’s V.P. of Marketing Graham Stapelberg says allthe blame doesn’t lie on the surfers: “I don’t think you can pass allthe buck back on them. They were forced to vote a certain way. Really, Idon’t think the ASP management handled it in the best light. They didn’tstand up for it the Gold Coast specialty event or anything. They justtook a back seat and it kind of got heated between Quiksilver andBillabong.

“We were a little disappointed in that fact that there was littleacknowledgment or acceptance of our specialty event at this point,”continues Stapelberg. “It’s still to be reviewed and they’re going toget back to us. We’re just going to wait and see and see what theoutcome was.”

Merchant says he understands why the surfers want a Gold Coast WCT. “Iwas annoyed, however, that the ASP gave it to Quiksilver and thenrebuked me on having a specialty event a month before it,” he says.”When I had a ‘CT on the Gold Coast, Quiksilver came in and dropped awomen’s QS right before it. I thought that was a little unfair. I wouldhave hoped that with Billabong contributing so much to the tour, thatthe ASP would have been a little more understanding.”

Stapelberg is even more direct: “We felt that as a company that willcontribute more money than SMG over the next five years to the ASP, andbased on the fact that we sponsor 65 percent of the junior qualifyingtour, and the fact that we sponsor the junior world championships, andthat fact that we sponsor more WCT events — for both men and women –than any other company at this point, there was a lack of acknowledgmentand consideration for what we wanted to do at the specialty event.”

Stapelberg says he doesn’t mind rivalry between brands. “We learn tolive with things,” says Stapelberg. “If that’s what Quiksilver wants todo, then that’s what Quiksilver wants to do. Where we had a problem wasthe lack of respect Billabong received as a brand and for what we’vedone for pro surfing. We’re still the largest contributor to prosurfing. No one can — or will — dispute that.”

So will these ill feelings affect Billabong’s enthusiasm to sponsor theWCT? “We don’t know yet,” says Stapleberg. “We’re going to revieweverything. We’re going to review our entire situation with the ASPgoing forward.”

Conclusions
By 10:00 p.m. Monday night, the event was finally over — and mostadmitted that they were happy a compromise was reached.

“It’s all looking pretty good,” says Paterson. “We were all skepticaland thought there could be like a six-stop tour next year. We werefreaking out a bit. But we came to the meeting and they were basicallyfighting over events and fighting for the liscenes. So we’re prettystoked about all that.”

“The tour as it stands is probably a reasonable compromise,” saysMerchant, who still doesn’t like the idea of a Pipe event in February.”I think that puts a whole lot more pressure on the North Shore and Ithink that’s bad. The North Shore cops enough as it is without extendingthe season on them. I think having the Rip Curl at Sunset and having thefinish at Pipe is the ultimate tour. That would have been far preferableto what they have done.”

Rarick also seems glad the process is over: “At least for 2001everything is fine, what 2002 will bring — I’ll worry about that whenit comes up. All in all, I think we can lurch forward for another year,and at least not be strangling each other as we do it.”

Merchant says the ball is now in the ASP’s court: “The onus is on themnow to see what sort of a job they can do. I’ll wait and see. So far,I’m not all that impressed.” Over the phone, Merchant lets out a longfrustrated sigh: “I don’t like to be negative, but I also want to tellit how I see it.”

Related links:

ASP Signs With SSM Freesports

SSM Answers Some Questions

Rabbit Talk About The SSM Deal