Thoughts on ZoSea's 'takeover' of the ASP? Nick?

[adje]

http://www.surfermag.com/features/leap-of-faith/

The details are sketchy but just looking at the way this news has broken it looks like amateur hour.

Announcements made on the basis of a loose term sheet with no business plan. Surfers promised a "million dollar" pension (whatever that means). Unknown buyer with very little disclosure and no track record (maybe has some link to Kelly but this hasn't been disclosed).

Looks like the kind of deal that an organisation in complete distress would do out of desperation. Also seems like the ASP had very little advice on how how much it is worth as they don't seem to have received much in return for handing over control (if this is actually what happened).

Be keen to know what people think.

[Trev]

That IS a major change.

Reminds me of the V8 Supercars deal in Australia. They certainly came out of it all OK but there's more at stake in the World Tour.

[Dicky Beach]

Death throe's I reckon... the traditional sponsors are done for, and they know it, the new sponsors (nike, sweat shop, et al) aren't interested in the same model, so give it to the people that s'posed'ly had ESPN willing to chuck some coin at it a few years ago and hope for the best

[godsavetheking]

I read that they are looking at having a consistent commentary team from one event to the other. Hopefully that's what Lucky Al's last minute job application was all about

[Nick Carroll]

Yeah I am a bit suss of it to be frank.

Call me sceptical but the blunt fact is that a sport with a 36 year history of growth and thousands of people involved in it on all sorts of levels has just been handed over to a small US company with no track record in sports promotion, sales or admin.

My sense is that the $40 million a year being poured into the WCT by the big three cos and various associates has become untenable now in the current business climate, in other words they just can't afford it on their own anymore, and this alternative saves 'em a lot of money on the face of it. The surfers are on side with it because it promises prize money increases and some sort of pension fund set up at some undefinable point in the future.

The lack of information on the deal and lack of detail on how it will proceed is also pretty worrying, hard to imagine something this vague providing the push to the next level that the ASP so badly needs. They have given themselves a year to figure out the small print. But I haven't yet heard or read anybody come up with a clear set of goals for this arrangement. I'm on holiday at the moment so am limited re finding out much more at the moment, will see if I can get a bit of time with Terry Hardy in LA next week.

[Nick Carroll]

Adje, Terry Hardy, one of Zosea's principals, is Kelly's manager.

[godsavetheking]

I think that, for a subjectively judged sport like surfing, it's a pretty good thing to remove the perceived conflict of interest that can arise from owning an event licence as well as the contracts of several of the surfers taking part. So as far as that goes, I'm quite in favour of the ZoSea deal. They're probably going to have to tinker with the format a bit though if they want to expand the non-surfer audience base.

[Beerfan]

Obviously the big 3 care enough about pro surfing to drop it like a stone because it looks like hurting the bottom line. Signing it over with no clear business plan? hmmm, sounds like they were glad to be rid of it. Honestly, they are n the business of fashion, so why prop up an expensive enterprise like surfing contests? Not like people on the beach pay for a seat.

[carvin marvin]

^
Plenty of seats around a wave pool.
This company obviously is prepared to take a gamble and use Kellys wavepools to grow professional surfing.
Corporations owning the future so they can own the money that is in the future.
I still think the theory behind how webbers wave pool works is superior to Kellys wave pool.

[Nick Carroll]

Obviously the big 3 care enough about pro surfing to drop it like a stone because it looks like hurting the bottom line. Signing it over with no clear business plan? hmmm, sounds like they were glad to be rid of it. Honestly, they are n the business of fashion, so why prop up an expensive enterprise like surfing contests? Not like people on the beach pay for a seat.

Well I don't know about any of that. They still have their event franchises, and over the past 15 years, between them they have invested somewhere near $400 million in the pro surfing project. It's provided them with the only coherent global marketing narrative in surfing and has consistently helped open new markets.

Thing is these companies are steadily coming more and more under the gun from disinterested business people who really want to know why they are spending this kind of mad money on these surf contests, and surely they can be done a lot cheaper. (By "disinterested" I mean the word in its correct form, which means "without an interest in; unattached".)

[alakaboo]

I think that, for a subjectively judged sport like surfing, it's a pretty good thing to remove the perceived conflict of interest that can arise from owning an event licence as well as the contracts of several of the surfers taking part. So as far as that goes, I'm quite in favour of the ZoSea deal. They're probably going to have to tinker with the format a bit though if they want to expand the non-surfer audience base.

No conflict of interest in the fact the whole tour is now licensed to the manager of one of the top surfers?

[steve shearer]

this whole deal has a certain whiff about it.

[carvin marvin]

You certainly get the impression that Kelly Slug has no desire to give anything back to recreational surfers.

[alakaboo]

My bet is that Kelly will retire once he has full control.

[Roy_Stewart]

As long as they continue to get consumers to pay for their own brainwashing all will be well.

[alakaboo]

Do you take Visa?

[adje]

It's interesting to compare how backward surfing is compared to other sports. Say cricket for example. This is my understanding of how it works:

- The ACB employ cricketers, pay them a wage, cover insurance for injuries and gives them a pension when they retire
- The ACB sells TV rights to a TV station like Ch 9 for say 3 years for several hundred million dollars. Ch 9 sells advertising and makes money
- The ACB sells sponsorships to big companies
- The ACB sells corporate boxes etc
- The ACB sponsors junior cricket and is 'guardian' of the game

Compare that with surfing:

- The ASP employees surfers but reading the latest media doesn't seem to offer any pensions as this is part of the new deal
- The ASP probably sells the rights to certain events to major sponsors (like Quicksilver) but unlike other sports the sponsor (that has no media experience) puts together the broadcast

The big difference is that the ASP bundles the sponsorship with the media.

The new deal seems to be to have delivered all media rights to ZoSea. ZoSea will then play a roll like the ACB does in cricket. Selling sponsorships and organising media. But a few things don't make sense:

- ZoSea seems to have no track record doing this. Some links to Kelly (who knows how to surf but probably doesn't know much about marketing/media etc)
- the ASP (and therefore the surfers and surfing community it supports) don't seem to have gotten any value out giving rights to ZoSea.
- Why does ZoSea have seats on the ASP board? Channel 9 certainly doesn't get seats on the ACB board - massive conflict of interest here.
- What is ZoSea's incentive to be 'guardian' of surfing. Will they focus on surfing in the USA/Australia/Brazil???

It seems that the ASP are sitting on media rights worth millions of dollars. I don't know the stats but I would guess that webcasting has increased surfing viewing exponentially and reaches the exact audience that sponsors want to target. Why didn't the ASP put the media rights out to public tender? Why do a closed door deal with a company that might not even deliver.

I'm guessing that the big sponsors might actually benefit from this. They get to put their logo all over a competition and don't have to worry about the logistics of the broadcast.

It might all be fine but the way it's been handled so far does look pretty amateurish.

[adje]

Adje, Terry Hardy, one of Zosea's principals, is Kelly's manager.

Thanks Nick