Quiksilver CEO Andrew Mooney’s has come out publicly questioning Quik’s future involvement in the pro surfing tour under new owners ZoSea. Phil Jarratt, noted writer and author of the book on the rise of the surf industry Salts and Suits reported on www. swellnet.com.au that Mooney told the Shop-Eat-Surf.com’s “executive roundtable” that Quiksilver’s ongoing commitment to the pro tour was in the “debating crucible” and that, “If you are going to contribute to the ASP, you have to figure out what you are getting for it…If you are not getting access to the content, not getting exposure for your brand and athletes, it’s not clear to me why we should be involved.”
As you probably well know ZoSea are the new owners of what was the ASP world tour. Sean Doherty in his excellent, and so far definitive article, The New ASP: How Pro Surfing Was Sold summed it up best saying, “ZoSea pitch wasn’t just for the media rights as this ASP board had seen several times in the recent past. It wasn’t a rebel tour. It was a play for the whole sandpit; the ownership and management of the ASP and its media rights. And the buyout figure attached to the plan wasn’t 25 grand this time (a reference to the payment made in 1977 when ASP took over the ISP) – it was nothing, donuts. The deal, however, would drop the cost of each event for the licensee from $3 million currently back to $1 million, and ZoSea banked on the brands wanting out more than they wanted in.”
However even with the reduction in cost of events, it still seems brands like Quiksilver aren’t completely sold. Sure the old model was expensive, but at least they had control. Nick Carroll, brother of Tom and one of the world’s best surf writers, has written the best summary of how the old ASP model worked on threads for realsurf.com. “From around 2001, the ASP was a company co-owned by the surfers and the WCT event franchisees. The event franchises were held by a range of entities, mostly various surf companies other than the Brazil event and Pipe event. The franchisees for their commitment got to run an event to ASP specs. They could draw in whatever sponsorship help they liked. They had to use the ASP event formulas and judging panel and provide ASP endorsed prize money guarantees including paying the prize money into a trust account 90 days in advance. They held all the media rights for the event by default. Over time, with webcasts and prize money increases and so forth, WCT events came to require budgets of between $2.5 and $3 million.
However the increasing costs of the events coupled with dire financial situations of the brands, meant something had to give. Carroll wrote, “It had become clear to the ASP board that this system was all on the edge of falling apart. Event costs were spiraling and the surf industry was struggling. The WCT had become a $40 million a year operation but the people paying for it were running out of money.”
That’s where ZoSea came in. Reportedly backed by American billionaire Dirk Ziff, who has yet to made any official comment despite persistent requests, ZoSea is being run by Paul Speaker and Terry Hardy. Speaker was on the board of Quiksilver, while Hardy was Kelly Slater’s long-time manager and the driving force behind the failed 2009 “Rebel Tour”.
Their aim Speaker said back in March is, “A global centralized sports league, and it’s essential for us that those who are already engaged with us, and those who are invited in, see it as one of the premier global sports in the world.” Doherty expanded this, saying, “The new incarnation will be a business. It won’t be a ratings calculator, it won’t be a marketing campaign for another business, it will be a business in it’s own right. ‘Centralized broadcast, centralized management, centralized sponsorship,’ as Speaker renders it down.”
ZoSea’s business model depends on them being able to sell good media deals and leveraging them into global sponsorships in a range of areas beyond surfing, be it airlines, pharma, energy drinks and God knows what else.
Mind you with time ticking away to their official takeover in 2014, the lack of information about any real sponsorship money is starting to cause some concern. They did big up, in their words, “A media/distribution agreements with ESPN, YouTube and Facebook across the linear broadcast, digital and social media spectrums.” However sharing free content and selling broadcasting rights are very different, with the later traditionally earning a lot more than the former. More positive, The Big Wave World Tour, which ZoSea acquired in the deal, has secured an umbrella sponsorship with app makers Xpreshon. But on revenue streams for the jewel in the crown, the World Tour, so far very little has been mentioned.
And with the surf brands, the actually companies who have invested in professional surfing for over 30 years, and who stayed on when the telcos, steelmakers and motor companies changed marketing managers and finished their three year sponsorship cycles, are now starting to question their involvement.
As Carroll highlights, how will Rip Curl for example, who were on record (along with Vans) as being against the ZoSea takeover, handle the Bells event knowing they don’t actually own it any more? After sponsoring it for more than three decades and having facilitated a vast network of local and national commercial deals ranging from meat pies to 4WDs, surely they’ll be pretty pissed come Easter.
Maybe in the end the surf brands will bail and maybe they won’t. Maybe ZoSea don’t see the surf brands as part of the solution, but part of the problem. Maybe they can takeover next year, run 10 elite events, raise the extra sponsorship cash, improve the broadcasting and commercial appeal and take professional surfing to the next level, all the way to the holy commercial grail of mainstream acceptance. Of course, in that last paragraph there is a shitload of of maybes.
As Nick Carroll says it all comes down to the bottom line. “Where’s the money? Watch the money, follow it,” he writes. “If ZoSea can’t find it, there’ll be hell to pay. As the saying goes, money talks and bullshit walks.”