Tuesday, 11th June 2007

HEADLINES OF THE DAY

Lagardère Agrees Deal to Acquire IEC

Lagardère SCA agreed a deal to acquire the entire capital of International Events and Communication in Sports (IEC), the Swedish sports rights specialist founded in 1994. Following the acquisition, IEC will become a wholly-owned subsidiary of Lagardère Sports in order to leverage numerous potential synergies with the Sportfive and Newsweb companies, also owned by Lagardère.

IEC’s sports rights management business principally covers tennis, football, volleyball and athletics. The company markets over 225 sporting events in Europe (a region that represents 75 per cent of IEC's contracts), the USA and Asia, acting primarily as agent but also as rights holder. Drawing on its diverse sports rights portfolio it offers bulk deals encompassing several sporting disciplines, enabling it to provide its clients with a full array of turnkey sport programming solutions.

IEC’s base of 125 clients - of which the 10 largest represent 46 per cent of the company’s sales - mainly comprises television groups from a wide range of geographic regions and which are expected to account for 60 per cent of IEC’s sales for fiscal 2007. The company has also recently broadened its client base to include new media. It now provides program offerings and other solutions to IPTV operators (such as PCCW in Hong Kong) as well as through broadband services in the UK and USA and HDTV in the USA. Source: Sport Business, Total Content + Media, 11th Jun 2007

Agency Consolidation Continues with IEC in Sports Takeover

French media group, Lagardère announced its second major sports agency acquisition in little more than six months with a deal to take over Swedish firm IEC in Sports, is the latest sign of consolidation in the agency market. IEC joins Sportfive, whose €865-million ($1.16-billion) takeover by Lagardère was approved by the European Union in January. The IEC deal entails an initial cash payment of €43 million followed by deferred payments over the next three years of up to €37 million based on the achievement of income and cashflow targets.

This is the second time that IEC, which was founded in 1994, has been the subject of a takeover. In 2001, the agency was acquired by Sports Resource Group, the erstwhile publicly-traded sports acquisition vehicle chaired by sports and media entrepreneur Chris Akkers, for £17.5 million ($34.4 million). Jonas Persson, the chief executive of IEC does not anticipate a similar outcome this time round, as Lagardère is backed by a 'big industrial group.'

It is felt that the tie-up with Lagardère will enable IEC to offer enhanced bulk deals by combining rights and to compete more effectively for contracts, while giving the new owner influence in Asia and the production and new media markets. The acquisition is subject to approval from the German antitrust authorities and is expected to be completed by the end of August.

The dealings by Lagardère, together with those of rival agency IMG, which made several significant purchases since it was acquired by investment firm Forstmann Little in 2004, have been symptomatic of the consolidation in the agency industry in recent years. Persson said: 'Lagardère has come into the market as a new player and once it started to make its moves, there was a domino effect. There has also been the change of ownership at IMG.'

Recent acquisitions by IMG have included the CSI Sports group of companies, which is involved primarily in soccer and cricket, Quintus, which organises high-profile tennis and triathlon events, and the UK-based speedway motor cycling promoter BSI Speedway. Persson said that Lagardère 'will look to unlock any synergy' in integrating IEC, which will nonetheless 'be run as a separate company.'

IEC has a base of 125 clients, of which the 10 largest contribute 46 per cent of the company's sales. Sales to television groups from various regions are expected to account for 60 per cent of IEC's sales in fiscal 2007. Sales and earnings before interest and tax both increased by 40 per cent in the year to the end of August 2006, to €17 million and €4.1 million respectively.

Major properties marketed by IEC in Sports include soccer's Portuguese Super League, volleyball's men's and women's World Cup, the swimming World Cup and events organised by the International Association of Athletics Federations, the Badminton World Federation, the International Table Tennis Federation and men's tennis' ATP Tour and women's tennis' WTA Tour. Source: Sportcal, 11th Jun 2007

Wrestling Seeks Sponsors

The WWE is ready to rumble in the marketing ring. World Wrestling Entertainment Inc. is expected to announce today that it’s shifting the focus of its marketing as it attempts to entice year-round sponsors for its television shows, pay-per-view events and online offerings. With an eye toward big brands, WWE is pushing to create exclusive partnerships with advertisers that would include branding rights, product placement and ads on its Web site and magazine, said Ethan Green, vice president of sponsorship.

The goal is to elevate corporate sponsorships from a secondary money-maker to a primary source of revenue. Particularly popular among young males, the WWE has transformed in recent years from a fringe buy for advertisers to a more mainstream option. And well-known brands, like AT&T and Subway have gotten in the ring with wrestling and its stars.

Green plans to start seeking out Fortune 500 companies in the coming month in hopes of lining up about six official sponsors going into 2008. (The cable and broadcasting companies that run WWE’s TV programs have all the rights to sell ads in between the shows.) But it won’t be a cakewalk. With so many professional sports seeking sponsors, the WWE faces a lot of competition. But the WWE’s blended elements of athleticism and circus-style theatrics makes it unique, Green said. Source: Boston Herald, PW Insider, 11th Jun 2007


INFO BOX

Advertising: Product/Brand Placements
Source: Info IQ, 11th Jun 2007

* TV placements remain the dominant choice of brand marketers, accounting for 71.4% of global spending in 2006 at $2.40 billion, with projected growth of 33.9% in 2007.
* Film placements comprised 26.4%, or $885.1 million, of global spending in 2006 with forecasted growth of 20.5% this year, driven by more cross-promotional packages linking movie placements to ad spots, websites and point-of-purchase displays, as well as virtual embedding for local targeting.
* Placements in other media account for only 2% of total spending, growth will exceed 30% over the next several years due to increased demand for videogame and online placements aimed at the elusive 18- to 34-year-old demographic.
* The Americas will remain the largest and fastest-growing region for paid product placement in 2007, with projected spend of $3.79 billion and growth of 31.2%, followed by Asia and Europe.
* The United States will remain the world's largest market for product placement in 2007 with spending of $2.90 billion, followed by Brazil, Mexico, Australia, and Japan.
* China will be the world's fastest-growing product placement market in 2007 with spending growth of 34.5%, trailed by the U.S., Italy, India and Canada.


SPORTS SHORTS

* Singapore caused the first upset at the Sudirman Cup with a 5-0 victory over Sweden in Glasgow on Monday. The Swedes were seeded No. 8, but lost the first three matches to the 11th seeded Singapore, with the 2002 Commonwealth Games champion Li Li clinching victory with a battling win over Sara Persson in the women's singles. Japan began the round-robin campaign in with a win over the Netherlands. Chinese Taipei also beat a higher seeded team with a 4-1 win over Germany. Source: Channel News Asia, 12th Jun 2007

* P. Ganga Rao, the suspended chief operating officer of the Badminton World Federation, has vowed to fight all the way if the decision is not reversed. Ganga was suspended by BWF on Tuesday, and his fate will be decided at a domestic inquiry on June 29. Ganga confirmed he has consulted a lawyer and will make his next move after the inquiry. Apart from being barred from entering the BWF secretariat until the domestic inquiry is over, Ganga has been stripped of his position as a delegate to BWF’s Annual General Meeting in Glasgow. Ganga refused to give details on the allegations against him so as not to complicate the legal proceedings. Source: The New Straits Times, 9th Jun 2007

* Women hockey teams in the world will be on Ten Sports in the ATA Hockey Champions Challenge, held in Baku Azherbaijan. America, Korea, New Zealand, England, China and hosts Azerbaijan will enjoy one week of competition to decide who can go through to the elite group of women's hockey in the Champions Trophy. The event airs from 12-17 June. The competition is of particular importance as the teams focus on Olympic qualification for Beijing. Source: Indian Television, 11th Jun 2007

* The Nimbus-Star TV row over termination of their cricket deal may turn into a court feud. On Monday, Nimbus Sports moved the court in Singapore seeking damages of Rs1,200 crore from Star India. The deal between Nimbus Sports, holder of Indian cricket telecast rights, and Star India was reviewed following a mandatory government order for private broadcasters to share cricket feed with Doordarshan. Nimbus is taking Star to arbitration under English law in Singapore on 3 counts: The delay and default in payment of minimum guarantee; non-performance on contracted deliverables and suspicion of willful sabotage owing to Star’s relationship with ESPN and subsequent launch of ESPN’s Star Cricket. Source: Economic Times, 11th Jun 2007

* Sina Corp said it has reached an agreement with Google to cooperate in the areas of search and advertising. Under a strategic partnership, Google's search service will be embedded in Sina's search box. The two companies said that advertisers on Sina will be able to maximize their brand value, leveraging Sina's large traffic and Google's online advertising system and experience. Both companies hoped to in the future to include cooperation in news and other content areas. Source: Daily News & Analysis, Telecom Asia, 11th Jun 2007

* ESPN has expanded its global on-line business through the acquisition of Cricinfo, the world’s largest cricket website, in a deal with The Wisden Group. The deal enhances ESPN’s on-line portfolio, which includes ESPN.com, ESPNdeportes.com and ESPNsoccernet.com. ESPN’s digital media initiatives deliver a combination of live and on-demand sports events; up-to-the-minute news and information; scores, stats and analysis; on-demand and downloadable video and audio; fantasy sports, and video games, mobile and other non-linear platforms. Source: Sport Business, Sportcal, Worldscreen, Business Standard, Business Line, Brand Republic, 11th Jun 2007

* Golf’s Asian Tour today reacted with dismay to plans by the European Tour to stage a tournament in India in February. The Asian Tour claims that it did not sanction the tournament, and accused its European counterpart of having ‘an invasive position on Asia.’ A statement released by the Asian Tour read: ‘This move is clearly unethical and against the protocol that exists within the framework of the International Federation of PGA Tours, of which both the Tours are full members.' Source: Sportcal, 11th Jun 2007

* Organisers of the Volvo Ocean Race, where 70ft racing yachts compete for the fastest around the world passage, have decided to capture the event in high-definition. The 2005-2006 event had plenty of TV footage, as well as extensive online coverage. The 2007-2008 event will fully embrace HD, with special on-board steerable cameras as well as satellite uplink facilities to get the images back to base. The next race casts off in October 2008 and the organisers are using LiveWire Digital for connectivity. Source: Rapid TV News, 11th Jun 2007

* Fox Soccer Channel has expanded its partnership with English Premier League to include exclusive U.S. mobile and Internet highlight rights for the 2007/08 through 2009/10 seasons. Fox Soccer Channel will offer EPL highlights, commencing with the new season in August. EPL mobile and Internet package includes highlights of all EPL matches, weekend ‘round-up’ and weekly highlights featuring goals, saves, players, and teams. The mobile package also features ‘in-match’ highlights allowing users to get EPL highlights in near-real time. Source: Business Wire, 11th Jun 2007

* Simon Mason, Arqiva’s head of new product development, says while he remains in favour of multi-channel television DVB-H content being broadcast to mobile and handheld devices, he thinks that much can be achieved with cached content. “I am not sure the 20 channel concept is the right one. Only news and live sport needs to be live. Almost everything else could be cached. I think caching to the mobile is the solution [for bandwidth scarcity]”. He said the – then unused – bandwidth could be used for other revenue-generating services. Source: Rapid TV News, 11th Jun 2007

* Mohamed Al Fayed, the chairman of Fulham, has accused the EPL of failing to fully exploit its commercial rights despite generating £2.7 billion ($5.3 billion) from new three-year domestic and international television deals. As a result of the new contracts, each Premiership club is set to minimally earn £40 million in prize money next season. However, Al Fayed is unsatisfied and claims that expenses eat up most of the income. Source: Sportcal, 11th Jun 2007


MORE NEWS

Indonesia/General: Host for First Asian Beach Games

The Bali Asian Beach Games Organising Committee (BABGOC) is preparing to play host to 45 countries in the first Asian Beach Games from October 18 to October 26, 2008. Organisers are hoping to draw 5,000 athletes to compete in 13 aquatic and beach events such as sailing, surfing, windsurfing, beach soccer, beach volleyball, marathon swimming and triathlon. The Games will take place in venue clusters along the Bali beaches of Kuta, Sanur, Serangan, Benoa Harbour and Jimbaran.

The Asian Beach Games will be held biennially and joins the Asian Summer, Winter, Indoor and Regional Games, of all which are sanctioned by the Olympic Council of Asia (OCA). Director General of the Olympic Council of Asia (OCA) Mr. Husain Al-Musallam commented "Bali was appointed unanimously without a bidding process while there were four other countries that were interested in hosting the 1st Asian Beach Games ".

With preparations well underway, BABGOC has recently launched its new brand identity for the Games. The logo has been designed to resemble an image of the gate to the Balinese house of worship, signifying the hospitality of Bali in honouring and welcoming people from all over Asia. The logo incorporates water, sun and sand elements, which capture the essence of the sporting event whilst combining the brand imagery of the Olympic Council of Asia.

The cost of staging the event is estimated at over Rp300 billion. The Games will be strongly funded by the Indonesian Government. The event is also expected to attract large interest and support from the private sector. After Bali, the next event will be held in Oman in 2010, China in 2012 and the Philippines in 2014. Last week, Thailand lodged its bid to host the event in 2016.

Promoseven Sports Marketing (PSM), the Official Worldwide Marketing Agent of the OCA will manage the commercial marketing programme, bringing experience which spans both the Asian Games and Asian Indoor Games in Bangkok, Macau, Doha and Guangzhou. Source: Sport Business, 11th Jun 2007

Elsewhere/Rights: RTL Makes Move For Eight-Game Euro 2008 Package

RTL, the German commercial broadcaster, is in talks with Sportfive regarding the acquisition of an eight-game package of rights for soccer's Euro 2008 European Championships. Public-service broadcasters, ARD and ZDF, have failed to agree a price with Sportfive for all 31 games at Euro 2008, and RTL has now made a proposal to Sportfive for eight matches, including the opening match and one match involving Germany.

The report claims that Sportfive is demanding €35 million ($46.7 million) from RTL and also that ARD and ZDF will complete a €105-million deal for the remaining 20 games, signalling an end to long-running negotiations between the agency and SportA, the public-service broadcasters' rights acquisitions agency.

Sportfive was originally said to be targeting €160 million from the German market but it has appeared increasingly likely that it would not hit its target after months of negotiation with SportA failed to secure a deal for all 31 games. A deal to divide the rights between ARD, ZDF and RTL was first reported to be close to completion earlier this year but failed to materialise.

A lack of exclusivity on offer to pay-television operators has dampened the bidding war that Sportfive had hoped for in order to reach its initial target for the German market , with Premiere, the cable and satellite broadcaster, having ruled itself out of the auction. Should the reported €105-million contract for ARD and ZDF to show 23 matches of Euro 2008 be concluded, it would be equivalent to €4.57 million a match, exceeding the €3.75 million a game that the broadcasters paid to show 48 out of the 64 matches at the 2006 World Cup. Source: Sportcal, 11th Jun 2007


ARTICLES, COMMENTS & OPINIONS

Boxers, Fighters Engage in Verbal Sparring
Bom Emanuel Jr comments on The Miami Herald, 11th Jun 2007

After peace reigned for much of the past five years between boxing and its upstart competition, mixed martial arts, the war of words is escalating and the gloves soon might come off. Especially after boxer Floyd Mayweather Jr. recently called out the Ultimate Fighting Championship and poster boy Chuck Liddell, its former light-heavyweight champion.

''UFC ain't [nothing],'' Mayweather said before his May 5 victory over Oscar De La Hoya, which earned him the World Boxing Council super-welterweight title. ``It ain't but a fad.''

Liddell countered: ``I think it was a sign of the times when a boxing show is taking shots at us to try to sell more pay-per-views. To promote their fight, they're bringing us up. A couple of years back, they wouldn't even mention us. Now they're talking about us. Floyd even said afterward that he was doing it just to pump up the fight.''

To the dismay of boxing purists, the UFC has displayed staying power. The Las Vegas-based company, which will hold a fight Tuesday night at the Seminole Hard Rock Hotel and Casino in Hollywood, boasts pay-per-view sales that put it in a three-way battle for supremacy with boxing and the scripted World Wrestling Entertainment.

According to data compiled by The Associated Press this year, the UFC averaged $20 million for each of its 10 pay-per-view events in 2006, higher than wrestling ($12.5 million) and boxing ($16.1 million).

''We've been at the tipping point for a while now,'' said UFC president Dana White, who added that his company posted seven of the top 10 pay-per-view buy rates from 2006. ``We finally got to the point where we can't be denied any more. I think we've been kicking boxing's [butt] and wrestling for the last year and a half now.''

Mixed martial arts -- a form of competition grounded in kickboxing, jiu-jitsu and wrestling, among others -- has experienced a sharp rise in popularity. The sport is a ratings juggernaut among men ages 18-34.

Those interested locally will get another chance to see what the excitement is all about Tuesday, when Spencer Fisher faces Sam Stout in a rematch of one of 2006's best lightweight bouts in the main event at Hard Rock. Also, wrestling expert Jon Fitch will take on Brazilian jiu-jitsu specialist Roan Carneiro in a 170-pound matchup.

The UFC has held two other events at the Hard Rock, and both were sold out. ''Both shows were extremely successful,'' said Bernie Dillon, senior vice president of entertainment for the Seminole Hard Rock Hotel and Casino. ``Each show we did we sold out 5,500 seats and it gave the Seminole Hard Rock millions of dollars worth of exposure on Spike TV.

BATTLE FOR DOLLARS

Once struggling merely to survive, the UFC now thrives under White's leadership. Multiple shows are held each month in the United States and internationally, and it has its own reality series, The Ultimate Fighter on Spike TV.

The demographics of the viewers could become a pivotal component to the future of boxing and mixed martial arts. Boxing's audiences are generally older, while the UFC tends to appeal to males 18-34. ''Right now, for the youth, they don't want to see boxing go 10-12 rounds,'' boxing promoter Don King said. ``It used to be 15 rounds. With the ultimate fighting, you get excitement from the beginning until the end because the guys are kicking, butting, turning and twisting until something happens untoward where it pays out.''

Boxing is still capable of putting on mega events, as demonstrated by the Mayweather-Oscar De La Hoya bout. Preliminary numbers indicated a record 2.15 million purchases, besting the record of 1.99 million buys for Mike Tyson's second fight with Evander Holyfield in 2002 and making it boxing's richest event. At $54.95 per buy, the fight generated upward of $120 million.

''This puts to bed this theory of boxing being in trouble, or being dead or dying,'' Ross Greenburg, head of HBO Sports, told The Associated Press. ``This fight would have never materialized if boxing was dying.''

By contrast, the UFC's December pay-per-view event, which pitted Liddell against Tito Ortiz, was estimated at more than one million purchases. The privately owned company did not release a final number, although Meltzer's industry sources confirmed the buy rate topped one million.

''It was very successful,'' White said. 'We did what we thought we were going to do, and I'm thrilled. Every time we do a pay-per-view, I say, `This is the biggest fight.' It just keeps going and going.''

WAR OF WORDS

Part of making a pay-per-view event a success is the hype. No one does it any better than the fight industry. In its macho world, taking an insult without a comeback is a sign of public weakness. Pound your chest. Pump your fists. Shout at the top of your lungs. Whatever it takes to attract attention. ''Anybody, like I said before, anybody could put a little tattoo on their head, put a little tattoo on the arm, plus the piercing and go out there and street fight,'' Mayweather said.

The tattoo comment was a reference to Liddell, who sports a Mohawk and tattoo on his scalp. ''We should take Chuck Liddell, and this is me, and we ain't got to take the best heavyweight, we just need to take a good heavyweight and let Chuck Liddell fight a good heavyweight under Mayweather Promotions,'' Mayweather said. ``And if Chuck Liddell beats him, I'll give him $1 million out of my own pocket.''

Days later, during a teleconference to hype one of his events, White countered. ''Mixed martial arts and boxing are apples and oranges,'' White said. ``Floyd Mayweather just came out and said some stupid [stuff] about Chuck Liddell.

``He'd pay a million dollars if Chuck could hang with a heavyweight boxer. How about if he pays a million dollars to see if a heavyweight boxer can fight MMA with Chuck Liddell? Or even better, I'll put up a million dollars of my own money if Floyd Mayweather can sell more than 10 tickets without Oscar De La Hoya.''

BOXING LACKS `A HERO'

MMA's rise coincides with a down cycle for the heavyweight division -- traditionally the most glamorous in boxing. All four sanctioned belts are held by fighters from the former Soviet Union, including Sultan Ibragimov, who defeated American Shannon Briggs on June 2 for the World Boxing Organization title.

The downturn among heavyweights leaves boxing without a marquee name other than Oscar De La Hoya.

''Boxing is in trouble because the powers-that-be in boxing have done nothing to secure the future of the sport,'' White said. ``. . . When Oscar De La Hoya goes away, who's the next big star that people are going to pay to see box?''

Despite the lack of premium future stars, King said boxing's future remains bright.

''Boxing is the equal opportunity sport now because there [are] no heroes,'' he said.

``There [are] no standout individuals. . . . Boxing is great. We just don't have the heroes, the fighters that will be a breed apart from any other. I think boxing is strong. I feel good about it.''

Ratings show boxing remains a healthy and viable form of entertainment.

''We saw a significant increase in '05 over '04,'' said Ken Hershman, senior vice president and general manager of sports programming for Showtime Networks Inc., which aired two cards from mixed martial arts start-up company Elite XC this year.

``Then we leveled out. We couldn't expect to have those gains yet again in '06. [Boxing] remains very highly rated, if not the highest rated, component of Showtime's programming. I think it's a tremendous franchise for us.''

White said the perception of the Mayweather-De La Hoya fight saving boxing was ridiculous. He believes the sport is still headed downward and attributed the slide to greed.

''Boxing is in trouble for one reason, and one reason only -- greed,'' White said.

``They're all greedy. Everybody in it is greedy. Bob Arum and Don King have absolutely destroyed that sport, stuck their hand in, ripped the life out of it and shoved it in their pocket.''

WHO WOULD WIN?

Putting aside the question of finances, the biggest question remains: If a top-ranked boxer met a top-ranked mixed martial artist, who would prevail?

''UFC's champions can't handle boxing,'' Mayweather said during a recent news conference.

``That's why they are in UFC. Put one of our guys in UFC and he'd be the champion. Any good fighter, he'd straight knock them out. . . . That stuff is nothing but a fad. Because most of them guys, they couldn't make it in boxing, so they had to turn to something else.''

White, a former boxer, said there is no match for the athleticism required by today's mixed martial artists.

''Boxers couldn't become mixed martial artists,'' he said. ``That's why they're boxers. They are one-trick ponies. Our guys can do everything. They can box. They can kickbox. They can wrestle and do jiu-jitsu. They are much better athletes than boxers.''

Mayweather said a 10-0 fighter could defeat Liddell, and said he easily could do it himself. Liddell laughed at the comment.

''Didn't Floyd Mayweather say he wanted to fight me?'' Liddell said. ``I've got a 135-pounder at my house that will drop him on his head and will knock him out and finish him from the top. And he was the best 154-pounder in the world. It just doesn't make sense.''

This report was supplemented with information from The Associated Press and transcripts of news conferences.