Just read this, couldn't find the thread we had going on it but looks like there has been movement at the station.


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

Details emerge on ASP takeover deal

A source close to the ASP has opened up to SURFER with details surrounding ZoSea media's purchase and subsequent privatization of the ASP. Last week, the ASP sent out a very general and vague press release touting the deal with ZoSea media, leaving much to speculation as to what effect this buyout would have on the future of professional competitive surfing. But according to our source, ZoSea's takeover of the ASP is "the biggest thing to happen to professional surfing since the ASP's inception."

The facts behind the takeover paint a picture of a deal built not on a concrete business plan, but rather on a promise of what ZoSea could accomplish, most notably absorbing the exorbitant financial costs of running a World Tour event. "This was very much of a leap of faith on the part of the ASP board," says our source. "It was by no means a unanimous decision by the board with more than a few voting members questioning whether or not this acquisition was best for professional surfing. That being said, at the end of the day, given the current economic climate facing many of the top brands, this is what had to happen to move professional surfing forward."

The acquisition, which was signed as a term-sheet deal, will be formally finalized after a series of meetings between ZoSea and the current ASP Board that will take place between now and December 17. SURFER can confirm that the following changes will be made once ZoSea takes control over the ASP in 2014.

When the Deal is Finalized, ZoSea will Effectively Take Control of the World Tour Events

Currently, a number of brands own the licenses to the 10 active World Tour events. When the deal is formally signed, ZoSea will take over sole ownership of the licenses to every World Tour event in 2014. The brands that currently own the event licenses will have a right of first refusal to purchase primary sponsorship details. As an example, come 2014, Quiksilver will be given the opportunity before any other brand to sponsor the event at Snapper. The cost to purchase a primary sponsorship will be structured as follows: in 2014, it will cost $250,000 to sponsor a World Tour event; in 2015 it will cost $500,000; in 2016 the cost will settle in at $1 million. Although it differs per event, it's currently estimated to cost an average of $3 million to run a World Tour event. Additionally, ZoSea will sell commercial spots during the webcast to both endemic and non-endemic companies.

ZoSea Will Take Over the Majority Interest of the ASP Board

The current ASP board is composed of an equal representation of World Tour surfers and board members. Under the new plan, ZoSea representatives will hold the majority of interest but will retain some surfer representatives for council. "Some of the boardmembers were wary that a board not made up of the brands and surfers could take surfing down the wrong path," said our source. "But according to ZoSea, although they will take ownership over the ASP, they're still keen to hear from the surfers. They won't necessarily be asking the surfer representatives what to do, but rather how to do it."

The Term Sheet Deal Was Agreed Upon without a Concrete Business Plan

"There was a five-year generalized plan of intent that ZoSea presented to the ASP, but there was no solidified business plan," says our source. "For a lot of the people in that meeting, this was a little worrisome. But given the alternatives of continuing to run the event themselves, the brands decided to move forward. It was very much a 'trust us, we know what we're doing' deal." By December 17, when the deal is set to be officially signed, our source expects ZoSea to have a more concrete plan in order.

ZoSea Will Create A Single Production Team for the World Tour Events

Beginning in 2014, a single production team and announcers will be put into place. It's not currently known who will make up that team.

Two Other Organizations Were Also in the Bidding

According to our source, two other outside agencies were also eyeing to take control of the ASP. Because of a non-disclosure agreement, those two agencies could not be named. Some ASP board members openly questioned whether it was best to sign with ZoSea, or go back and vet the other outside agencies again for a chance at a better deal.

By 2014, A Commissioner of the ASP Position Will Be Created

The position is expected to mimic that of the NFL and will most likely be filled by an ex-professional surfer in good standing with both the surfers and the industry. It is not currently known who that person will be.

Pension Plan for Male and Female World Tour Surfers

The current ASP board is composed of two surfers rep. As a means to help gain their vote, ZoSea will offer a million-dollar pension plan for World Tour surfers. "The details on the pension plan are very hazy at the moment. But I can confirm that a million-dollar plan has been put forth. How it's going to work is still up in the air, but I can assume that there will be a lot of meetings between the surfers' rep and ZoSea moving forward to fill in the details."

The World Tour will Retain the Same Basic Competitive Structure as Before but Will Possibly Include Specialty Events

ZoSea will only be taking control over the men's and women's World Tour events, the 'QS and the PRIME events will continue to be handled by the ASP. "The WQS will still be the feeder system to the World Tour. That system seems to be working and ZoSea isn't interested in changing it."

There's A Proposed Broadcast Deal with a Major Television Network

Although there is not yet a confirmed television broadcast deal in place, our source has said that ZoSea is in the works of attempting to finalize a deal that will potentially see World Tour surfing broadcast on network TV.

There Will Be An Increase In Prize Money for Both the Men and Women's World Tour

The current prize purses for both men's and women's World Tour events stand at $425,000 and $110,000 respectively. Under ZoSea's plan, the prize purse for the men's event will increase to $500,000 and the women's to $250,000.

Nice find SP - I have been watching this story unfold and wondering when we would get some more detail. On the surface I think that a centralised media plan and selling off the rights is a great idea. Thats pretty much how professional sport is run around the globe these days. However you normally do not have to give as much away as it would seem the ASP is doing.

I am glad that we will see a standardised approach to the running of events - and that the big 3 have agreed to this. Clearly they are suffering cashflow problems or have finally realised that this is the way forward. At long last in my opinion - as I think the fragmented approach has been holding things back - its pointless having 3 or 4 different companies having their own setups.....why not just have one and do it properly.

As for the pension plan.....great idea....but lets see some detail....surely $1m sounds great as a news headline but how does it breakdown - should someone who has surfed 20 events get the same as someone who has surfed 90? Should someone who has won 1 event get the same as someone who has won 20? I should hope that its performance based....perhaps it will run as a % of price money similar to our Paye setup here in Aust.

I am concerned that the new media company will have too much power. Business plan? They are obviously doing this because they want to make some cashola - they are not doing it for love. The afl and nrl (as of late) have a commission structure, so do the American sports and the FA remains the boss of the premier league. I recall the problems that rugby had early on when it was looking to go professional. I just believe that there is nothing more important or bigger than the sport itself. Sure it needs to come into the 21st century - but you should not have to give it all away to do so.

CMC said...
Zosea, owned by Kelly Slaters manager and undoubtedly also Kelly. So now Kelly owns pro surfing!

He owned the title for the last 15 years, may as well give him the tour as a retirement gift, Maybe even the commissioners job?

And great reply Ted.... Some good points there, the deal seems to raise more questions then it answers at the moment.

62mac said...
I also heard they are lifting board size for the tour.

From 2013 all pros will have a choice ride a 9.1 or retire.

Or use a paddle.

Scotty88 said...

62mac said...
I also heard they are lifting board size for the tour.

From 2013 all pros will have a choice ride a 9.1 or retire.

Or use a paddle.

Geez that would be bad news for those hotshot young Longboarders that didn't quite make it in shortboarding so went to Longboarding for a career eh.

62mac said...
No I see it this way,there is hope for us once moreShame Lacey lift his run too late

That's a funny concept isn't it. I discussed this once with my mentor that people really start enjoying surfing once they realize that they won't win a world, national, state, regional or probably even a club round. Until that stage they chase something at the expense of their own joy on so many occasions.

will be intresting to see how it ends up.....how filthy lucre is being splashed would be even more intresting