Knight Ridder/Tribune Business News
Jun. 21 -- The Marketing Arm, a 6-year-old Dallas sports-marketing company, is close to finalizing a deal to become part of Omnicom Group Inc., the giant New York-based advertising and public relations company.
'They're going to buy 100 percent of our company and build their presence in sports through our company,' said Ray Clark, The Marketing Arm's chief executive.
Mr. Clark declined to discuss the financial aspects of the deal, but an industry source estimated that Omnicom will pay $12 million.
Mr. Clark started The Marketing Arm in 1993 after working four years with ProServ, a major sports-marketing agency based in Washington, D.C.
The Marketing Arm, which has posted annual revenue growth of 50 percent for the past three years, works both ends of the sports marketing business companies and athletes. Once it becomes part of Omnicom, it will continue to help the companies use sports to sell their products and help athletes land lucrative endorsement contracts.
Clients include Plano-based Frito-Lay Inc., Nokia Corp., Ameritech Corp. and Fortune magazine. The company works with about 100 athletes, including the Houston Rockets' Scottie Pippen, the New York Knicks' Allan Houston, the Portland Trailblazers' Damon Stoudamire and the New York Giants' Jason Sehorn.
Mr. Clark will remain at the helm of The Marketing Arm, and the company will stay in Dallas, where several other Omnicom subsidiaries are located.
Once the transaction is finalized, The Marketing Arm will handle Omnicom's endorsement deals for companies and athletes -- projected to reach 1,000 transactions by 2001.
Omnicom had revenue of more than $4 billion last year, led by units such as its BBDO Worldwide and DDB Needham advertising agencies.
In buying The Marketing Arm, Omnicom is acquiring expertise in sports marketing, which will help it compete with IMG, SFX Entertainment Inc., Advantage International and other big names in the industry. To serve clients, The Marketing Arm will work with other Omnicom entities around the world, including Dieste & Partners and Case Dunlap Enterprises Inc., both in Dallas.
Mr. Clark said the Omnicom deal will accelerate the growth of The Marketing Arm, increasing revenue tenfold in the next four years. What's more, the company will have the capital to expand by buying other sports-marketing companies.
'We plan on acquiring eight to 12 companies in the next two years,' he said.
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