Byline: Bill Brewer
Sep. 27--Knoxville's reputation is being a hot town for college sports, not college sports marketing.
That could be changing with the arrival of Action Sports Media Inc., which hopes to become a market leader now that one of the industry's top executives has purchased it from a Microsoft founder.
In the month since relocating to Alcoa from Portland, Ore., the company has completed a deal giving it the naming rights to the University of South Florida's Sun Dome arena. The agreement, being announced today, also calls for providing the Tampa school with the latest scoreboard equipment and signage, which Action Sports can market to advertisers.
Gordon Whitener, chairman and CEO of Action Sports Media, is adding USF to the mantel of major universities with which the company already is working. It has pacts with the Southeastern, Big Ten, Big 12 and Pac 10 conferences.
'We're going to be a full-service collegiate marketing company, including multimedia, venue signage, naming rights, pouring rights and consulting,' Whitener said.
He describes Action Sports' contract with University of Tennessee as one of the company's largest, involving video board signage at Neyland Stadium and Thompson-Boling Arena.
With annual revenue of about $15 million, Action Sports is competing with companies like Lexington, Ky.-based Host Communications for a share of the $27.5 billion collegiate sports marketing business that involves selling advertising in stadiums and arenas, selling rights to name sports venues and rights to sell items at venues.
Whitener was CEO of Host Communications until July 2004, when he left in a disagreement with Host directors over the company's direction. Shortly after leaving, Whitener's offer to acquire Host was rejected.
'While we were finding an equity partner to buy them, we found out that Action Sports was for sale. When I was unsuccessful trying to buy Host, I turned my attention to Action Sports pretty quickly,' Whitener said. 'We bought the company for two reasons. We liked the people and the company had good contracts with the right schools.'
Joining Whitener from Host is Jerry Felix, who will be chief financial officer. The company is currently located in offices in Alcoa, where about 10 employees work. Another eight employees are in Portland and 12 are in the field.
Whitener and private equity firm Parallel Investment Partners of Dallas bought Action Sports during the summer from Microsoft co-founder Paul Allen, whose varied business interests include sports organizations such as the Portland Trail Blazers, Seattle Seahawks and The Sporting News publication.
Action Sports began in the mid-1990s as StadiaNet, with a strategy of providing universities Jumbotrons -- huge scoreboards with video screens and space for advertising that sold for $3 million to $7 million apiece.
In exchange for providing the Jumbotrons, StadiaNet would get the rights to sell ads on them. Allen bought the company in 1999 from StadiaNet and changed the name.
Terms of Allen's sale to Whitener and Parallel weren't disclosed. The company was headquartered in Portland, but Whitener decided to move its corporate offices to Knoxville, where his sports career began. The Portland operation is now a regional office.
Originally from Dalton, Ga., he graduated from UT in 1985 with a degree in political science and a minor in business. He first went to UT on a baseball scholarship but left the team and began working with the football team under coach Johnny Majors. He left UT in 1985 to take a position on the football staff at Oklahoma State.
He also spent 12 years in sales and marketing with floor covering companies before getting back into the sports business, first with a company he formed to market rodeo events at NASCAR races and then at Host.
As Action Sports negotiates marketing deals with more schools, it also is looking to increase its size through acquisitions.
'Today, we're looking at two different acquisitions and we're barely out of the chute,' the former Vols assistant said.
He considers the partnership with Parallel Investment critical to the company's growth, saying Parallel's aggressive style jibes with his.
Parallel likewise said Action Sports fits its investment model.
'A hallmark of Parallel's investment strategy is to support outstanding business leaders in situations where aggressive growth strategies can create meaningful returns for our investors, and we see such an opportunity by bringing together Action Sports Media, Gordon Whitener and Jerry Felix,' Parallel Managing Director Clark Crosnoe said in a statement.
Crosnoe said the fierce loyalty college sports fans have to their teams creates strong business opportunities at sporting venues.
'Corporations are just beginning to understand the enormous potential of selling into this type of atmosphere. It's a trend that we believe will fuel the continued success of Action Sports Media,' Crosnoe added.
A nearby example of Action Sports' strategy is at the University of South Carolina, where the company negotiated the sale for rights to name the arena and sell beverages, or pouring rights, at sporting events.
Whitener explained that the naming, pouring, branding and advertising deals are typically commission arrangements for Action Sports.
Other areas of interest are collegiate women's athletics and high school sports. Professional sports aren't an interest and the company does not represent athletes.
'The major focus for our company is to be the best at collegiate marketing and media. That doesn't necessarily mean the biggest,' Whitener said. 'We'll move more into radio, coaches shows, game programs and sports publishing. We're staying with signage as well. We're going to do some things with high school sports, like producing some publishing, Web sites and radio programming.'
The Knoxville area is conducive to Action Sports' business because of UT and its geographic location. Using regional jets, the company can easily get to most business destinations.
'We could have put this business anywhere in the world we wanted to and we chose Knoxville,' Whitener said. 'It's a sports town.'
To see more of The Knoxville News-Sentinel or to subscribe to the newspaper, go to http://www.knoxnews.com.
Copyright (c) 2005, The Knoxville News-Sentinel, Tenn.
Distributed by Knight Ridder/Tribune Business News.
For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.
