When Casey Wasserman was a lad, Sundays meant tagging along with his granddad, MCA chief Lew Wasserman, to the famously downscale Beverly Hills deli Nate 'n Al. There, while young Casey enjoyed his matzoh brei and jam, Hollywood players on the make would stream by the table, pitching projects, asking favors, or just schmoozing with the man who all but invented the modern studio system.
"It was like a college education on how to do business and treat people," recalls movie producer Steve Tisch, who used to frequent Nate 'n Al with his father, Wasserman friend and former Loews Chairman Preston R. Tisch, now deceased.
Casey, by all accounts, learned those lessons well. Now 32, he is in the middle of building a sprawling sports marketing agency, Wasserman Media Group--a challenger to the behemoth of the business, IMG. After a four-year spree of acquisition by checkbook, WMG today represents 400-odd clients, including 6 of the top 30 picks in last year's NBA draft. Its corporate customers include T-Mobile (DT), Procter & Gamble (PG), and Nestl? (NSRGY).
And last summer, Wasserman was selected--over competitors like IMG and the William Morris Agency-- to sell naming rights to the planned New York Giants and Jets $1 billion-plus stadium in New Jersey. The Giants' chairman? Steve Tisch. But Tisch says it was his partners who "were totally taken with how smart Casey was." That coup came right after the hefty fee--an estimated $17 million over the life of the agreement--that WMG pulled down in the $178 million deal it struck with Emirates airline to put the carrier's name on English soccer team Arsenal's new stadium. All told, WMG's annual revenues approach $100 million, says Wasserman.
STARTUP ON STEROIDS
Not bad considering that eight years ago, Wasserman was a rookie sports owner who had plunked down $5 million for the Los Angeles Avengers of the then-shaky Arena Football League. Wasserman could have gone into show biz, of course, but chose to step away from the shadow of his famous granddad. "If you're Michael Jordan's kid, you had better be one heck of a basketball player," he says. Today, the Avengers franchise is worth $25 million, though like most sports teams it still makes no money. Wasserman calls the Avengers experience his "MBA in sports."
If the Avengers was Wasserman's MBA, WMG is his startup on steroids. By garnering fees of 5% or so for negotiating player contracts and up to 15% for naming rights, the agency is profitable, Wasserman says, though he declines to recite numbers. WMG, for example, will book an estimated $1 million a year for six years from the $100 million contract with the Houston Astros that slugger Carlos Lee signed in 2006.
But Wasserman's biggest potential payoff? He says it's taking his athletes digital with a dizzying assortment of online sports channels and video-on-demand offerings for cable. According to ESPN (DIS) Executive Vice-President John Skipper, the networkis negotiating for its online action-sports site, expn, to carry content from Wasserman's planned SportNet channel, which will feature sizzling young stars like 17-year-old skateboard champ Ryan Scheckler. And he's said to be talking to cable giant Comcast Corp. (CMCSA) about video-on-demand clips such as motocross races with dirt-bike star Nate Adams. He also intends to fill SportNet with coverage of popular amateur events including pre-Olympic swimming, track and field, and gymnastics.
In 2004, Wasserman bought an outfit called Studio411 for its ability to produce and distribute DVDs. It's to be the backbone of his digital-production efforts, enabling him to provide shows and other content that he can put online and offer to cable and iTunes. Last year it released 37 titles on surfing, snowboarding, motocross, and other action sports for companies with names like Moonshine Conspiracy, PoorSpeciman, and Poor Boyz.
Wasserman, however, isn't alone in his broadband dreams. To create SportNet, he'll have to beat out well-connected competitors including the U.S. Olympic Committee, which has offered money to secure online rights from some of the same governing bodies with which Wasserman is negotiating. And the progeny of larger media companies, including Fox Cable Networks' (NWS) Fuel channel, envision their own action-sports services. "All Casey is doing is adding to the confusion and maybe hurting things for everyone," says Wade Martin, president of the Dew Action Sports Tour, which stages a series of events sponsored by Mountain Dew.
More important, there's head-scratching among veteran sports marketers as Wasserman spends heartily to push into the business while major operations like SFX Sports Group and IMG are trimming back. When superstar agent Arn Tellem left SFX, a spin-off from Clear Channel Communications Inc., (CCU) in January, 2006, Wasserman ponied up $12 million for his practice, industry sources estimate. When SFX wanted out of Europe, Wasserman bought its soccer, rugby, and marketing divisions. When old-line Ohio ad agency Fahlgren Inc. put its auto-racing marketing unit, Champion Sports Group, up for sale, Wasserman grabbed it and was suddenly in NASCAR. "He's like the guy who walks up to this great buffet and picks up things here and there but hasn't decided if he likes Mexican food or steak," says Donald Dell, SFX senior vice-president and founder of ProServ. "I don't think he has really decided on a game plan." WMG Chief Operating Officer Josh Swartz says the distressed assets came cheaply.
Wasserman came by his interest in sports through his mother, who took him to Los Angeles Dodger games and let him skip school to intern in Hawaii for the NFL's annual Pro Bowl. A top-ranked California high-school tennis player, he suffered knee problems and turned to golf.
After graduating from the University of California at Los Angeles in 1996 with a decree in political science, Wasserman made a false start or two: He tried his hand in the bond market, then had a fling at launching a music label with the band Coldplay before turning his attention full-time to sports.
Today, Wasserman fields an all-star team that includes agent Tellem and naming rights guru Jeff Knapple, a former Denver Broncos quarterback with $2 billion in sponsorship deals under his belt. Last July, Wasserman signed up IMG's top marketing executive, Robert Prazmark, who generated more than $500 million in sponsorship deals over nine years. And in recent weeks he has hired several young agents, among them Jay Danzi, whom he snatched from IMG and who'll launch a golf representation division.
But that doesn't mean Wassserman is watching from the sidelines. He and Knapple worked together to land the Giants/Jets deal, says Tisch. Wasserman also played a key role in last year's agreement with ESPN to show Arena Football games and take a 5% stake in the league. "When the deal was signed, Casey wanted to talk marketing, like how much exposure were we going to give the league," says ESPN Executive Vice-President John Skipper. "Put a bag over his head, and he wouldn't sound like any 32-year-old I know."
Wasserman may be wise beyond his years, but he also has two other things going for him: money and solid-gold connections. What other junior mogul can get a former President to chat up a reporter about his potential? Bill Clinton, who became friends with Lew Wasserman when, as governor of Arkansas, he encouraged him to make more movies in the state, currently has Casey on his library board and says he may be a chip off the old block. "A lot of folks from comfortable beginnings do things their own way, good and bad," says Clinton. "You can tell that Casey was listening [to his granddad]."
By Ronald Grover