Offbeat Thrills Now, Big Money Later?
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Brutal, bloody fights in cages. Skateboarding on water. Tennis on sand. Bikes on dirt. Fantasy battles in virtual worlds. Modern-day ninjas. Unlike mainstream sports, with their gargantuan TV contracts, household-name athletes and commentators, and zillion-dollar endorsements, the six sports featured here are gritty niche operations scuffling for national attention.
But remember: NASCAR started as a bunch of good ol' boys running souped-up jalopies south of the Mason-Dixon, and not so very long ago, tennis' Grand Slam tournaments were played by amateurs. Audiences for novel athletic endeavors in the U.S. are expanding fast, boosted by the mainstreaming of "action sports" such as snowboarding and skateboarding. Of these six, Ultimate Fighting has arguably broken through to mainstream status already, while wakeskating is just beginning to dip its toes into professional waters. Experienced investors are moving in, global companies such as Toyota (TM ), Dell (DELL ), and Hewlett-Packard (HPQ ) are signing up to sponsor, and many of the athletes themselves are starting to earn a good deal more than pocket money.
"At one time you would watch these sports for the 'wow' factor. Now people are consuming them more and more as competitive sports," says Wade Martin, general manager of an action sports competition sponsored by Mountain Dew. "They're appealing from an athletic standpoint, and they have an individualistic nature, which rings true to the younger generation."
That's the Holy Grail: the elusive eyes of 18- to 34-year-old males, targeted for their buying power and attention to marketing. They're tuning in to these new sports. Potential investors, take note.
About five years ago, Scott Byerly decided he didn't need bindings on his wakeboard anymore, and wakeskating was born. (For the uninitiated, a wakeboarder is towed like a water skier but uses a rectangular board.) The Byerly Toe Jam tour, organized by Byerly and fellow wakeskater Sean Dishman, launched in April and pays for itself, with sponsors picking up the $100,000 tab for each event and a television contract with cable channel FUEL TV, part of the Fox Cable Networks (NWS ). Aaron Reed, the current world champion, is known for his "wake-to-wake" move in which he jumps not one but two wakes.
Sasuke, a made-for-TV sport filmed in Tokyo, thrives on the agony of defeat. The fact that most rivals don't make it through all four obstacle courses is one reason why Neal Tiles, president of Comcast Corp.'s (CMCSA ) young-male-oriented cable channel, G4, chose it for his programming lineup in 2006. His long shot is paying off in the ratings. Since it first aired on American TV last October, the sport, now dubbed Ninja Warrior, has outperformed every show but Cops on the network in every demographic. Five million viewers tuned in to a 48-hour marathon—the highest-rated week ever for the channel.
Ultimate Fighting Championship was born of the age-old martial arts debate: Which is the greatest form of bodily combat? Wrestlers, boxers, and Ju-Jitsu artists squared off against one another in search of the answer. Mixed martial arts enthusiast Dana White, who used to run a sports management company, bought the company in 2001 with two old sparring buddies for $2 million. The UFC racked up $223 million in pay-per-view sales in 2006 and is selling out boxing and college basketball arenas at $750 for ringside and $50 for stadium seats (Dustin Hazelett defeating Diego Saraiva). White just bought out Asian competitor Pride for $70 million and is planning a European tour next year. On June 23, the finale of the company's reality-TV show, The Ultimate Fighter 5, reached 2.6 million viewers on Viacom Inc.'s (VIA ) Spike TV.
When David Hill, CEO of Fox Sports and former president of Direct TV Entertainment (DTV ), was looking for the next big sports property, he landed on an unlikely candidate: video games. Direct TV has committed tens of millions in a multiyear contract to air a twice-weekly, two-hour show that began on July 9. Eighteen 10-member teams will compete. Some of their general managers are building training centers while others are hiring top global players to spar (a Los Angeles tourney). Team members get a starting salary of $30,000, and top gamers could earn up to $100,000 per season. One sponsor: Dell.
A New York real estate developer by day, Mark Altheim has spent two years promoting beach tennis, a hybrid sport that mixes tennis with beach volleyball, and marketing a new company, Beach Tennis USA. Altheim has sunk $2 million into his project and is finally seeing some real return. This year, Beach Tennis USA signed TV contracts with SportsNet New York (CMCSA ), Comcast SportsNet, and the Tennis Channel, and teams are picking up sponsors. Phil Whitesell and Chris Henderson received $10,000 from national sponsor Liquid Ice energy drink to cover their expenses to play the nationals in Long Beach, N.Y., on Sept. 1 and 2.
Get ready to eat dust: A bicycle motocross track may be coming to your town. With newfound leverage from the sport's recent inclusion in the Beijing 2008 Olympic Games, the American Bicycle Assn. (ABA) is planning to invest "in the mid- to high six figures," says a spokesperson, in building BMX-specific tracks to revive the sport (an event in Australia). BMX has become so appealing that cities are investing in arenas to attract tourism dollars, and Hewlett-Packard is a sponsor. Albuquerque just completed a $5 million arena in April, and the ABA is in talks with Walt Disney Co. (DIS ) to build an even larger complex for Disney's Wide World of Sports.
By Paula Lehman