IMG’s Going to Extremes for New-Wave Sports Fans

The U.S. Open of Surfing being staged this week in the shadow of Huntington Beach’s postcard-perfect pier is as important to its new owners as the $100,000 in prize money being dangled in front of 500 contestants.

Sports marketing giant IMG, which recently purchased the Open for an undisclosed amount, hopes the annual contest will serve as a springboard for its belated push into the alternative-sports world dominated by Walt Disney Co.’s X Games.

Cleveland-based IMG also would like to see the Open’s supporting land-based games and entertainment evolve into a model that can be reproduced profitably at waterfronts around the world.

IMG has shaped the business by providing marketing know-how to such sports stars as Arnold Palmer, Tiger Woods and John Madden. It also helps to market the Kennedy Space Center, the Olympic Games and other premier institutions.

But page through the company’s corporate report and there’s little of the extreme-sports world to be seen.

“You like to be first, to be on the cutting edge, but [Disney-owned] ESPN really led with its X Games,” said IMG Senior Executive Vice President Bob Kain. “I think when we do the next report in two years, you’ll see a higher profile for action sports.”

Catching a wave this late in the game won’t be easy. The inaugural Extreme Games contest held in Rhode Island in 1995--the name changed to X Games the following year--drew about 200,000 spectators and such corporate sponsors as Advil, Mountain Dew and Nike Inc.

The 2001 games kick off Aug. 17 in Philadelphia, with 350 top action-sports athletes competing for $1 million in prize money. The X Games also will spin off 600 hours of programming across the ESPN2 and ESPN networks this year--along with a coveted four-hour weekend slot on Disney-owned ABC during the Philadelphia games.

“It’s interesting that in the soft advertising marketplace the ad guys are always talking about, this genre shows real resiliency,” said Ron Semiao, ESPN’s vice president of programming and managing director of the Global X Games. “We’ve sold out all of our sponsorships . . . six of them at the gold level and 10 at the associate level.”

IMG views the U.S. Open as a beachfront toehold in the hotly competitive action-sports arena that also includes the Gravity Games, a joint venture owned by NBC and magazine publisher EMAP USA. But surfing is a niche sport with only 2 million participants in this country--nearly half of whom surf California beaches. And the sport unceremoniously wiped out in 1995 when the X Games opted not to include surfing in its action-sports lineup.

So to build an attraction bracing enough to intrigue Southern California’s media-savvy teens and young adults, IMG is looking inland for inspiration--nearly 8 million teenagers nationwide ride skateboards and 2.5 million have snowboards, according to Board-Trac, a Trabuco Canyon-based market research firm.

Crews from IMG spent the last week erecting elaborate wooden facilities atop the sand for skateboarders, motocross riders and in-line skaters. The top prize money in those categories approaches what’s being offered to surfers. Bands Ozomotli and Common Sense will play on the nearby music stage, and corporate sponsor Philips Electronics has stuffed white-topped display tents on Huntington Beach with big-screen televisions, DVD players and MP3 devices.

The expanded focus on landlocked sports offends some of surfing’s purists. But the big-tent approach suits Ian Cairns, a vice president at Bluetorch, the Irvine-based media company that sold the U.S. Open rights to IMG.

“This year’s Open is what I think surfing ought to be doing to promote growth,” said Cairns, who’s produced surf contests for more than two decades. “Surfing is the grandfather of the other board sports.”

IMG will help bridge the gap between corporate marketers and surfers, according to Kain. “We adapt to the event,” he said. “We’re responsible [to corporate customers], but we don’t mess with the sport’s culture.”

How big a splash IMG makes in the extreme sports arena will depend in large part upon Pacific Palisades resident James Leitz. A vice president of IMG’s X-Sports division since 1999, Leitz earlier produced action-sports events on Southern California beaches.

He describes the U.S. Open as “a good buy for IMG because it can be a prototype for IMG globally. Clients say, ‘We know you have golf and tennis, but what do you have for the 12- to 34-year-olds in action sports?’ ”

One of IMG’s clients that needs to polish its image among younger consumers is Amsterdam-based Philips Electronics, which now is spending $100 million a year on advertising and marketing.

“We want to make our youth sponsorships as relevant as possible,” said Robert-Jan van Dormael, a project manager for Philips’ global brand management. “And that means extreme sports, music and technology.”

Philips is the lead sponsor of the Philips Fusion festival being held in conjunction with the U.S. Open. The sports-oriented “lifestyle village”--minus the surfing contest--will be repeated in September on Chelsea Piers in New York City.

Van Dormael is betting that the template IMG created for Huntington Beach will work at beachfronts around the world. “We’re looking at a global strategy,” van Dormael said. “And extreme sports is part of that focus, whether it’s Huntington Beach, Manila, Shanghai or Singapore.”

Disney won’t willingly cede its leadership position in the action-sports world. “Other people clearly are seeing that this is legitimate,” ESPN’s Semiao said. “But we feel that first-mover philosophy really has helped to strengthen our brand.”

ESPN’s early lead gave it the ability to court influential athletes, including professional skateboarder Tony Hawk, and such important advertisers as Pepsi-Cola Co.’s youth-oriented brand Mountain Dew. “If we’re talking to certain advertisers, the Gravity Games or [IMG] now are going to be asking them to spend on their properties too,” Semiao said. “You’ve got to scramble harder for advertising revenue because budgets are finite.”

ESPN is ramping up too. The network plans a regularly scheduled 6 a.m. hard-core sports program to catch young fans before they head to school. It’s partnering with a Woodward, Pa.-based extreme sports training camp to develop a string of “X Games Camps” for up-and-coming athletes.

Observers say IMG has many of the building blocks in place to seriously compete in the action-sports marketing arena. For example, the company already operates highly regarded golf, basketball, tennis and hockey academies at a 190-acre campus in Bradenton, Fla.

IMG’s television arm isn’t well known outside of the business, but it produces and distributes 6,000 hours of programming annually. It has produced such made-for-television events as Monday night’s “Battle at Bighorn,” starring two top LPGA golfers, Tiger Woods and 2001 British Open winner--and fellow IMG client--David Duval.

That experience will help if IMG is to catch up with Disney and the NBC/EMAP USA partnership.