Nike, Creative Artists Firm to Produce Sporting Events

Nike Inc., the world’s biggest athletic shoe manufacturer, and Creative Artists Agency, Hollywood’s most aggressive talent firm, announced Tuesday that they have teamed up in an unusual multimillion-dollar bid to create a global sports entertainment business.

Plans call for the companies to produce a series of sporting events starring top athletes in live or made-for-TV specials. The programs will air around the world, taking advantage of emerging technologies such as satellite broadcasting and channel expansion.

The venture brings together two of the country’s most growth-minded companies. Nike, with more than $3.4 billion in revenue last year, has already revolutionized the sportswear business. It is now aggressively moving into licensing of products and managing of athletes.

CAA, which represents celebrities as diverse as Kevin Costner, Michael Jackson and Magic Johnson, has branched into everything from advertising to consulting on new technologies. The agency stunned Madison Avenue last year when it gained Coca-Cola as a client. Next month, CAA will unveil a multimedia marketing campaign that includes more than 25 television commercials.

The companies also share another trait. They are run by two of the business world’s most innovative but secretive executives. Nike founder and Chairman Philip H. Knight and CAA Chairman Michael S. Ovitz function almost exclusively behind the scenes, and both have well-documented propensities for cultivating relationships with powerful figures outside their fields.

“Our goal is to create sporting events and programs that excite a global audience,” Knight said in a statement.

“More than ever we see enormous opportunities in the software area, combining sports and events as entertainment, as well as for sport itself,” Ovitz told The Times on Tuesday. “Given the market potential presently being defined by technology crossed with the media, there is no question that there will be an enormous demand for product.”

The two companies declined to provide specific details of the agreement, except to say that they plan to announce their first event this spring. But sources close to the talks said that Nike and CAA foresee vast opportunities in the expanding world of television, in which cable companies, broadcast networks and telecommunications firms are all participants.

Some critics pointed out that the sports programming business can be treacherous, recalling NBC’s ill-fated Olympic TripleCast venture, which reportedly lost more than $100 million. Nike and CAA could also face resistance from major sports leagues and from companies that already broadcast special sports events. Rick Ray, chief executive of Raycom, which televises about 500 sporting events a year, said programming costs are high and audiences are demanding. At the same time, he said CAA and Nike are well-positioned to capitalize on the growing union of sports and entertainment.

The two companies predicted that they will overcome whatever obstacles appear.

“If people are going to have multiple channels, there’s going to be a greater need for programming,” said one source close to the talks. “And what is the quickest thing you can put on those channels besides C-SPAN? One answer is narrowcast sporting events.”

The events will surely showcase two basketball stars with ties to the companies--CAA client Johnson and ubiquitous Nike ad man Michael Jordan. Basketball is growing in popularity around the world, thanks partly to the U.S. Olympic Dream Team.

But plans also call for creating programming around other competitions. Nike would use its global sports connections and CAA would employ its entertainment ties to secure programming rights. Nike, for instance, has deals with sporting figures around the world, and CAA has similar entertainment connections.

Several sports marketing executives praised the deal.

“Nike is absolutely drunk with success,” said David Burns, president of Chicago-based Burns Sports Celebrity Service. “I think this will help them dominate for years to come.”

For cash-rich Nike, the deal represents a chance for it to learn firsthand about the sports management and sports entertainment business--key areas the Beaverton, Ore.-based firm has targeted for growth in the 1990s. Nike wants to learn how to make money not just from manufacturing athletic shoes and apparel--but from conceiving and controlling its own live and televised sporting events.

Nike also wants more direct control over athletes it adds to its illustrious stable of sports stars. Oddly, the joint project poses little likelihood of intermingling the sexy list of Hollywood celebrities linked to CAA--such as Madonna and Costner--and sports stars linked to the Nike brand--such as Jordan and Bo Jackson.

But Nike would also suddenly find itself competing with the giants of sports sponsorships and programming, such as Cleveland-based IMG, which represents athletes including Arnold Palmer and Andre Agassi, and which sponsors international tennis, golf and ice-skating events. “This will certainly get IMG’s attention,” said John Horan, publisher of Glen Mills, Pa.-based Sporting Goods Intelligence.

Beverly Hills-based CAA gains another high-profile partner in Nike, after already forging relationships with Coke and Japan’s Matsushita Electric Industrial Co. It also hopes to use the new events to provide work for its vast array of behind-the-scenes talent.

Sources said Ovitz approached Knight with the idea more than six months ago after hearing about the phenomenal outpouring of fans for Johnson during promotional appearances in Spain. The companies then assigned a team of six representatives each to put the plan in motion.