Small-Time Operation Hits Big Time : Sports marketing: In seven years, Craig Elledge takes company from a garage to national television.

Seven years ago, Craig Elledge borrowed a couple of thousand dollars from his mother-in-law to start a sports marketing business in the garage of his Van Nuys home.

He built shelves to store files and used his wife’s drafting table as a desk. It was the epitome of a small-time operation.

Elledge was in debt and had just quit his job to fulfill his dream of owning a sports marketing business.

“It was scary and we went through a lot of tough times,” said Elledge’s wife, Liz. “We had just bought a house and had our first baby. At one point we drained our entire savings and went to my parents because we couldn’t make our house payment.”

The first year CE Sports was in operation, it was associated with three small sporting events--a college volleyball series, women’s pro beach volleyball and jet-ski racing. The company grossed $225,000, but had many debts.

Now, those hard times seem long gone.

CE Sports will produce more than 50 sporting events and 100 shows this year for ESPN and ESPN2, and the company, which has 25 employees, will gross more than $6 million.

“I’m not surprised because he’s a shrewd businessman,” said C.C. Sandorfi, who worked for CE Sports for three years before becoming assistant editor of Volleyball magazine. “Craig knows how to make money and he’s very sharp.”

Elledge, his wife and three children now live in Sherman Oaks. He says those first two years in the Van Nuys garage indicated the company would grow quickly.

“By 1990 we had to move to an office because I had trucks parked in my driveway and four people working out of my garage,” Elledge said. “One of my neighbors thought I was smuggling drugs. It just got to be too much.”

Elledge moved to a 1,700-square-foot office in Van Nuys and later relocated to the 4,000-square-foot Van Nuys office that has served as CE Sports’ headquarters the last two years.

The location includes an adjacent warehouse that houses banners, tractors and other equipment used for different venues, most of them on the beach.

Among CE Sports’ biggest events is an international jet-skiing championship, a pro beach volleyball tour and a snowboarding tour.

Since the company began producing the International Jet Sports Boating Assn. jet-ski world championships seven years ago the event has grown tremendously.

It began in 1988 at Lake Havasu City, Ariz., with competitors from five countries and a couple of hundred spectators. The prize money was $5,000. Now, more than 700 racers from 22 countries compete for $75,000 in prize money and more than 50,000 spectators attend annually.

The jet-skiing event is one of Elledge’s gems, but it’s not his favorite. His baby is the pro beach volleyball tour he created five years ago with the help of a college fraternity brother who played the game.

For many years Elledge was involved with promoting and marketing two-man and two-woman pro beach volleyball, so in 1991 he created a beach tour with four-man teams.

“Obviously I had no capital to do this,” Elledge said. “So I got Anheuser-Busch to sponsor the tour.”

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The first year there were five four-man tournaments and seven events with a total of $140,000 in prize money.

In 1993, a women’s tour was launched. This season five men’s and four women’s teams will play in 24 combined tournaments for more than $1 million.

In addition to having Budweiser as a title sponsor, each team is sponsored by individual companies for $75,000 to $100,000 a season. Players sport the company’s logo and, unlike the two-person tours, their road expenses are paid for and there is guaranteed money even for last-place finishes.

“It’s a great way to continue to be active in the off-season and stay physically fit,” said Craig Buck, a middle blocker from Tarzana who is a two-time Olympic gold medalist. “Craig has done a great job to give us the opportunity to play on the beach.”

Many of the tour’s players are U.S. National team members or, like Buck, former Olympians who specialized in the indoor game.

The 36-year-old Buck, who plays in a professional indoor league in Japan in the winter, is 6 feet 9 and believes he would not have succeeded on the two-man beach volleyball tour. In his prime he was considered the world’s best blocker, but specialized players rarely do well on the beach, where athletes must be good at every position.

“That’s why I got involved with four-man from the beginning,” Buck said. “I thought Craig’s idea was great from the start.”

Elledge, 35, became interested in volleyball at USC, where he earned a degree in journalism. Many of his fraternity brothers were on the Trojan volleyball team and Elledge played the game for fun.

His first job out of college was with a public relations firm that had him promote gymnastics and swimming. But it wasn’t long before he began working for another firm that handled the events for the Assn. of Volleyball Professionals, the men’s two-man pro beach tour.

Elledge worked with the Women’s Professional Volleyball Assn. while employed elsewhere.

“He’s done a lot for volleyball,” said Elaine Roque, a WPVA veteran who played at UCLA and in a pro indoor league in Italy. “Craig has been good for the sport. It’s very innovative what he’s done with that four-man tour. It’s a quality product.”

Watching it flourish has been a dream come true for Elledge, who can sit back and enjoy the success. He no longer puts in the long hours that the business required in the early years, but does a lot of work at home. “I never work out of the garage though,” Elledge said, laughing. “That’s where we keep our cars now.”