This article appeared in our July 2013 Issue.
It's day one of what's promising to be a strange old year. The pro surfing tour has just changed hands for the first time in three decades, been signed away for a song, and while the outgoing owners haven't yet cleaned out their desks, the new owners haven't moved in either. The whole show's in limbo, and at this historic juncture everything and nothing is happening simultaneously. It's been termed a "bridging year," but a bridge to where exactly, no one is sure.
The press conference for the first event of the season—the Quiksilver Pro—is being held on the beachfront at Snapper Rocks. The humidity is so sharp it's like breathing fish hooks. A stifling room full of leaky newspaper hacks and TV network girls melting like wax dummies stare at an empty chair with the nameplate "Kelly Slater" in front of it. His no-show is for "personal reasons," although there's a murmur it might have something to do with his involvement in this "new tour." The other piece of scuttlebutt is that he's gone AWOL to avoid questions about the layoffs that Quiksilver—his seven-figure, two-decade sponsor—announced back in California the previous day. In reality, with the sun out for the first time in weeks, he's most likely smacking a white ball around a golf course somewhere. But the buzz in the room is all around the future of the World Tour, and the first question is fired at the gloriously insouciant Dane Reynolds, the World Tour's most disinterested surfer, and as a consequence, the surfer the world is most interested in. He's asked whether he's been approached to be part of the new 2014 World Tour, now owned by ZoSea Media Holdings, Inc. Dane edges awkwardly toward the microphone. The pregnant silence is broken when he stammers: "Err… ZoSea? What's that?"
Randy Rarick has seen it all before. The long-time contest promoter and ASP board member was there when the very first pro surfing body, the IPS, formed in 1976. It was done around his kitchen table at Sunset Beach. He was also there for pro surfing's first coup seven years later, albeit on the receiving end as the newly formed ASP marched in and took pro surfing. "Ian Cairns walked in with a $25,000 check from OP and he waves the check in front of everybody and said, 'You want to stay with the IPS or you wanna come with me?'" Rarick laughs [now, anyway]. "So for 25 grand everybody jumped ship. But that was fine. It was time for a change, Fred [Hemmings] and myself were burned out and Ian came through the door with new energy…and 25 grand."
Rarick wasn't surprised then, when at the ASP board meeting in Coolangatta in February 2012, a phone book-sized business plan outlining a proposed private takeover of the ASP hit the table with a thud. A hitherto unknown group by the name of ZoSea Media was making the pitch, although ZoSea's two front men—Paul Speaker and Terry Hardy—needed little introduction. Speaker was on the board of Quiksilver, while Hardy was Kelly Slater's longtime manager and the driving force behind the failed 2009 "Rebel Tour." The genesis of the ZoSea takeover can be traced back to September 2011, in that surfing hotbed of New York City. At the time, the writing was already on the wall for the ASP. The event horizon three years earlier on Wall Street had been crossed and the surf industry—and tethered to it, pro surfing—was being drawn into a black hole. The surf brands were abandoning the exotic, money-burning exercise of taking events to good waves and retreating to the great citadels of capitalism. Quiksilver had set out to embrace the big-city surf contest, bringing in music and skate and moto and art, leveraging non-endemic sponsors, constructing a pop-up retail borough, treating the surfers like foreign dignitaries and splashing a cold million in prize money. The irony of the event is that a hurricane wiped out the sideshow and left Dream Tour conditions for the contest, but the consensus was that despite the fact it was the first and last New York event, the whole thing had worked and the guy charged with making it work had been Paul Speaker. New York was his light bulb moment. "There are amazing stories on Tour," he offers, "both through the history of the events and within the lives of the surfers. This became apparent to me early on as a fan and follower of the sport and that interest was nurtured during my time on the Quiksilver Board where we were able to bring the world's best surfers to New York for the first time." The surf brands had raised pro surfing as their own, invested hundreds of millions of dollars in it, watched it blossom, and for many of them it had almost become a raison d'etre, if not the fundamental driver of their marketing and team rosters. The surf brands needed pro surfing, even if collectively they weren't entirely sure how they were going to pay for it.
But the ZoSea pitch wasn't just for the media rights, as this ASP board had seen several times in the recent past. It wasn't a rebel tour. It was a play for the whole sandpit: the ownership and management of the ASP and its media rights. And the buyout figure attached to the plan wasn't 25 grand this time—it was nothing. Donuts. Zero. The deal, however, would drop the cost of each event for the licensee from $3 million currently back to $1 million, and ZoSea banked on the brands wanting out more than they wanted in.
"Their timing was pretty impeccable," Rarick agrees. "They came in when everybody needed them to come along." Surf industry spot fires dotted a landscape that had been milk and honey not five years earlier, share prices were falling through floors, and for the most part it was clear that as a group, the brands—the traditional owners of pro surfing, along with the surfers—could no longer indulge bankrolling it (to the tune of 30-odd million dollars annually). But at the same time this was their baby. There was a personal attachment to pro surfing that went far beyond the balance sheet. For proof, just sit next to Rip Curl founder Doug "Claw" Warbrick while he watches Mick Fanning's heat in his sandals and socks, ghost scoring and levitating with glee after every wave. The surf brands had raised pro surfing as their own, invested hundreds of millions of dollars in it, watched it blossom, and for many of them it had almost become a raison d'etre, if not the fundamental driver of their marketing and team rosters. The surf brands needed pro surfing, even if collectively they weren't entirely sure how they were going to pay for it.
"You've got to realize the scenario that was unfolding," states Rarick. "The ASP, we sat there and said, 'If we don't take the deal we can keep the status quo and tread water for a year, then maybe somebody will go out there and find a big sponsor,' and we all looked around the room and said, 'We been saying that shit for 15 years and nobody has come! Is it really going to happen now? No. You know what, we don't have a better offer, let's roll with it.'" The decision, however, was not unanimous. "Quik and Billabong saw them as a savior and said, 'Thank God, we can get out of this deal,' but Rip Curl and Vans were dead against it." The final vote on the deal was set to go down at the ASP board meeting in France in early October.
Meanwhile, the other traditional owners of the ASP—the surfers—were in furious agreement. Gaining consensus among any group of surfers, anywhere at anytime, can be an exercise in herding cats, but ZoSea had taken cues from New York and pitched the surfers first and foremost in their plans. Not only would prize money increase, but surfers would also get a pension plan. They would be the stars of the show. "I think most guys were initially skeptical," recalls then-Surfers' Rep, Kieren Perrow. "Your whole livelihood depends on getting this decision right, and the livelihoods of guys and girls 10 years down the track too." The surfers saw a risk in voting for the deal, "but we saw the risk of doing nothing as even greater," he says. "Things were dire, and I wouldn't even want to contemplate the very worst case, which is that it might have fallen over totally."2013 has been termed a “bridging year” for the ASP, but a bridge to where exactly, no one is sure.
The art deco Mercedes Hotel, overlooking Le Canal de Hossegor, hosted the meeting where the surfers' vote was taken. Perrow recalls: "Everyone showed except one guy—33 of the 34 surfers." Kelly Slater was there and took his place among the rank and file of the surfers' union. Even though it was Kelly's manager making the play for the ASP and everyone suspected Kelly was more involved than he was letting on, he stayed at arm's length during the negotiations, and continues to do so today, describing his silence as "pleading the Fifth."
"He's tried to stay out of it," says Perrow. "He's passionate about it and can see why it works and talked through the whole proposal, but he's smart enough to know he doesn't want it to seem like he's pushing a personal agenda."
The October 2012 ASP board meeting was held in the boardroom of the stately Quiksilver Boardriders House in the old quarter of Hossegor, an oversized image of Kelly looking on down from the wall like a portrait from a Poe story (read whatever symbolism into it you like, but the eyes followed everyone in the room). The vote was a fait accompli. Most of the debate had already taken place during heated one-on-ones in the months prior. The ZoSea proposal was voted on and passed as a matter of business, the final vote 8 to 2. The term sheet was signed and that was it; after 30 years pro surfing had a new owner.
"There'd been so much buildup to it and so much tension and there were so many last-minute meetings that when the vote actually happened it was almost an anti-climax," says Perrow of the meeting. For those on the board, some with lifetimes devoted to pro surfing, it was a melancholic moment. "I'd been on the board for 30 years," says Rarick, "and I thought, wow, I'd been to the first board meeting and here I was at the last. We looked around the room and went, shit, it's over. There was a bittersweet nostalgia to it you could say, but we toasted to a new future, a new chapter, a new page. The old ASP is gone and it's time to move on."
The deal was announced publicly on October 5 through a short press statement that said nothing meaningful and left plenty open for interpretation. If this was indeed the exciting future of surfing, why wasn't it being screamed from the rooftops? "These guys needed to get the word out," states Rarick. "They were being so quiet about it, and all it's doing is firing speculation and a bunch of bullshit. I told Paul Speaker, I said, 'Paul, all you've got to say is that there will be no major announcements for six months, and that itself would have been an announcement."
Speaker, however, hit the ground running. "One side of me was exhausted and one side of me was absolutely delighted that we were able to get this closed," he recalls. "Within 24 hours the excitement turned into a to-do list and we were off to the races. It was a short-lived celebration, then it was a series of meetings about how we were best going to set up 2014." He began a whistle-stop tour of the events, negotiating licenses, taking an inventory on what exactly it was they now owned, how they could package it up next year, and who they could get to buy it.
SURFER finally managed to interview Paul Speaker in March, by which stage Speaker had been appointed CEO of the "new" ASP. Kieren Perrow was appointed interim Tour "Commissioner," a role that seemed to have been custom built for Kelly once he retires from competing. The old ASP board had been disbanded but a new board was yet to be appointed. The interview, Speaker's first direct engagement with the media, was a conference call with several other media organizations and seemed more a presentation—half the call was taken up with a prepared statement. It was slick, there were a lot of marketing buzzwords thrown around, and a dollar for every time "moving forward" was used could have bought the ASP back off Ian Cairns.
But it was a sign of the times and very different to an interview I'd done with former ASP CEO Rabbit Bartholomew, circa 2005 at the height of the Dream Tour, when he grabbed me around the neck, started punching his heart, and crying tears of joy about a wave he'd seen Kelly ride in Tahiti and how beautiful it was. Speaker, from the little we've seen of him, will make up in energy and business smarts what he lacks in world titles. "I am so enthusiastic and thrilled we have this chance," he says. "It's a joyful time, man. Really, incredibly cool."
So what can we expect in 2014? Well, we know Dane won't be there, but beyond that two things are becoming clear. The first is that this will be a sport. A mainstream sport. Speaker's NFL background almost pre-ordained that the new Tour would be framed as "the game." "For the first time we're able to approach this league as a global centralized sports league," he says, "and it's essential for us that those who are already engaged with us, and those who are invited in, see it as one of the premier global sports in the world." And secondly, unlike the former ASP, this incarnation will be a business. It won't be a ratings calculator, it won't be a marketing campaign for another business. It will be a business in its own right. "Centralized broadcast, centralized management, centralized sponsorship," as Speaker renders it down. The Women's Tour, for so long a year-to-year proposition, may also be a big winner of the new deal. Speaker has four daughters who are surf fans and he can see the potential. "There are way more brands that target women than men, and I don't know if we've done a good job of getting this sport in front of them and demonstrating how powerful this sport could be." “We’ll make sure the broadcast is best of class and the interaction with fans is best of class and we’ll never sacrifice any of that for bad waves.” —CEO Paul Speaker
But for mainstream dollars to be tapped there needs to be a mainstream audience, and amid the conjecture, how the new Tour will be broadcast seems to be the center of most interest. While there is no network deal on the table as yet, Speaker ruled out pay-per-view as an option in the broadcasting mix, hinting that convergence technologies will be the driver. "It's a really exciting time for surfing as technology is catching up to how people watch surfing. The world has changed and fundamentally 'broadcast' and 'webcast' are words used for yesterday, not tomorrow. When we talk about broadcast partners we consider online, digital, linear television, and multi-platform distribution as the one thing. We have consumers interacting with us in a manner that's different to any other sport and we have to recognize that." Although not mentioned in the interview, Paul has been overheard using the line, "broadcast, not bro-cast" hinting at who you might (and might not) hear announcing heats next year.
The other hot-button topic surrounding 2014 and beyond is whether taking surfing mainstream will see the Tour back on city beaches, in shitty surf. So far, no one has got rich holding surf contests in the tropics. "The product itself will revolve around the best surfers and the best waves," says Speaker using a familiar catchphrase, "and that's the Commissioner's part of it. We'll make sure the broadcast is best of class and the interaction with fans is best of class and we'll never sacrifice any of that for bad waves."
The current Commissioner, Kieren Perrow, is confident. "They get it. They need a mix of good, rippable surf like Trestles, then they need to get scared out of their minds at 12-foot Pipe. They've seen how it works. No one will watch 10 Huntingtons." The Commissioner's office will be the "keeper of the flame" and look after the sport—the waves, the rules, an "international best practice" drug-testing regime—while ZoSea will take care of the business. "There's always a concern in a sport that business becomes more paramount than integrity," states Speaker, "and we put those checks and balances in the Office of the ASP Commissioner. We've spent a tremendous amount of time with members of the old ASP—surfers, brands, founders—to ensure the integrity of surfing was protected." As to where the balance of power really sits between ZoSea and its Commissioner, we'll find that out on the next 20-foot day at Cloudbreak.
The $64,000 question—although it'll be closer to $64 million by the time we find out the answer—is will this whole thing work? And what happens if it doesn't? For so long the ASP has been without the resources or a real mandate to go forth and grow surfing outside of surfing itself. But now that it's free to chase those dollars, we'll find out for sure if those clams are actually out there. Having Nike, the world's biggest sports marketing company, retreat from surfing a month after the new deal was inked doesn't exactly instill confidence. But ask yourself, when was the last time you complained of too few people in the surf? Surfing seems to be booming seemingly everywhere except on the majority of surf industry balance sheets. And ZoSea's strategy might just sidestep the whole thing and look for a bigger pie altogether. Paul Speaker has a favorite statistic he's been rolling out from his time at the NFL, and it's that 97 percent of people who watch the NFL have never played a game of football in their lives.
Whether ZoSea succeeds may also depend on how big their war chest is. Their backer is reportedly Floridian billionaire, Dirk Ziff. His involvement to date has been as a (very) silent partner, although his skin in the game is reported to be somewhere between $20 and $30 million, chump change when your net worth is $4.4 billion. His motives for diving into pro surfing are also unknown. SURFER inquired about Ziff's connection to ZoSea (and Ziff's connection to the actual sea), but ZoSea was unable to offer a confirmation or denial or any background information. The interesting parallel here of course is Greville Mitchell and the "old" ASP. The avuncular multi-millionaire from the island of Guernsey was pro surfing's unlikely savior in the early 2000s, bailing out the ASP on more than one occasion. (In fact, the surfers themselves bailed the ASP out in 2002, with many only being repaid earlier this year.) And it wasn't that Mitchell was a red-hot surfer—he didn't surf at all—but his connections and friendships with the surfers themselves were strong and he contributed to pro surfing as a philanthropist, not an investor. The nature of Ziff's connection to surfing, if there is one, might dictate whether he's investing with his head or his heart, and it might ultimately decide the fate of the new Tour.
The other gentleman holding the fate of the "new World Tour" in his hands is someone a little more familiar to you than Dirk Ziff. In many places around the world Kelly Slater is pro surfing. In other places he's even bigger than pro surfing, and you get the feeling the new Tour might live or die by his engagement. Kelly has kept his cards close to his chest up until now, and all he's done is offer tacit approval and raise his hand at a meeting in France. But Kelly has long championed the notion of surfing as a mainstream sport and, reading between the lines, the fact that he's come out at the start of this season and committed to doing the whole tour (the first time he's done so in many years) tells you he's staying in the game with an eye to 2014. And the new Tour will need him. With the power base of pro surfing shifting back once again from Australia to California, Kelly will be crucial in winning over a market where the dominant paradigm places emphasis on looking cool rather than lifting trophies. Maybe someone from ZoSea also needs to call Dane.
"Will it work?" ponders Randy Rarick. "I have a big question mark on this. I don't want to see these guys fail; I love pro surfing. They just haven't shown enough cards for me to know for sure. But I hope they're successful. They're smart enough guys to be able to monetize it for themselves. Whether they can put enough back into the sport to keep it growing remains to be seen. But I'm cautiously optimistic. They're rolling the dice and for their sake, and all our sake, I hope they come up a winner because that will be good for surfing. We'll see in three years. The guy who's bankrolling them will blow $25 million in three years and if they can find a way to monetize it in that time, great, but if they don't they'll hand it back to whatever shell of the ASP is left at that time and say, 'Good luck.'" I put it to Rarick that it might go full circle and the IPS might get the rights back. "Well, I'll be here sitting at my kitchen table if that happens. But I'm not paying 25 grand."