Marquee Group, an International Management Team That Matches Agents, Promoters and Marketers, May Be the Look of Sports To Come
From the Print Edition:
Ernest Hemingway, Jul/Aug 99
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That future is not the Women's National Basketball Association or mediocre free agents who break the bank; not basketball shoes or football wagering. The future is one-stop shopping: a corporation, like Marquee, that manages, produces and markets sports and entertainment events and provides representation for athletes, entertainers and broadcasters. The future is global acquisition and consolidation--and sports firms that are publicly owned.
The Marquee Group was acquired by SFX Entertainment for $100 million, including debt.
In 1998, SFX paid the same price to gobble up FAME, the prominent sports agency that represents Michael Jordan and other NBA megastars. Two months before that, Marquee procured Park Associates, a United Kingdom firm that represents soccer players. Shortly before that it laid out $23 million to acquire the Hollywood production studio Tollin/Robbins, which is responsible for "Arli$$," a television show about a sport agent, as well as Varsity Blues, a film about smalltown high school football. If acquisitions continue at this pace Marquee's vice president of media relations Curt Block might need to learn speed writing just to get the press releases out. With business growing like this, there is ample reason to forget sports commerce for one evening and celebrate at a landmark restaurant.
Conversation jumps from one subject to another--why men like torpedo cigars, the best celebrity golfers, corporate acquisitions, the best 100 movies, thoroughbred racing, and the philosophy of Albert Camus--before settling on the mysterious allure of World Cup soccer.
"I saw a goal in a World Cup game yesterday," says Bob Gutkowski, the president and chief executive officer of the Marquee Group. "I'm 50 years old and I finally saw one!" Everyone's jaws freeze in mid-bite, as if E.F. Hutton had just spoken. "Who scored it now?" Gutkowski wonders out loud. "Was it Morocco or Norway? Or was it...I don't..."
"You want to know why they love soccer so much around the world?" vice president and Marquee cofounder Mike Letis asks rhetorically. "Because we [Americans] don't like it. If we liked it--forget it."
Realizing he's ignited an inferno, Gutkowski makes a gesture of corporate detenté. "We [Marquee] represent some great soccer players; so we love soccer," he says. "We represent 20 percent of the English national team."
With his distinctive white hair and beard, Gutkowski has been photographed time and again by New York's dailies. His high profile dates back to the early '90s, when he was president and CEO of Madison Square Garden and a ubiquitous presence in the arena's luxury boxes, cheap seats and pathways during the Knicks' overachieving Pat Riley run and the Rangers' Stanley Cup season.
In 1988, as president of MSG Network, Gutkowski inscribed his name in television history when he--and then-Paramount head Art Barron--negotiated a 12-year, $486 million deal for the rights to broadcast the New York Yankees on the Madison Square Garden (MSG) channel. People immediately wondered if he had paid too much. But after the channel's subscriber rolls increased to more than 5 million--and the network expanded to a 12-month operation--the wondering ceased. "If the Yankees were a brand name," says Letis, a big-hearted, Micawberesque character who insists that his cigar smoking contributes to memory recovery, "they'd be Coca-Cola."
The Marquee Round Table rests to the right of a white line on the floor at Elaine's. It's a kind of mark in the sand that tries to separate smoke-emitting patrons from nonsmokers in this restaurant that is known as a watering hole for New York literati. It's also become the "official meeting place" of the Marquee Group, according to Gutkowski. The smoking border is to no avail: Mike Trager, another Marquee cofounder, is puffing an El Imperio Cubano, its smoke wafting across the room as the front door opens and shuts repeatedly.
Sitting next to Trager is Chet Simmons, a veteran of television production since 1956, before anyone was even aware of how good the marriage of television and sports could be.
This crew--combining more than 125 years of production, management and marketing knowledge--make up the lion's share of the Marquee Group, which is considered to be the largest international sports corporation in the world. What does Marquee do? For one thing, it acquires companies. Companies such as Athletes and Artists, Alphabet City and ProServ, companies such as QBQ Entertainment and Sports Marketing & TV International. Marquee Football and Marquee Hockey are also under the umbrella.
Just now Robert Sillerman, with his wife, Laura, comes in. The head of SFX Entertainment, Sillerman took over the Marquee Group in a stock swap that gave shareholders a maximum of $4.75 worth of SFX stock for each share of Marquee stock they owned. "I hear the Meadowlands is up for sale," says Letis. "Let's buy it," Sillerman snaps. Everyone laughs, but only briefly.
Sillerman, recently named by The Sporting News as one of the 100 most powerful people in sports, has become the Aristocrat of Acquisition. After selling his radio group SFX Broadcasting to Capstar Broadcasting for $2.2 billion last April, he began swallowing up concert promoters, theaters, arenas and related assets. He is now the largest promoter, producer and venue operator for live entertainment events in the country. He doesn't think the marriage of sports and entertainment needs a trial run, since "sports is entertainment." Thus the acquisition of a sports firm is a natural. "All you need to be is a citizen of marketing and the world to see the impact that sports has had on entrepreneurship. The CEO of Gatorade says that he attributes a $700 million increase in revenue to the simple act of signing Michael Jordan. So what's happened in society is we're placing an increasing value on things that take place when there's a sense of community. Sports and entertainment are the two greatest examples. I also needed some quick tickets!"
"Excuse us while we bow," Letis says suddenly. Elaine Kaufman, the owner of the storied restaurant, is visiting the table. She looks at the table, cluttered with wine bottles, melons, bread and smokes--enough stock for a survivalist to take underground and live off for a year. "It's not like being out if you can't smoke," says Elaine. True enough. This is no table for an ascetic.
It might, however, be a wise place to be for an athlete deciding his career path or someone planning a sporting event. What makes the Marquee Group singular is its ability to handle an entire event from conception to production. Let's say someone at Marquee decides to stage a bowling championship among major league baseball players. He takes his idea to advertisers seeking sponsorships. With sponsorships in place, he approaches a Fox or a SportsChannel. After getting a commitment from television, Marquee gets producers, directors and broadcasters, whom they represent, in place. Then they market the production and set about the business of finding about 25 ballplayers (many of whom they presumably represent). The event goes from conception to production to execution, and Marquee has made it all happen.
It is sometimes called synergy--the pooling together of several talents that makes the whole greater than the sum of the parts. "It happens when people who are separately successful in different areas of sports business actually get better with a bigger entity," says Gutkowski. "It's a roll-up consolidation--the buying and putting together of successful companies to make them more successful. And we're doing it domestically and internationally."
In one way of thinking, the Marquee Group is the inevitable linking of people with common interests. In most every case, the Marquee people are guys whose love of sports preceded their entry into the business of sports.
New York City born and raised, Bob Gutkowski attended basketball and hockey games at the old Madison Square Garden on 50th Street and Eighth Avenue. He followed the Knicks through hard times and the Rangers through the middle years of a 54-year drought.
"We used to sneak into the old Garden and go all the way to the top section," recalls Gutkowski. "You couldn't see the crease of the goal. You didn't know a goal was scored until the red light went on."
Much to the chargrin of his mother, who thought he should be doing something more significant with a college degree, Gutkowski started as a page on the "Tonight Show" in 1970. He went on to hold various positions over 11 years at NBC, including director of sports sales, before handling the advertising and marketing for the 1980 Moscow Olympics. He sold 90 percent of the available ad spots six months before the opening ceremonies.
As vice president of ESPN in its early days, Gutkowski was one of the original program developers, acquiring the NBA, the United States Football League and college basketball for the network. He became the president of the MSG Network in 1985, and in 1991 became president of the renovated Madison Square Garden itself.
Under Gutkowski, the Garden bloomed. A New York Times article said "the aloofness of the [former president] Richard Evans regime was replaced by a more open way of doing business" under Gutkowski. "Bob's way was not to stay behind closed doors and communicate by memorandum," said Rangers president Neil Smith. Aside from his unceasing visibility, Gutkowski was more aggressive in booking music acts, like Barbra Streisand and Billy Joel.
"We had a great run," Gutkowski recalls. "If Viacom kept the Garden, I would still be there. But Viacom sold it" and the MSG Network, the Knicks, the Rangers and the Paramount Theater to ITT and Cablevision for $1.075 billion in August 1994. Under the new regime, Gutkowski could not last.
New York Times sportswriter George Vecsey wrote, "Bob Gutkowski presided over an unprecedented springtime in New York....He actually made decisions, actually ran the place, actually took responsibility for the two general managers and the two coaches and all the players and the way the place glittered and shook."
After a year of traveling and wondering if he would ever get "the fire in the belly" again, Gutkowski listened to a suggestion from his secretary. "Bob Sillerman and I got to know each other because our secretaries were friends. They said, 'Our bosses should get together; they would like each other.' " Gutkowski and Sillerman met for lunch several times at Bruno's in Manhattan and the wheels were turning. To pull off a combination sports-and-entertainment company, they would need some serious talent--people who could provide an artesian well of sports production and marketing knowledge.
Mike Trager was one obvious candidate. Trager, 56, once an outfielder for a semipro club in Baltimore, formed Sports Marketing and TV International (SMTI) with Mike Letis in 1984. The Greenwich, Connecticut-based company's first major event was the Breeders' Cup.
Before moving to Baltimore, Trager had lived in the Bronx, one block from Yankee Stadium. "I remember our apartment building overlooking Yankee Stadium. My father--and everyone in that building--would go to the roof and we could see into Yankee Stadium."
Trager took a degree in electrical engineering at Bucknell University, then did a tour of duty in the Army from 1965 through 1967. After military service, he completed his master's degree in business at Bucknell.
Trager got his start with NBC at WNBC-TV in New York, then went to KNBC in Los Angeles, where he performed in various sales management positions with enough distinction to get voted the top sales executive in the broadcast advertising business. He was vice president of sports sales in 1973, then vice president of NBC sports from 1973 until he left in 1980.
Later, as executive vice president at D'Arcy, McManus and Masius Advertising, Trager managed the Anheuser-Busch account, putting together the company's $25 million commitment to the fledgling cable sports channel, ESPN. The deal legitimized ESPN by providing an impetus for other advertisers to fall in line. ESPN then had considerably less than a million viewers; now it has between 65 and 70 million. Trager was later responsible for all the marketing and licensing in the United States for the Sarajevo Olympics in 1984.
Like Trager, Mike Letis joined the Marquee Group at its inception, when the company acquired SMTI. Bob Gutkowski calls Letis "the God of horse racing," and the Breeders' Cup, which Letis helped develop, has turned into the largest single day of thoroughbred racing.
"The Breeders' Cup Championship is the most important new sports championship event since the Super Bowl," Letis says unabashedly. "It is the only event where you get four hours of live horse racing; the most important day of racing of the year." Set in the fall, the telecast usually runs against the stiff competition of college football but still manages to get clearance from 90 percent of NBC affiliates. His love of racing led Letis to be the executive producer of Run to Glory, a documentary film about the 1986 Breeders' Cup in Santa Anita, California.
A diverse talent as a marketer, designer and producer, Letis also produced the ABC "Superstars" shows in the 1970s, which still appear in reruns. He also worked with advertiser J. Walter Thompson to get Major League Baseball involved with the "Pitch, Hit and Run Competition" for teenagers, a close cousin to the National Football League's "Punt, Pass and Kick."
Letis can barely contain his enthusiasm for the future of the Marquee Group. "One thought: sports belongs to the public. In the last decade, all you had to do is listen to sports talk radio to realize how much a public thing sports really is and how much it's part of the fabric of the culture. Sports belongs to the public; so does Marquee," he pauses, drawing on his Ashton Cabinet. "You buy a piece of us by buying stock and you own a part of the people that we represent. You're in the deal! And it's late in the game for this--it's almost 2000. People can't own stock in other sport companies. Because we're the only public company; we're for the people. What's the measure of your credibility in sports? There was no measure before. Now there's a measure: how much Marquee stock do you own? That's the measure, and it's going to be the measure." A victorious laugh goes up around the table.
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