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AVP Pro Beach Volleyball Tour is
offering fans and advertisers a sport that has
grown all around the world in a relatively short period of time and was the hottest ticket
of the summer Olympics
AVP Pro Beach Volleyball Tour, Inc.
6100 Center Drive, 9th Floor
Los Angeles, CA 90045
Chairman, CEO and
Interview conducted by:
Lynn Fosse, Senior Editor
July 20, 2006
CEOCFO: Mr. Armato, what
is your vision when you became CEO and where are you today?
Mr. Armato: The vision was to take a sport that was one
of the original great American sports, volleyball, which had not been marketed in a highly
professional way, and put a platform in-place that it could grow upon. We wanted to focus
on what todays sports fans want and the kind of competition and lifestyle that those
fans are looking to consume. We also wanted to serve the needs of advertisers today;
advertisers that have been shell shocked by the likes of TiVo and the fragmentation in
media and the fact that people are much more mobile than they ever were. We built this
platform upon the needs of fans and brands of the 21st century. Since we
acquired the AVP Pro Beach Volleyball Tour in 2001our first season was 2002we
have experienced dramatic growth in fan attendance. In addition, the number of events has
increased from 6 to 16 events this year and we will continue to grow in our number of
events going forward. We have also grown dramatically from $1 million to $3.5 million in
prize money. Very importantly, we have grown our media platform tremendously; when we
first acquired the tour, there was no television exposure to speak of. In 2002, we had 4
live hours on NBC and about a dozen on cable and now we are up to fifteen live hours on
NBC this year. We will have our first two broadcasts on FOX broadcasting live and we will
have approximately 75 hours on cable television through Fox Sports Net. We have been able
to grow this sport dramatically and we are most proud of the fact that this year,
Scarborough Research named AVP the fastest growing sport because our fan base grew by 40%
over the previous year.
CEOCFO: Who is
interested in volleyball?
Mr. Armato: If you think about it, everybody in this
nation and around the world is familiar with this sport of volleyball and beach
volleyball. It is something that you do not have to explain to people; what the AVP
presents is the aspiration or highest level of the sport. Volleyball is a sport that has
grown all around the world in a relatively short period of time, a sport that is the
hottest ticket of the summer Olympics. It speaks to fans that want to watch great
competition; world-class athletes competing in a beach party atmosphere. It is uplifting
and a full entertainment experience, which is what fans today want.
CEOCFO: Where do you
keep the line between nice, tan, lovely looking bodies and a sport?
Mr. Armato: Many people are attracted to the sport of
beach volleyball because they hear that there are girls in bikinis running around on the
court. That is OK from our standpoint if it brings us to the attention of people.
What we have is a real authentic sport played by world-class athletes and the fact
that they are wearing bikinis and volley shorts is just a way to serve as an opportunity
to give us a chance to be discovered by people. The Olympic games is a perfect case in
point; people were going to the Olympic venue because they heard that is was a sexy sport.
These athletes are simply wearing the same uniformsbikinis and volley shortsthat
they have always worn on the beach playing a sport. It is not something that we made up,
it is very organic to the sport. We do not have to apologize for the fact that it is a
sexy sport but at the same time, we do not need to focus on it either. It is something
that naturally bubbles to the top. My main point is that we are an authentic sport. We
want to become one of the most respected sports in the world so we are not simply focusing
on this as a beach party; it is a natural outgrowth of the lifestyle that surrounds the
CEOCFO: Where do you
have your events and how to you get additional venues?
Mr. Armato: We have our events in various locations and
that is the beauty of our sport; it is very flexible. We can have an event in its natural
setting in the beaches of Los Angeles. We can bring our sport to the middle of the city.
We can also bring our sport to a mid-western beach like Chicago on the shores of Lake
Michigan or in the\mid-west in Cincinnati, where we do it at a tennis stadium. We are very
flexible as a sport. You can have this sport anywhere you can dump sand. Another thing we
are doing is bringing it to New York for the first time. We announced recently in a press
conference that we have partnered with Brooklyn Sports and Entertainment. This is
the same group that is bringing the New Jersey Nets to Brooklyn in several years and run
by well known names in sports entertainment including Bruce Ratner, owner of the New
Jersey Nets basketball team, and Brett Yormark, CEO of Nets Sports & Entertainment. We
are going to conduct together an event on Coney Island and have that event on NBC in
August this year. We are growing the sport, and like many things around the country, there
is a real appetite for the AVP and pro-beach volleyball in cities around the country
outside the west coast. We are excited about that.
CEOCFO: How do you
Mr. Armato: I think you have to get people to
experience it. This sport sells itself once someone has an opportunity to see what we have
to offer. We believe that AVP pro-beach volleyball is the most compelling summertime
sports entertainment in the world, as well as a great-perceived value; we give great value
to the fans. It does not cost you $500 to bring your family down to the events and get to
partake not only in beach volleyball action, but also you have an opportunity at our
events to be entertained on a variety of levels, music and activities. There are all kinds
of things to do, with lots of beautiful people around. Our athletes are incredibly
accessible; they have all graduated from college, they are articulate and speak to fans.
It is a wonderful experience.
CEOCFO: How do you
prevent what has happened in so many other professional sports where the perception is
that athletes are overpaid and aloof, which has resulted in real animosity between
athletes and fans?
Mr. Armato: Our athletes measure up to the athletes of
any other sport quite favorably. They are all college graduates from our nations top
schools like Stanford. They enjoy interacting with the fans, and do not believe they are
above the fans. Finally, AVP athletes do not mind being viewed as role models. AVP Pro
Beach Volleyball Tour has the kinds of athletes that you want your kids to look up to and
this is the kind of sport that advertisers want to have their brand associated with.
CEOCFO: Which areas
produce the most revenue and how do you make more?
Mr. Armato: We have revenue streams similar to other
sports property. We have advertising revenue, as well as sponsorship revenue, licensing
revenue, live gate revenue and hospitality revenue, merchandising revenue and all the
revenue streams that you would likely associate with a sports property. The predominant
driver today is advertising and sponsorship. What this sport is about is building more and
more fans to watch on site and to view our media. As this happens, advertisers will pay
for the connection between our sport and those fans. We are focused on the fans, on the
brands and we are proud of the fact that this sport seems to be on fire.
CEOCFO: Are sponsors
seeking you and looking for what you have to offer?
Mr. Armato: We are viewed as a hot property right now,
which wasnt the case when we acquired the tour four or five years ago. I am proud of
the fact that beach volleyball and the AVP have a lot of momentum going forward. That is
exciting and encouraging to us. We have some of the best brands in the world that are
associated with us now; brands like Bud Light, NAUTICA International (subsidiary of VF
Corporation NYSE: VFC), The Gatorade Company (subsidiary or PepsiCo, Inc.
NYSE: PEP), McDonalds Corporation (NYSE: MCD), XBOX, Nature Valley (subsidiary of
General Mills NYSE: GIS), Herbalife Ltd. (NYSE: HLF), and Paul Mitchell. We do well
when it comes to relationships with advertisers and sponsors. Gatorade just made a
commercial featuring one of our AVP stars Terry Willis, which has been running in the last
few days in some of the biggest television shows out there. We are growing, moving, and
building our brand and we are proud of that.
CEOCFO: You have the
most prominent in volleyball tour; how do you stay ahead of the competition?
Mr. Armato: There is always competition because
everyone is competing for the same dollars. It is far more competitive today. Fifteen
years ago, there were only a few major sports, but today there are many for people to
enjoy. We have to always be working as hard as possible to serve the needs of fans so we
continue to grow our fan base and make sure that we are delivering to sponsors an ROI that
is tangible. We are not complacent and we know we have a great challenge in front of us.
My mantra this year is we want to retain all of our drifting advertisers and expand our
advertising base going forward. That is how we maintain our growth.
CEOCFO: Why should
investors be interested and what should they know that maybe doesnt jump off the
page from an investment point of view?
Mr. Armato: I think this is an opportunity to get
involved with vertical ownership of a sport and an entire community to grow and build,
especially with the kind of innovative things we are doing. Owning a sport with all the
top men and women that are under exclusive contract to the AVP, I think is very exciting.
I think it is exciting as the sport grows and in the interactive world where
community-building is so important. I think we have gone a long way to owning this
community and we are going to continue to build the community, developing features into
our website etcetera. I think the sky is the limit to a sport like this, especially
because of the fact that it is one of the great American sports that is now being marketed
the right way, not only in the United States, but globally as well.
CEOCFO: In closing, what
are your challenges ahead?
Mr. Armato: There are challenges in any sport property
because you are competing with everyone else out there, so we have to continue to maintain
our position as a growing hot sport, which is very important and I think we are doing it
by offering a great product to the fans. We have to continue to evolve our capability to
bring brands to life and integrate them into the fabric of our events and our media. We
have to continue to understand what it takes to build community and give that community
everything that they will need in order to feel like they want to stay part of the
community and tell the people about the virtues of being a part of that community.
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