The agency commits to reviving a soccer franchise
Published: August 23, 2010
Anomaly’s Carl Johnson likens his agency’s brand development projects — including its latest push to revive the storied New York Cosmos soccer club — to long-term, stock market investments and acknowledges that without traditional client relationships, Anomaly couldn’t play in this entrepreneurial space. In fact, Anomaly funds most such ventures via its profits from retainer clients like Nike, Motorola and Sony.
The New York shop is among a still relatively small number of agencies pursuing such “skin-in-the- game” deals, which, when successful, can enhance the entrepreneurial reputations of executives known largely for making ads. By taking equity or a cut of revenue in these ventures, agencies such as Trumpet, The Brooklyn Brothers, Deutsch, Crispin Porter + Bogusky, Berlin Cameron United and Anomaly eschew traditional client compensation schemes and demonstrate a willingness to take risks with the potential for longer-term rewards.
“That’s what clients are asking agencies to do — share some of the financial risk. Lawyers do that,” said Arthur Anderson of Morgan Anderson Consulting in New York. “I think there’s a very large market out there . . . Wouldn’t [a client] rather have a skilled advisor who has some real skin in the game and hopefully will be motivated in large part by making you successful?”
Anomaly’s Cosmos venture is among its most ambitious, involving the establishment of a limited liability company, the creation of a 120-page prospectus, the wooing of investors and the recruitment of international soccer icon Pelé. Johnson, as CEO of the New York Cosmos LLC, is central to the effort and the intellectual property deal, which, for Anomaly, began a year ago with a meeting in New York with Cosmos rights holder Paul Kemsley and ultimately aims to bring the Cosmos back to life as a franchise in Major League Soccer.
The obstacles to winning a place in MLS are formidable. The Cosmos will need a stadium, at least $40 million to enter the league and much patience because the Red Bulls franchise in New Jersey has exclusive rights to the region until 2013, according to Johnson. And if the Cosmos gain entrance into the league, Johnson estimates that the team will need hundreds of millions of dollars to operate.
Then there’s the larger question of saturation: Can a market that already fields a dozen professional sports teams support a second MLS club? Johnson obviously thinks so, but Terry Lefton of Street & Smith’s SportsBusiness Journal isn’t as sure, particularly given that other teams are spread out across the U.S. and Canada.
“Their last four or five franchises have great buildings, really deep pockets and outstanding ownerships. So, just because you’re the Cosmos doesn’t mean a lot to me when you’re stacked up against those guys,” said Lefton, who covers sports marketing and sponsorships in New York. “You need to have good financing, a path to a new stadium and a really good plan.”
Right now, the Cosmos company is focusing on building credibility and reestablishing roots in the New York City area. In June, Pelé signed on as honorary president in exchange for a stake in the operation. (Anomaly also has equity in the Cosmos — described by Johnson as a single-digit percentage of the company. To date, the agency cost has been time: a core group of four or five top executives work on the project, with help from another three or four when needed. Johnson, for example, works 18-hour days, seven days a week to manage Cosmos-related business, his agency and key clients.)
Other Cosmos principals include Kemsley, as chairman; Anomaly brand strategy director Dan Cherry, as executive director of marketing; and d irector of soccer Terry Byrne, who has longstanding ties to players such as David Beckham.
Additionally, after an early round of fundraising, the Cosmos has invested in two soccer academies and purchased the annual Copa NYC tournament. Cosmos principals also are talking to New York City about providing soccer equipment and facilities for children interested in playing the game.
Of course, fundraising continues to be paramount, given the entrance and operations costs as well as the price of building a new stadium. Cosmos principals are eyeing Queens as a potential home, given the availability of land and that the borough is “one of the hotbeds of soccer in New York,” Johnson said.
Anomaly’s sports brand marketing experience has proved invaluable; the shop handles creative duties on Nike’s Converse and Umbro brands and provides marketing and business advice to the Manchester City soccer club in the U.K.
Such credentials were key to Anomaly earning the trust of Kemsley when the blunt U.K. real estate mogul first met the shop’s principals in August 2009. And, in sizing up the opportunity, Anomaly “felt that the potential of the New York Cosmos was huge,” Johnson said. “It’s a global play with significant external funding where we are central to the outcome and it’s in our wheelhouse of what we know. It really is bang-on. So, you can say with real confidence, we know how to do this.”