Dispatches, April 1999
Spiked Almost Off the Map
By Tim Zimmermann
Let's begin with a flashback. Atlanta, Georgia. July 1996. Beach volleyball is making its Olympic debut while serving as party central for a Summer Games synonymous with hype. At Atlanta Beach, rowdy fans suck down margaritas, wolf-whistle their appreciation for the bronzed athletes, and ù between games ù perform the
Macarena for millions of television viewers. The American team of Kent Steffes and Karch Kiraly responds by pocketing the sport's first Olympic gold medal and trumpeting its win on The Tonight Show. Upshot: Beach volleyball appears poised on the brink of cultdom. "My God, it was the number-one new sport," recalls Steffes, 30. "The possibilities seemed unlimited."
Now fast-forward three years to the present. The euphoria is gone. In its place, astonishment and despair ù both sentiments provoked by the spectacle of a multimillion-dollar sports franchise collapsing like a two-bit carnival act. Corporate sponsors and television networks that were pouring millions of dollars into The Next Big Thing have pulled out. Three
of the four domestic tours ù two of them women's ù have disbanded. And the Association of Volleyball Professionals, organizers of the men's game in the United States since 1983, has filed for Chapter 11. While the sport tailspins, players, managers, sponsors, and fans stare in appalled fascination and ask themselves, How could this have happened?
The future of men's beach volleyball now rests in the hands of the AVP, whose plight offers a sobering commentary on the pitfalls of sports as business, and a white knight in the guise of Spencer Trask Securities, a New York investment firm that has agreed to buy the AVP. Together they hope to resurrect the sport through a radical makeover based on fiscal discipline
and smart marketing.
That may seem like a no-brainer, but the current crisis traces back to the AVP's policy in recent years of funneling more than 30 percent of its sponsorship dollars into exorbitant prize packages ù a move made possible by the makeup of the tour's highly unorthodox board of directors, which consisted exclusively of players. Though the hefty purses attracted
even more athletes and boosted media coverage, these gains were bought at the expense of retaining a talented staff to market, promote, and administer the budget of the tour itself ù in short, a stable business infrastructure.
Lacking this frame, the AVP swiftly fell prey to financial mismanagement and professional misconduct. Cash-flush players started shirking promotional interviews in order to train or spend more time with their families, while frustrated sponsors started to wonder whether they were getting the exposure they had paid for. "The AVP wanted all the benefits of a big
sports business, but they never really ran themselves like a business," recalls Jon Miller, senior vice-president for NBC Sports, which for a time was airing more beach volleyball than either tennis or boxing before it pulled the plug following the 1997 season. "It was one of the biggest disappointments we've ever been involved in."
The organization finally got a wake-up call in July 1997 when the tour's chief financial officer was alleged to have embezzled some $50,000. The ensuing investigation revealed an accountant's nightmare: abysmal bookkeeping and $2.3 million of debt. In early 1998, the desperate board temporarily enlisted Harry Usher, a respected sports manager who had been chief
operating officer for the 1984 Los Angeles Olympics, to nurse the crippled tour through the upcoming season. Usher immediately slashed purses in half and the players launched a campaign to win back sponsor confidence. But it was too late. Honda and Coppertone, two major investors, decided not to renew their deals for 1999. When Miller Brewing Company, the AVP's title
sponsor and a major investor since 1984, followed suit in August, bankruptcy was imminent.
So where does this leave the game now? Spencer Trask hopes to turn things around by putting a professional management team in place and by taking the league back to its southern California beach roots with swimsuit contests, musical acts, and looser rules to allow jawboning between players and the crowd. "Beach volleyball is entertainment," says Bill Berger, a
former volleyball marketer who will run the AVP tour for Spencer Trask. "Advertisers eat that stuff up."
At the moment, all of the AVP's marquee players are expected to participate in a scaled-back 1999 circuit, which will be aired on the Fox Sports network and is scheduled to kick off on the first of next month in Clearwater, Florida. But even so, overcoming the AVP's tarnished past won't be easy. In fact, Berger and company are still scrambling to secure $4 million
simply to get the tour up and running this year. "Poor management and greed have a way of coalescing into a situation where you end up in these donnybrooks," says Usher. "Everyone's taking a wait-and-see attitude about beach volleyball."