Advertising agency network the Interpublic Group (IPG) has created the second biggest sports sponsorship organisation in the world by buying Advantage International and a majority stake in Alan Pascoe’s API Group.
The two companies are regarded as the second and third largest sports marketing companies in the world, and the move is a direct challenge to the dominance of the largest sports agency, IMG.
Phil Geier, chairman and chief executive of IPG, says: “By establishing this new arm for IPG, which will be separate from all other companies in the group, I believe we will be able to compete at the highest level in all aspects of sports marketing.”
Advantage and API buy and sell sponsorship rights for events including the Davis Cup, the Cricket World Cup, Benetton Formula One and the Cape Town Olympic 2004 bid. They also represent sport stars including Steffi Graf, Michael Chang, Darren Gough and David Campese.
No senior changes in personnel are expected this year. However, in 1998 the two companies will begin to merge operations.
IPG claims billings of the combined agencies is 345m with revenues of over 31m.
Sports industry insiders say the deal could work well because Advantage is strong in the US, as well as in athlete representation. It set up a London office in 1985.
By contrast, API is strong in Europe and has a successful TV arm.
Observers say the result of the increased competition will lead to a bidding war between the two companies for major sporting events. It will also provide more choice for top athletes.