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X Games' wider world keeps growing

ESPN's action sports competition has grown into a valuable franchise with plans to expand to six global events by 2013, raising the question: How far can it go?

July 27, 2011|By Baxter Holmes

The idea for the X Games, the latest edition of which begins Thursday in downtown Los Angeles, was hatched in a Connecticut bookstore by an ESPN employee in 1993.

Two years later, the first X Games were held in Rhode Island and, looking back, the action sports event was rather whack.

X Games officials looked upon the athletes they corralled, a so-called rebellious lot of adrenaline junkies, and remarked how crazy most of them looked. The athletes, in turn, glared at the "suits" embodying the so-called establishment and wondered if their talents were being appreciated or their image was only being exploited.

Beyond that standoff, the events that were offered included a smorgasbord of extreme: sky surfing, street luge, rock climbing, bungee jumping.

"You talk about hit-or-miss," X Games founder Ron Semiao said, laughing.

Yet fans, sponsors and advertisers came. It worked.

And from those humble beginnings, the X Games have grown into a multimillion-dollar franchise that took its most ambitious step in May by announcing plans to expand to six global events beginning in 2013, which raises the question: How far can the X Games go?

Many economists and experts say quite far, largely because they have a media engine in ESPN as their sole owner.

"You've got this single entity that's thinking, 'How can we expand worldwide?'" said Rodney Fort, a University of Michigan sports economist and professor of sports management. "And they don't need to get approval."

That freedom allows the X Games to evolve every year — adding, removing and tweaking events — which is all by design.

"They try to keep their pulse on what new things people are doing and they can incorporate those into the games," said Dennis Coates, a past president of the North American Assn. of Sports Economists.

By keeping the X Games fresh, they maintain a grip on the young, male demographic (about 12 to 34) that is highly profitable. "That's the sweet spot for a lot of advertisers, a lot of sponsors, and for ESPN," said Lee Berke, president and chief executive of LHB Sports, Entertainment & Media in New York.

The X Games franchise makes more than $120 million in retail annually from its consumer and licensing business, according to a 2009 SportsBusiness Journal story.

But AJ Maestas, president of Navigate Marketing, a Chicago-based sports research and marketing firm, said the X Games have reached maturity in America — where they have a summer event in L.A. and a winter event in Aspen, Colo. — so going global is their best bet.

Financially, it's a wise move because the X Games are competing more domestically for advertising and sponsorship dollars with similar events such as the Dew Tour.

The X Games have hosted competitions in 14 countries in recent years, but a stronger international footprint — with four new global events planned outside the U.S. — would allow them to tap into new and potentially deeper revenue streams.

An unseen factor in the X Games' ability to grow, though, is the independence of their athletes.

"They're not organized, unionized, there's no collective bargaining," Fort said.

Dave Mirra, a BMX and rally car driver who holds the record for most X Games medals (24), hopes they receive benefits and a pension one day. "It will be cool to see how organized we are in 20 years," Mirra said.

It's unknown where action sports may be by then, but it's difficult to envision them letting go of their identity.

"It's inherently rebellious, in a sense," said iconic Brazilian skateboarder Bob Burnquist. "I'm 34, I'm a professional skateboarder, I have all the success in the world, but I skate in pools and I run from police. That's what I do."

There may be a rebel culture to it, but Curren Caples, a 15-year-old skateboarder from Ventura who competed in X Games 16, said he has noticed that has changed somewhat.

Caples said that when he started skating many kids frowned on events, saying competing meant "selling out."

Now, he said, "There are kids who are skating just to get sponsors."

Since 2009, TV viewership of the X Games has increased 7% to more than 5.7 million unique people, higher than the growth of any other annual special event in sports.

Yet as action sports grow in popularity, it's unclear whether they can gain a foothold in U.S. culture, something soccer, the world's most popular sport, has struggled to do. Like soccer, action sports can be played most anywhere and are relatively cheap, which creates a large participatory audience.

"That's one of the things that makes X Games extremely popular: It's featuring grass-roots sports," Berke said.

When the 1998 Winter Olympics in Nagano, Japan, added snowboarding, it marked a shift to the mainstream for action sports. It elevated athletes such as Shaun White, now a two-time Olympic gold medalist in that event, into mainstream fame.

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