Executive Suite: Tony Hawk leaps to top of financial empire

 

Edward Iwata

USA Today
March 10, 2008

 

VISTA, Calif. — Skateboarding legend Tony Hawk moves with the power and grace of a jungle cat. As heavy metal rock blasts in an industrial office building here, he swoops down a steep, two-story-high skateboarding ramp that would spook most people.

Other skateboarders hanging with Hawk whoop at his high-flying moves. For two decades, Hawk dominated the ESPN X Games and other competitions. Now 40, he's retired from competing.

But the tall, lean Hawk can still bring it during extreme sports shows around the world — or in these daily afternoon practices with his pals, who also are top skateboarders. They say Hawk nails tricks in 10 to 15 minutes that take them days to master.

"I put a lot of pressure on myself," Hawk says recently at his corporate offices here. "I always try to perform at my best."

Hawk, like Tiger Woods and Michael Jordan, belongs to that rare breed of athlete-entrepreneurs whose names and brands have transcended their sports and become mainstream icons in the popular culture.

With his marketing savvy and wholesome looks, family man Hawk introduced an outlaw street sport to the suburbs and shopping malls, helping to turn skateboarding into a multibillion-dollar industry. In the past decade, Hawk has made many millions of dollars from licensing and marketing deals with his popular Activision video games, with skateboard gear and clothing, and with corporate sponsors, including Jeep and McDonald's (MCD).

Now, Hawk is gliding into the next stage of his career. He hopes to keep growing his brand as a force in the media, entertainment and retail fields with fresh products and endorsements, from new video games to roller coasters at Six Flags (SIX) amusement parks.

Hawk's moves come as his name recognition among young consumers ranks No. 1 of all U.S. athletes, surpassing NBA basketball greats Shaquille O'Neal and LeBron James, according to Research International USA's TRU.

"It's not uncommon today for skaters and snowboarders to rank higher in recognition than top basketball, baseball and football players," says Senior Vice President Kathleen Gasperiniat the Label Networks market research firm.

Hawk is poised to take advantage of the U.S. and global markets for skateboarding, snowboarding and surfing, which are merging into one large "active sports" market popular among suburban and urban consumers.

Among Hawk's recent and ongoing business endeavors:

•Video gaming. At Activision (ATVI), the Los Angeles firm that has licensed Hawk's video games since the late 1990s, software developers are working with Hawk to reinvent and bring new thrills to his upcoming games.

It's the "Tony Hawk Innovation Plan," says Activision Senior Vice President Will Kassoy, who won't disclose details yet.

•Amusement parks. In a big entertainment deal with Six Flags, giant roller coasters called "Tony Hawk's Big Spin" — simulating aerial skateboarding tricks at 40 miles per hour — are opening at Six Flags amusement parks around the USA.

•Sports events management. Hawk's Boom Boom HuckJam show — a 30-city tour featuring Hawk and daredevil skateboarders, bicyclists and motocross riders performing stunts to rock and rap music — continues to sell out each summer in sports arenas, fairgrounds and amusement parks.

•Retail. Sports clothing maker Quiksilver (ZQK) and Kohl's (KSS), the national department store chain, sell Tony Hawk-branded apparel and shoes popular among youths and twentysomething consumers. Quiksilver hopes to expand Hawk's clothing and marketing presence in Europe, Latin America and China, says President Marty Samuels of Quiksilver Americas.

•Multimedia. Hawk's 900 Films production firm does projects for ESPN, Fox Sports Net, Warner Bros. and others. He hosts a weekly radio show on Sirius Satellite Radio. And he and an entertainment start-up called Funny or Die Networks have launched a website, Shred or Die (www.ShredOrDie.com), that showcases extreme sports videos.

Hawk also is popping up more on TV, making appearances on shows from Fox's Are You Smarter Than a 5th Grader? to ABC's Oprah's Big Give.

Meanwhile, as the skateboard king hits middle age, he hopes to leave a philanthropic legacy. Since 2003, his Tony Hawk Foundation has given $2 million to non-profits to help build 400 skate parks in poor neighborhoods from Yakima, Wash., to Greensboro, Ala. Hawk makes appearances to publicize the skate parks, and he also performs at celebrity fundraisers.

Getting started

In the 1980s, when Hawk was a gawky kid growing up in San Diego, skateboarding was a cult street activity for outcasts. Hawk says that skateboarding — called "skating" by the athletes — challenged him more than team sports. "I was a runt, a lot skinnier and smaller than other kids," he says, "so skating was a great physical outlet for me."

As skateboarding grew, the young Hawk won championships and endorsements that helped him buy a house and start a small skateboarding firm with his four siblings. But fickle teen consumers hurt the skateboarding market in the early 1990s, and Hawk's business struggled.

Then skateboarding took off again in the late 1990s, as the independent-minded children of baby boomers fell in love with extreme sports. ESPN's X Games became a huge hit, and Hawk's Pro Skater video games became top sellers.

In the USA, skateboarders, surfers and snowboarders spent $11 billion last year on sports gear, apparel and accessories — up from $5 billion in 1999, reports Board-Trac,a sports market research firm. For many, Tony Hawk became the face of extreme sports. He's "an icon to youths, and his appeal will continue to grow," says Marie Case, co-founder of Board-Trac.

In the $18 billion video game market, Tony Hawk games have sold 30 million units in the past decade and have consistently ranked in the top 10 in U.S. sales the years of their releases, says industry analyst Anita Frazier at the NPD Group research firm.

Activision's Kassoy says that Hawk's rise as a superstar converged with the video game industry's growing interest in the action-sports market. Hawk's games also gave players more freedom and creativity to guide and perform tricks with their skateboarding characters than older video games had.

"The Tony Hawk game changed the paradigm for action-sports games," Kassoy says.

Now Hawk runs Tony Hawk Inc., his private multimillion-dollar business with 30 employees, from spacious suburban offices 40 miles north of San Diego.

Tattooed employees tap at computers. Snazzy skateboards hang from the walls. Hawk airs his radio show from a glass-encased broadcast booth. In a cavernous back room, he and his friends practice on the giant half-pipe skateboarding ramp to the thrashing sounds of the Clash, Slayer and Metallica. "They had to raise the building roof 10 feet to make room for us," says Hawk, grinning like a mischievous kid.

Hawk's sister, Pat, a former backup singer for John Denver and Michael Bolton, is general manager of the business. She runs the daily operation, while Hawk is the public face and creative force.

"All of this is his vision, his passion," says Pat Hawk.

Friends say Tony Hawk brings the same intense drive to skating and business. In trying a dangerous new trick, he'll break down the moves, adjust his body or angle of attack, then go for it until he perfects it.

Likewise, Hawk and his team spent years creating, planning and perfecting the Boom Boom HuckJam tour, a multimillion-dollar project with more equipment than a Rolling Stones tour. No one had attempted a daredevil sports event like it before.

Colleagues credit Hawk's success and Elvis-like appeal among youths to his marketing chops, his respect for the skateboarding culture and a surprising lack of ego for a megastar. It's not unusual to see Hawk flying coach, riding in friends' old cars, and gobbling down hamburgers while traveling, says Jesse Fritsch, a skateboarder and co-host of Hawk's radio show.

"He's a real dude," Fritsch says. "I've never seen someone so successful be so down to earth."

Hawk walks the fine line between corporate dealmaking and keeping his street credibility with skateboarders. His support of the sport and its athletes has blunted criticism that he's sold out.

Keeping it real

Hawk's entertainment attorney, Jared Levine, says Tony Hawk has turned down many lucrative commercial deals — from food products to toys and games — because the companies and marketing approaches were too hokey or not realistic portrayals of the skateboarding culture. The Hawks have the final say on marketing strategies. "There are plenty of product ideas out there," Hawk says. "But are they authentic, are they real? Most don't feel like the right fit."

Even with Hawk's influence, though, the fast-growing U.S. market for skateboarding and other board sports may be slowing. Many in the youthful X Generation, who fueled the extreme sports boom, have grown up and left the sports.

The upside: Millions of those consumers now are family men, and they're turning the board sports into family activities for kids and spouses. Case at Board-Trac says that a birth rate surge in the 1990s will lead to another boom soon in the board sports, as those babies become teen consumers of extreme sports goods.

Today, the extreme sports market also attracts consumers in their 40s and beyond. They buy everything from surfer's shorts and T-shirts at Macy's and Nordstrom to skateboards and other gear at small sports specialty shops.

Action sports also are going global, as millions of youths in Europe, Canada, Russia, Mexico and elsewhere embrace the activities and apparel. Sales data are sketchy, but global revenue and the number of participants are rising, and Hawk and other extreme sports figures are widely admired, says Gasperini at Label Networks.

Meanwhile, sports apparel is evolving internationally into a funky mix of urban hip-hop fashions and suburban stylings from skateboarding, surfing and snowboarding, says chief analyst Marshal Cohen at NPD Group, who calls it "the skurban market."

"There's tremendous growth opportunity, and Tony Hawk can represent more than just (skateboarding)," Cohen says. "This market has evolved into a worldwide cultural phenomenon."

But even great athletes lose marketing clout when they retire, says marketing professor Brian Tillat St. Louis University in St. Louis. "If Hawk continues to tour, it'll serve him well," Till says. "But if he cashes out and moves to the Caribbean, he's won't have the same fan following or endorsements."

Hawk's colleagues say his appeal transcends generations, and his business acumen won't wane.

"Tony can still skate pretty damn well, and he lives the lifestyle," says Samuels at Quiksilver. "He's a pioneer and ambassador for the sport and the market."

Past the skateboarder's image, Hawk clearly has long-range plans for his ever-broadening business, although he won't disclose them.

"I wear a lot of different hats," Hawk says. "But in the end, I just want to be known as a skater."