Q: How would you describe your business style?
A: For better or for worse, I've always been the classic, genetically wired entrepreneur. I think my Mom gets some of the credit (or blame) for me being the way I am. Every morning that I can remember as a kid, my Mom put a list of chores on the breakfast table. She instilled in me a strong work ethic, making it clear that I should always want to play hard, but that playing hard came only after working hard.
Ingrained in my head is my mother waking me up on Saturday mornings with the phrase, "Ray, today is a work day." It makes me groan just thinking about it…Q: What was your first entrepreneurial venture?
My first memory of business is when I figured out that me and my friend James were two of the better first grade football players on the small block where we lived.
I knew that colleges charged admission, so I set up an admissions stand in my front yard whereby I could charge my loyal fans $1 each for the chance to watch me and James play.
I tried to stay positive after no one turned out for our first two games of compelling one-on-one football. I even tried to change uniforms and offer snacks for the Game 3, the big "rubber match." Still nothing.
Luckily, my Dad came home early and gave us 50 cents each to watch the game. I was hooked.
A few years later, in the 8th grade, I talked a 16-year-old into driving me and my friends/employees around the neighborhood to paint address numbers of the curbs. I invested in all the stencils and paint, and cut my team in on the profits.
It actually worked for half the summer, but being from a small town, it didn’t take me long to go through my pool of potential customers.
Q: When did you begin focusing on sports and entertainment?
My senior year of college, I created the first product ever using the name "Dream Team," cutting a deal with the NBA to group-license their players at a fraction of the cost of signing players individually.
As you’d imagine, player agents weren’t happy, but I actually beat the system and created a poster whereby you could send in a picture of yourself, pick four of your favorite NBA players, and through a lamination process, have a snappy red, white and blue poster featuring you and four NBA superstars.
So, instead of a career with General Mills, at 22, I set out on my own in a partnership with the family that owned the San Antonio Spurs. As I recall, several times I created formulas projecting near-term sales in the millions and calculated my forthcoming riches.The only problem was, I didn’t know anything about direct marketing or running a business, and my arrogance convinced me I could figure it all out on my own -- right up until the month we went out of business, which was month #6.
The good news is, one of the agent groups I’d angered a few years earlier with my poster scheme was ProServ, who represented dozens of NBA players (including a young guy for the Chicago Bulls named Michael Jordan).
Still upset about the poster thing, ProServ explained to me how they were going to sue me. I explained how all I really wanted was a job with them. They agreed to it and I started a 21-year career in sports marketing.
Q: What did you learn at your first jobs after college that you've applied over the course of your career?
My first boss at ProServ, Henry Brehm, taught me that, in general, social type guys out of college are lousy at planning and details. He broke me down and built both of those skills, for which I’m thankful.
Overall, my time at ProServ taught me that if you treat people poorly, the talented ones will leave and you have nothing. I also learned that no matter what people say, they don't like it when one person, or a few people, take all the credit and limelight.
I think 30-plus former ProServ employees left to start various agencies within a 10-year period. In contrast, I think 2-3 TMA employees have done so in our first 15 years. I hope we always work on getting the "treating people fairly" part right.
After ProServ, I went to work for a small agency -- Talent Sports International in Dallas -- where I learned that being a nice guy and a terrible businessman is not a sustainable strategy.
I also learned that if you think small, you'll be small; and if you think big, but don't back up your thinking with strategy (i.e., action steps and grinding your ass off) then you’re fantasizing , and you'll be out of business sooner than later.
Candidly, I also learned that it helps if a business is run properly (i.e., pays taxes, pays employees, etc.), though that’s likely another story…Beyond that, I learned that if you meet someone who is young, but a great person and a hard worker, then you should try to team up with them and give it a go. I met a guy like that in Brad Penman (at left) when I was at Talent Sports, and my life – not just my career – is much better for it.
Q: How long was it before you started thinking about launching your own agency?
I began thinking about starting my own agency within the first year of starting my career at ProServ. I was 23, still very naive, very cocky, and not very skilled.
But it wasn't until 1992 that I began considering it more seriously. By late 1992, I was owed more in commissions at Talent Sports than I’d made in the last 18 months combined. The president had mentally checked out, and I knew I needed a Plan B ... soon.
So I prepared a 48-page business plan for a new agency that would focus on (1) marketing athletes, (2) event management, and (3) promotions. I’d been humbled enough to know that I needed a partner, so my goal was to become an equity partner in a Dallas office of IMG, Millport, or this up-and-coming little agent group based in Memphis called Athletic Resource Management (ARM), which was led by two agents: Jimmy Sexton and Kyle Rote, Jr.
Of my three options, IMG turned me down, Millsport founder Jim Millman didn’t even listen to the pitch, and ARM, after six months of negotiating, agreed to give me a $75,000 line of credit (with interest) and a few introductions to the players they represented.
Q: Talk about the agency's first few years in business, a time when a lot of small businesses fail. What was the turning point for TMA?
Early on, ARM really wanted me and Brad to focus on two of the clients in particular: A crazy receiver for the Dallas Cowboys named Alvin Harper, and a crazier golf instructor named Wally Armstrong. Both clients were awful, but we made enough (barely) to keep the lights on the first year.
The second year, we talked Scottie Pippen into letting us head up his marketing. Unfortunately, a few months later, Scottie signed his rights over to a new marketing agency – Nike Sports Management. Huge bummer.But in a move that might have saved our fledgling agency, Scottie did something extraordinary: After considerable begging and pleading, he agreed to go back to Nike and tell them he also was going to give this dink agency in Dallas a one- year shot at securing some endorsements, too.
Scottie actually let me listen to the call with Nike where he said "of course, Nike will squash these guys down in Dallas, and I’ll let them go in a year…”
Incredibly, Nike’s people secured one deal for $7500 for Scottie, while we secured more than a dozen worth well over a million dollars. In a move just as extraordinary, Scottie fired Nike Sports Management, the very company who was paying him millions of dollars a year on his shoe endorsement.
After the Pippen deal, The Marketing Arm had a couple of other big breaks:First, Nokia allowed us to manage the Nokia Sugar Bowl in collaboration with Millsport. Millsport was the big dog, and our four-person agency had no business being involved.
But a guy named Chris Smith (at left) stepped up so huge, and after a year, our little shop unseated Millsport (see letter below) as the lead agency and went on to work with Nokia for over 10 years.
Then, at Frito-Lay, two executives – John Pleasants and Brenda Coppell – were a little frustrated with their agency, and allowed us to drink beer and come up with ideas for various brands with them, as long as we never required a retainer.
So we drank, we ate, we came up with ideas. We also really pissed off their agency, but Frito Lay paid us well for consistently coming up with great ideas.Lesson: Don't underestimate the little guy's ability to kick your ass on creative. It just takes one person, one client, and one idea to change the whole landscape. [Case in point, fast forward 10 years and look what Andrew Robinson’s team did with Frito-Lay last year.]
Finally, a cocky hotshot named Jeff Chown started really beefing up the talent side of our business. When he wasn’t busy with the ladies, he spent the other six hours of the day delivering for Pippen and growing our portfolio of marketable athletes, which by then included Mike Modano, Tim Hardaway, Reggie White, Jason Sehorn, Michael Finley, and dozens more.
Thank goodness Mindy came along…
Q: How is TMA different than all of the other agencies you've seen and worked with over 20 years?
Ideas are one differentiator. I've always believed that ideas are the premium currency of an agency.
But as TMA has grown, and the industry has grown, evolved and consolidated, it’s clear that the ability to execute broadly and with excellence is also a critical point of difference.
Q: Of all of the ideas to come out of TMA over the years, which are your favorite?
I can't really narrow down my favorite ideas over TMA’s 15 years, but pre-Omnicom (1999), a few come to mind.
First, Pippen's endorsements with Ameritech (now AT&T), including creating TV ads for Ameritech featuring Pip, and his deals with Mazda Japan, Ginsana, McDonald's, etc.Creating branded content for Nokia in 1995 during the halftime of the Sugar Bowl, and refreshing it for 10 years was big.
Michael Jordan and the Doritos Final Four show -- also big.
And managing the Scottie Pippen charity game that featured Michael Jordan, which was the last game ever played at the old Chicago Stadium.
There are many more, of course. Most of my favorites were probably never sold in…
Q: What prompted you to approach Omnicom about acquiring TMA?
By early 1998, I knew that the industry would consolidate under the big holding companies. I also knew that I didn’t want to be on the outside looking in. Trust me, being a small independent sucks, and it’s way harder than most people can imagine.
Truly, we just barely survived the first three years, and the next three were a brutal amount of work. In Year 6 (1999), we sold to Omnicom.
Q: How did the sale come about?
I built a 70-page business plan of how we would grow a tiny company into basically what TMA is today. I shopped it around to a dozen potential buyers. Omnicom was far and away my first choice, but we actually got another offer from a company that was offering more money up front, but long term they would have been a disaster.
And remember, we were so small then (12 employees in ’98; 17 the day we sold to Omnicom in ‘99) that it was unlikely that anyone would buy TMA.
Thank goodness for the internet stock bubble or maybe it would not have happened.
Q: What made TMA an attractive acquisition target?
In reality, we had one huge thing in our favor, and one huge thing with the potential to crush us. In our favor was $1 million in high-margin revenue from the Pippen deals alone, so we looked really well- managed and profitable.
But what I knew was the Chicago Bulls roster, of which Pippen was a key part, was going to break up and Scottie was about to be traded, effectively killing all of the Pippen revenue. This fact became reality two months after we sold to Omnicom and our revenue was immediately cut in half.Yep, we had some work to do.
But we stuck to the plan, which was to ease our dependence on repping athletes, and do more brand work. Just six months later, we somehow won all of the Southwestern Bell (SBC) biz as a complete longshot underdog.
Lesson: Always work the back room and agree to what you have to agree to in order to get the business; things will always change from there.
Q: Why is TMA here at 15 years?
There are lots of reasons why TMA has survived, but the reason is not one idea, or one client, or one person. I'm a right-brained guy. To make it work, I surrounded myself with really strong left-brain operations and account management people.In short, TMA has had a lot of great people who committed to an evolving but common vision, and have absolutely busted their asses to execute the plan.
[Ray with his wife Ellen.]
