 Figure-skating star Kim Yu-na appears at the Busan International Motor Show in Busan, April 29. / Korea Times File |
By Kang Seung-woo
Staff Reporter
Under Kim Yu-na's three-year contract with IB Sports, South Korea's fledging sports management company may have had little room to envy worldwide sports mogul International Management Group (IMG), studded with high-profile players, such as Tiger Woods, Roger Federer and Peyton Manning.
While the then-promising prospect was evolving into the megastar in and outside Korea, the six-year firm came out of nowhere to become a self-proclaimed ``world top-10 sports marketing company.''
However, Kim's move to a self-established agency late last month is casting dark shadows on the enterprise in years to come.
The business is confidently bracing for a ``murky future.''
``There will be changes to some extent, but we expect that it (losing Kim) will not be a hard blow to the company,'' IB Sports Senior Vice President Yoon Seog-hwan told The Korea Times.
``We admit that the company has improved its image thanks to Kim, but the percentage of profits earned from her in our total earnings was not that high, annually accounting for 10 percent or so.''
IB Sports was established in 2005 and made a name for itself, acquiring the exclusive broadcasting rights of Major League Baseball (MLB) after beating three major local television stations.
IB Sports has also had the rights to sell various sports events ― Asian Football Confederation (AFC) matches, the Korea LPGA, the IAAF World Championships in Athletics, Italian Serie A football games, the Ultimate Fighting Championship (UFC), the Korean Basketball League (KBL) and two channels on Internet Protocol Television (IPTV).
In 2007, the burgeoning company expanded its business operations to sports management, signing a deal for exclusive rights on managing Kim's business deals, including endorsement fees and TV or movie appearances.
Despite its short history, it drew attention to itself by signing up hot prospects to compile a star-rich roster, which includes footballers Ki Sung-yueng and Jong Tae-se of North Korea, golfer Park In-bee, gymnast Son Yeon-jae, mixed martial arts fighters Choo Sung-hoon and Kim Dong-hyun.
It also signed Olympic and world pole vault champion Yelena Isinbayeva of Russia to do her marketing in Korea last December and recently landed up-and-coming female pool playing sensation Cha Yu-ram.
According to the public announcement by the Financial Supervisory Service (FSS), IB Sports made 47.8 billion won ($43.18 million) in total revenue in 2009, a 12.1-percent decrease from the previous year, and it recorded 2.1 billion won in operating profit en route to recording 1.9 billion won in profitability.
While the company was winning recognition, so was Kim, to an even greater degree.
Making her senior debut in 2006, Kim burst onto the figure skating scene, winning the World Grand Prix Final in December of that year.
After inking a deal with IB Sports, Kim continued to provide scintillating performances, compiling a brilliant career, and she grew to be one of the most-sought after figures beyond sports.
As a result, she has shot numerous commercials for Hyundai Motor, Samsung Electronics, Maeil Dairy, Tous Les Jours, CJ Group, and jewelry maker J.Estina.
Her saga climaxed at the Vancouver Winter Olympics in February, where she won the gold medal in the women's singles event in world record fashion.
During the Winter Games, Forbes named the 19-year-old, along with American snowboarder Shaun White, as the top-earning athletes participating in the Olympics with $8 million (9 billion won) each to their name.
Kim, arguably the biggest box office draw among local athletes, performed in an IB Sports-organized ice show after the season and it sold out on every occasion.
But the two sides made the headlines on April 26, as they failed to extend her contract and the former world champion announced that she would launch her own management company "All That Sports (AT Sports)."
Park Mi-hee, Kim's mother, will serve as CEO and the majority shareholder, and Kim will participate as a shareholder, too.
``IB Sports runs a variety of businesses besides managing Kim, so we decided to set up a company that could fully focus on Yu-na's many needs,'' Park said in a statement.
AT Sports, which will work on organizing an ice show and nurturing young prospects as well as managing Kim, started its business on the first day of May in the Gangnam District of Seoul, right after her agreement with IB Sports was up on April 30.
The side effect of her departure had an immediate influence on the firm, as its shares plunged 10.83 percent to 2,100 won in the KOSPI 200 Index right after her announcement.
When Kim won the gold medal in Vancouver in late February, its stock hit their peak, jumping to 5,450 won, but has been on the decline. As of Sunday, their shares stood at 2,270 won.
Despite the bad omens for IB Sports, the Senior Vice President said that a variety of portfolios will increase its income in 2010 and furthermore in the years to come.
``Last year, the MLB broadcasting rights hit a snag (due to the high exchange rate), but this year, we expect to record a surplus of 3 to 4 billion won,'' he said.
Although it is up in the air whether IB Sports will continue staging the ice show "Festa on Ice," without Kim, it will organize five KLPGA Tour events in 2010.
To improve the company's situation in the future, it struck a marketing deal with the Korean Olympic Committee (KOC), with the Incheon Asian Games taking place in 2014, and a domestic sponsorship contract of the 2011 IAAF World Championships in Athletics in Daegu.
``Its income will be lower due to Kim's departure, but it has many pipelines to produce profits, such as broadcasting rights for international sports events," said Byun Seung-jae, an analyst at Daewoo Securities.
``Considering the Daegu World Championships in Athletics will be held next year, it has hopes of bettering sales.''
Meanwhile, there are mixed expectations for Kim's newly-launched AT Sports. IB Sports, expressed its best wishes to its former client, and believes that the agency needs to be business-minded to continue Kim's success.
``Kim's mother is familiar with figure skating. While Kim was with us, we often listened to her about it. As for her management, they may be able to do it without any problems,'' Yoon said.
``But in terms of business, they will be required to have business know-how to expand their company.''
