The Business Of Sport

Imperative to swim with the tide

Founder and managing director of Enterprise Sports Group Terence Khoo understands that the local sports marketing firm is not in the same league as the global giants. But the former national rugby captain believes there is still a place for it to not
Founder and managing director of Enterprise Sports Group Terence Khoo understands that the local sports marketing firm is not in the same league as the global giants. But the former national rugby captain believes there is still a place for it to not just survive, but thrive. ST PHOTO: JONATHAN CHOO

Local firm ESG reinvents itself as a wave of well-funded international giants enters the sports rights business

As an athlete, Terence Khoo was a rugby player so adept at sidestepping challenges that he would have made the professional league in England had it not been for an untimely injury.

As a businessman, the 46-year-old is also quick to adapt with the times, and has been particularly mindful of the need to do so since he founded Enterprise Sports Group (ESG) 12 years ago.

When the sports marketing firm started out in 2005, it was one of the biggest players in creating and managing mass participation sports events here. It conceived the Women 10K as well as Singapore's first kids-only run, an event now into its 10th year with title sponsor Cold Storage.

By 2010, the firm had propelled itself into the big league of sports rights management, beating global sports media giants to be appointed sponsorship agent for the Badminton World Federation (BWF).

ESG's other clients include French energy giant Total and lifestyle products group Osim International. Both inked sponsorship deals with the BWF in the past few years.

Khoo's latest venture represents yet another shift for the business. He invested $1.2 million in Little Swim School, a local start-up that focuses on teaching young children the sport. This included sinking $700,000 into constructing an indoor pool in WestWay, along West Coast Highway.

  • $71 m

    US$50m: Estimated worth of sponsorship deals ESG helped BWF sign during their seven-year partnership.

    $1.2m

    What ESG has invested in Singapore start-up Little Swim School.

A Sheffield University law graduate, Khoo said no one really teaches you how to do sports marketing. His education in running ESG has come from learning when change is needed, and being quick and willing to make adjustments.

"Necessity is the mother of invention," said the former national rugby captain, still looking capable of making a dash for the try line. "It's a necessity to drive growth and grow opportunities for the business - so we change course."

ESG's foray into the Little Swim School was largely a result of the changing landscape of the sports marketing industry.

After almost seven years of working with the BWF, its partnership with the international governing body will end this year.

While working with the federation, ESG enlarged the federation's sponsorship portfolio significantly and is understood to have helped the BWF ink an estimated US$50 million (S$71 million) worth of sponsorship deals.

The BWF signed an eight-year exclusive deal - believed to be worth hundreds of millions of dollars - with China's Dalian Wanda Group last year. Controlled by China's richest man Wang Jianlin, the group also acquired Swiss-based sports marketing firm Infront Media, World Triathlon Corp - organiser of Ironman Triathlon races - and also has a stake in Spanish football club Atletico Madrid.

It is just one of several international firms on an aggressive drive into sports, making it harder for players such as ESG, whose financial muscle is not as strong, to compete.

Khoo, who broke his shin bone in three places during an Anglo-Chinese School Old Boys' Association game in 1995 which ended his dreams of a professional career, said: "The rights business is a cruel, hard business.

"You put guarantees on the table and you have to generate funds to cover that guarantee and (also) give yourself a little margin. (Then) the bigger players show up, they can ride the risk, they have access to greater funds, and you know, that's the game.

"When one door closes, you realise the market is starting to shift. The sooner you come to a realisation, the quicker you react.

"We needed to diversify, distribute our eggs in different baskets."

In his words, it was time to recalibrate, re-learn and reinvent.

Rights management still takes up about 70 per cent of ESG's business dealings, but he expects his swim school venture to grow, and even expand regionally.

It is already yielding fruit, with Little Swim School's intake trebling to 600 over the last seven months. There are also plans to lease more venues for further expansion here.

"There's a lot more room in Singapore before we're done," said ESG's managing director. "Swimming is a middle-class business and Asia is a very big middle-class market. There is real potential (for it) to replace or complement the rights business - whatever is left of it."

Over the years, ESG's staff make-up has gone from one largely focused on operational matters, to one that is driven by sales and business development. It has also grown from five staff to about 30-strong today at its Alexandra Road office, and a turnover that has multiplied many times over from the $2 million in its first year.

ESG has even dabbled outside of sport, successfully working with China's UnionPay on the payment firm's rewards schemes.

Said Khoo: "We're a sports marketing company, yes, (but) over time, we would probably be a diversified marketing group - that's what I see us as.

"Would we compete (with the global giants), or do we want to compete? I think just by sheer size and volume, we're in different leagues. It's not a resignation - it's a reality.

"We're happy with who we are. We've demonstrated that there is opportunity, that we can do it, and if we're correctly motivated and have the right team, we can grow, continue to be sustainable, profitable and still enjoy ourselves."

•The Business of Sport is a monthly series that explores the current trends and talking points of the emerging sport industry.

A version of this article appeared in the print edition of The Straits Times on March 10, 2017, with the headline 'Imperative to swim with the tide'. Print Edition | Subscribe