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Octagon

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Octagon is one of the world's leading sports and entertainment marketing agencies, with offices in 22 countries. The group handles all aspects of sports and entertainment marketing, including sponsorship negotiation and monitoring and talent management. Owned by Interpublic, the company has now recovered from a disastrous venture into the motor racing sector at the end of the 1990s which cast an undeservedly negative spotlight on the business as a whole. Interpublic dismantled that side of the company (at some considerable additional cost) and the remainder of the Octagon group has worked hard to erase memories of the whole unfortunate experience.

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Brands & Activities

Originally conceived as a sports marketing company, Octagon has broadened its remit to cover the whole sports and entertainment field. It offers a wide variety of services covering all aspects of the marketing and commercial management of sports, music and entertainment events, including sponsorship negotiation, licensing and merchandising, television rights and production, and artistic management of sports and entertainment personalities. It represents a variety of sports and entertainment personalities, although it is strongest in action sports. Other personalities in its portfolio include NBA MVP Stephen Curry, Olympic swimmers Michael Phelps and Natalie Coughlin, England footballer Daniel Sturridge and marathon runner Paula Radcliffe; NASCAR driver Jimmie Johnson; TV personalities including Piers Morgan, Tess Daly and Amanda Holden, Trish Regan and retired tennis star Martina Navratilova. Advertising Age estimated global revenues of $172m in 2014, including $124m in the US.

The group has worked closely for several years with a number of other PR and event management businesses within Interpublic, including entertainment PR Rogers & Cowan, a unit of Weber Shandwick. In 2009, those partnerships were largely replaced by the creation of Octagon PR, a joint venture with Golin Harris. Octagon First Call was established in 2006 as a specialised unit to consult on and negotiate celebrity sponsorships. In 2012, the group acquired UK-based music and entertainment consultancy Frukt.

London-based Octagon CSI, a leading distributor and producer of high quality sports television programming, was sold to management in 2006, becoming CSI Sports. It was acquired in 2007 by Octagon's main rival IMG.

Background

Octagon was formed in London in 1997 under the management of Lowe Group founder Frank Lowe. Lowe was already a well-known figure in sports-related marketing. In 1979 he founded the Stella Artois tennis tournament in London, still one of the world's best-known tennis events. The idea behind Octagon was to create a sports marketing agency to rival world leader IMG, founded by legendary sports agent Mark McCormack. To this end Octagon began acquiring a string of other small agencies in 1998, beginning with the athlete management agencies Advantage International and API Associates. Advantage had evolved out of Dell, Craighill, Fentress & Benton, a law firm in Washington DC that had been one of the first to specialise in sports negotiation and management, and was one of the main architects of the US Association of Tennis Professionals (ATP) in 1972.

In 1999 Octagon paid a whopping $120m to buy Brands Hatch, the former Grand Prix racetrack. Octagon already owned the World Superbike championships event held at the track, but the real reason for the purchase was the fact that Brands Hatch had recently acquired a 15-year license to host the British Grand Prix from 2002, following disastrous logistical problems at its traditional home, Silverstone. Following the purchase, Brands Hatch chairman Nicola Foulston joined Octagon's board, only to resign two months later for "personal reasons". Shortly afterwards, in a severe blow to Octagon, Brands Hatch was denied planning permission to make the alterations necessary for the Grand Prix after protests from environmental groups. With a 15-year contract to host the event, Octagon was then forced to take out an expensive lease on Silverstone as well, and pay for further alterations there in order to allow the race to go ahead. Management problems at both tracks later caused British Formula One boss Bernie Ecclestone to describe the British Grand Prix as "a country fair masquerading as a world event", a direct criticism of Octagon's management. The group also made an expensive £27m investment in German football team Eintracht Frankfurt, only to see the team relegated from the German premier division a few months later. Lowe was even reported to have tried to persuade Interpublic to make a bid for his beloved Manchester United football team.

Frank Lowe relinquished the CEO role in late 2001 and the agency's HQ moved to New York, under the control of Les Delano, a founding director of the business and longtime colleague of Lowe. In late 2002, Interpublic identified unspecified "operating issues" within the Octagon Motorsports division as a major contributing factor to a group profits warning which took the markets by surprise. This was thought to relate to heavy losses by the racetrack businesses. In another shock, the agency's single best-known event, the Stella Artois Tennis Championships, was transferred out of Octagon and into sister agency Lowe Brand. CEO Delano stepped down in the wake of the group's mounting problems, and it was further restructured. Various rumours surrounded Octagon by late 2002, including suggestions that it could be broken up and sold back to management. In March 2003, Interpublic admitted that it was investigating "exit strategies" for Octagon. 

The motorsports business was finally disposed of during 2004. Brands Hatch and three other tracks were sold for just $26m to a consortium headed by Formula One driver-turned-entrepreneur Jonathan Palmer. Later Interpublic made two further deals to extricate itself from its commitments. The first was to terminate the contract to run the British Grand Prix after 2004, at a cost to Interpublic of around $93m. A second deal costing $49m allowed it to end its lease on Silverstone at the end of the year.

Last full revision 9th June 2016

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