Several nimble, innovative ad agencies have sought to diversify the company business model by expanding their portfolio beyond traditional client business (and production). We’ve discussed several examples of agencies investing in product development before, including Anomaly. Anomaly’s most recent (and ambitious) venture involves reviving the New York Cosmos Major League Soccer team; this entails the establishment of New York Cosmos LLC, the creation of a 120-page prospectus, and the recruitment of investors and international soccer icon Pelé, among other items.
Reviving this soccer team is a highly ambitious challenge – but one that can be immensely rewarding for the very entrepreneurial agency. Key obstacles for Anomaly and the New York Cosmos LLC will be to raise sufficient capital investment and operations funding, as well as time and other resources; to elaborate:
- Securing a stadium
- At least $40 million to enter the league
- Time – the Red Bulls franchise in New Jersey has exclusive rights to the region until 2013
- High operational costs (in the hundreds of millions)
- Saturation: is there room in NY professional sports for a second MLS club?
That said, both entities have already experienced some successes, including signing on Pelé as honorary president in exchange for a stake in the operation. An early round of fundraising has also allowed them to invest in two soccer academies, and to purchase the annual Copa NYC tournament. Cosmos principals are also in talks with New York City about providing soccer equipment and facilities for children interested in playing the game.
Anomaly is one of the more assertive ad agencies that have structured at least some client relationships and engagements around equity or revenue-stakes; these more vested interests in the success of client ventures have allowed them to profit from their success – and to in turn invest those profits into their own intellectual property, including ventures like a cosmetics line and a music label.
Fortunately, Anomaly already has ample sports brand marketing experience, given its work with Nike’s Converse and Umbro brands, as well as with the Manchester City soccer club in the U.K.