File photo: Stephen Albanese | Tailstar.com
In 1992, Jamie Salter and a partner saw an opportunity in a new sport called snowboarding and formed Ride, an apparel and equipment company that would go on to become the No. 2 brand behind Burton.
Eighteen years later, Salter’s 21-year-old son introduced him to another burgeoning sport and the branding guru found himself in familiar territory. In early September, Salter and his Authentic Brands Group purchased the Tapout and Silver Star brands.
Salter, who’s handled brands like Polaroid, Linens ‘N Things and Halston, calls Tapout “the Nike of MMA.” He has big plans for MMA’s most beloved clothing and lifestyle brand, which he shares in this exclusive interview.
Sherdog.com: There was some confusion over the purchases when they were announced. A Bloomberg.com report said that Authentic Brands had purchased Tapout, Silver Star, and Hitman Fight Gear, though Hitman wasn’t listed in ABG’s official press release as an acquisition. It was my understanding that Hitman had previously been purchased by Tapout, thus making it an asset in the deal?
Jamie Salter: That is correct. Hitman was already assigned to Tapout.
Sherdog.com: There have been industry rumors that ABG could be purchasing as many as three additional MMA clothing brands as well. Is that still a consideration?
Salter: We don’t comment on our acquisition strategy, but it’s safe to say that we’re looking at other things.
Sherdog.com: Could you describe the mechanics of what yourself and ABG do, in particular to these MMA brand acquisitions?
Salter: It’s a roll-up strategy with a distribution plan with a cross between retailers and wholesalers. The one thing that retailers and wholesalers want to know is that you have a sold distribution plan in order for them to make their margins. It’s a well thought-out distribution strategy: How do we cover the market from the mass to the mid-tier to the specialty and making sure that everybody doesn’t bump into one another and we have clean distribution.
The other reason why we do it this way is obviously to spread the different people that work for the company across multiple brands. Obviously from an overhead standpoint, there’s a brand manager for Tapout and there’s a different one for Silver Star and a different one for Hitman. But from a back-office standpoint, we don’t have to have three CFOs. We just need our CFO. It’s the same thing from an operational standpoint, including customer service and other shared services behind the scenes.
Sherdog.com: So, the idea is to gather an array of brands to cover all the bases with retailers and wholesalers?
Salter: The brands that we bought are very strong ones in the marketplace and they do have distribution strategies that were laid out prior to us coming, but what we try to do is cover different distribution needs in the market. Kohl’s is very different than J.C. Penney and J.C. Penney is very different than Macy’s and they don’t necessarily want to carry all the same product.
Sherdog.com: As a businessman, what lured you into the MMA industry?
Salter: The first person that drew me into the industry is my 21-year-old son, who has trained a few times with Sam Stout in Ontario where he goes to business school. For the last three years, he’s been telling me that this business is the fastest-growing sport in the world, that it was great, and that I really needed to look into it. I said no and that went on for three years.
There was a fight in Montreal (UFC 113 in May) and my son said, ‘Look, I really want you to come, Dad, to this UFC thing. This is something that you’re really going to want to get involved with and you have the expertise for because you come out of the action sports, the sporting goods business and it’s very similar.’ So, I went to Montreal with him and his eight friends.
Sherdog.com: What happened next?
Salter: I called the CMO of the UFC, Brian Johnson, who’s a friend that had worked for me in a prior investment, Ride Snowboards. I told him my son thought I should get involved (in MMA) and I told him I wasn’t getting involved but I was coming anyways. I went there and met Dana (White) and Lorenzo (Fertitta) and Brian and everybody. The more I got acquainted in the business, the more I felt there was an opportunity to do the roll-up strategy and that a lot of the companies were under-capitalized. With capital invested in these businesses and a good business plan, I felt really strongly that we’d be able to put together a nice collection of brands.
Tapout kept coming up as very strong brand, if not the No. 1 brand in the world in the space. And Silver Star was coming up as the great lifestyle brand, not only in the MMA space but also in the action sports space. If you go back to my Ride Snowboard days, I understand the action sports space, so that very much intrigued me.
Sherdog.com: When you looked into the MMA clothing market, did you see a saturation of brands?
Salter: There’s definitely over-saturation, just like any other business. It’s a relatively new industry and a lot of the brands came on in the last five years. It’s like any other industry. It’s going to consolidate down to two or three companies because that’s what happens.
Sherdog.com: Have you seen any limitations with the MMA industry that could hinder its growth, whether it be internal or external?
Salter: No. I think it’s very much like the snowboard business, where snowboards weren’t allowed on the mountain when they first came out and one by one, each allowed them in. It took some years, but eventually every single mountain allowed snowboarding and they figured out it was just as safe as skiing. At the end of day, the sport prevailed. At one point it accounted for about 50 percent of the snow sports and was bigger than skiing. MMA is in its infant stages. I think it has huge growth. I feel the opportunity is at about a five or six right now out of 10, so the growth is tremendous in front of us.
Sherdog.com: How will you market a clothing line attached to a “brutal” sport to the masses?
Salter: It’s not a brutal sport. It’s safer than a lot of sports. There’s less injuries in mixed martial arts than there is in football, which is an All-American sport. Football isn’t going away and it is at the mass level. I feel very strongly that MMA is a safe sport. The UFC has got some great rules that they’ve put into place over the years and this is no different than a workout. It’s fitness. Ninety percent of the people involved in MMA, it’s a great workout for them. I have a 14-year-old and a 16-year-old who both train -- not to be fighters but to get themselves into great shape.
I think we’ll continue to tell this story. We just met with one of the largest retail stores in the U.S. and as they said, they can’t ignore mixed martial arts. It’s here and it’s here to stay. It’s just how we tell the story to the consumer.