Playing All the Way to the Bank--Bros Sports Marketing

On a weekend afternoon in March 2010, the Los Angeles Dodgers prepared for what would be Major League Baseball's first game in Taiwan in 17 years, a matchup with players from the Chinese Professional Baseball League (CPBL). Led by legendary manager Joe Torre, the Dodgers planned to field players that included superstar Manny Ramirez as well as two Taiwanese stars, pitcher Kuo Hong-chih and hitter Hu Chin-lung.

The excitement of 10,000 baseball fans permeated the atmosphere, but the weather failed to cooperate: the rain came pouring down shortly before the game was slated to begin. It then continued to fall in fits and starts, forcing crews to cover and uncover the field several times. After two hours of delay, Eric Chang, chairman of event or-gan-izer Bros Sports Management, cancelled the game. As bitterly disappointed fans filed out, heartbroken and teary employees of Bros, which had been planning the game for 10 months, forced themselves to buck up and handle ticket refunds.

Chang and Hu helm an innovative business peopled with employees who average just 30 years of age. The two men named their firm Bros to reflect their non-traditional management philosophy, a philosophy that sees everyone on staff treated like a sibling.

It cost Bros roughly NT$80 million to bring the Dodgers to Taiwan for three games, plus an additional NT$50 million for insurance for the players, associated personnel costs, and other expenses. Though the other two games went off without a hitch, the lost ticket sales and sponsorship moneys for the cancelled game left Bros with a NT$50 million loss.

The games weren't Bros' first international sporting events. In 2009, the company brought an NBA game to Taiwan for the first time ever.

Organizing such an event involves managing thousands of details and making constant adjustments. Most people assume that Chang, an athletic 183-centimeter-tall man who loves sports, has little depth, but that large body has a sensitive side.

In the early morning hours following the finish of the first NBA game in Taipei, Bros employees cleaned up the venue before heading off to a celebratory banquet. Chang watched the crowds leaving the Taipei Arena, then wandered over to a nearby convenience store, picked up a six-pack of beer, and sat down on the ground to enjoy it. As emotions coursed through him, he found himself thinking of a line from a song: "Applause rises from amidst the cheers / Tears flow across a smiling face." He remembered childhood dreams, the fears and difficulties associated with staging the game, all of it running through his mind, the emotions lingering.

To understand how Bros got to this point, you have to look back 10 years to its beginnings, when Chang and business partner Mosy Hu were organizing corporate events. Not yet 40, the two men have guided Bros from humble beginnings to its present position as a heavyweight organizer of international sporting events.

Though both men grew up in a Tao-yuan military-dependents community, they couldn't be more dissimilar. Chang is tall and strong, speaks loudly, feels a little rough around the edges, and is a diehard basketball fan. Hu is shorter, was nicknamed Dumbo (after the flying elephant), and loves baseball. Classmates at Ta Hua Junior College, they didn't much like each other at first. But, drawn together by their love of sports, they became friends and went into business together once they'd graduated college and completed their military service.

Balloons filled with prizes descend from above, the excitement building as partygoers wonder where they will alight. Pegatron's Christmas party was planned entirely by Bros.

Their first business utilized a small commercial truck, which they set up as a food stand selling hot dogs with Chinese-style pickled cabbage in a Zhongli night market. New to business, they didn't know how to calculate their costs and didn't realize they would also be facing constant fines from police. The business lost money and they shut it down after just a few weeks.

In 1999, following this failure, Chang went to work for Adidas and Hu for the Chinese Professional Baseball League. Then one day Chang heard about a Nike shoes sales promotion in the Hsinchu Science Park that generated NT$6 million in sales in just five days. Sensing a business opportunity, he got in touch with Hu and the two began organizing promotional sales events for the park's 130,000 workers.

The two picked up wholesale goods in a cargo truck in the evenings, then sold them at their promotional events during the day, stirring up buyer interest and hawking products using a microphone and loudspeaker. They sold everything from children's goods to bedding and women's undergarments. Relying entirely on word of mouth, they arranged 24 promotions a year that earned a tidy 15% profit, generating sales in excess of NT$100 million over the course of just two short years.

Chang laughingly recalls that they took over the management of the science park coffee shop where they used to kill time to make themselves look more like a proper company and to seek out more business opportunities. In addition to serving as their office, the coffee shop became their networking headquarters, a place where they connected with ever more tech-company benefits managers.

It took 17 years to bring the Dodgers back to Taiwan. The photo shows pitcher Eric Stults, who started the Taipei game.

In 2001, Mitac Computers presented the two men with a new business opportunity, hiring them to organize a family-day event with a budget of NT$860,000. Drawing on their background and network in the athletics industry, they were able to borrow several large pieces of athletic equipment to spice things up. Word spread, other companies began approaching them about planning events, and Chang and Hu formalized their new endeavor by establishing Bros.

Chang claims that the company sells only two things-health and happiness-and that its core value is: "No Bros, no fun!"

Budgets for corporate events can vary wildly, ranging from as little as NT$30-40,000 to as much as NT$5-6 million. But by 2004, the company was generating revenues of NT$140 million from planning such events.

To date, Bros has organized more than 400 large corporate events for Hsin-chu tech companies. In fact, nearly 90% of the Hsin-chu Science Park's more than 400 companies have used their services. Bros has planned Hon Hai's year-end party for seven years running, not to mention Taiwan Semiconductor's sports day, and Acer and AU Optronics' family days. They've also begun to expand into managing the gyms and clubs these companies provide their employees.

The roughly NT$30 million per year that Bros receives in management fees from 12 firms have put it on a solid financial footing. Its clients include Mac-ronix, Hon Hai, Kinsus, and Applied Materials (Taiwan), and services include site planning, equipment management, and the hiring of professional trainers. Since Bros is able to tailor programs to company needs, it is frequently able to beat out gym chains in the bidding for operating rights. These days, Bros seems to handle the majority of Hsinchu Science Park employees' leisure time activities.

Good friends and business partners, Eric Chang (right) and Mosy Hu began their business careers vending in night markets. They moved on to organizing sales promotions in the Hsinchu Science Park before finally realizing their dreams by creating a successful sports marketing firm.

As their reputation grew, Chang and Hu realized that events planning was becoming a mature industry and the barriers to entry were low. It seemed likely they would soon face competition from imitators who would offer cut-rate services to gain market share. Moreover, if Bros employees were required to do highly repetitive work, they would get bored with their jobs.

In 2006, the men began actively transforming and expanding Bros, seeking to develop it into a more professional sports-entertainment business. Development proceeded along five axes (international athletic competitions, performances, branded events, venue operations, and corporate events) as they sought to gain experience setting up international athletic competitions, build the Bros brand, and increase their competitiveness. They also established a sports management division that signed 20 young baseball players including American minor-leaguer Lin Che-hsuan. By providing their players with annual stipends of roughly NT$3.5 million, they hope to enable them to focus on developing their talents free of financial worries and help create the next Wang Chien-ming.

Whether organizing corporate events or setting up international competitions, Chang says that the com-pany's objective is the same: to sell the concept of "sports" and "exercise" to the Taiwanese public. To this end, Bros continues to organize the kind of international sporting events fans love, tying sponsorships, promotions, advertising sales, and "sport" together into an integrated marketing program that aims to increase Taiwan's international visibility via global television broadcasts.

Chang and Hu have been laying the groundwork for their expansion since the company's earliest days. Take their cooperation with the NBA, for example. Acting on its belief that Taiwan's sports-watching market was mature, the NBA established a Taiwanese branch office in 1997. When the NBA and Nike invited 12 superstars, including Ray Allen, to play a number of exhibition games in Asia in 2001, Bros won the contract to organize the Taiwan game. Unfortunately for Bros, the September 11 attack on the World Trade Center caused the games to be cancelled just as the players were getting set to depart.

But Bros didn't give up. In 2002, the NBA again proposed holding events in Taiwan and Bros offered to pay US$250,000 per year for the right to organize summer camps for kids. But without a large venue for the camp, attendance in Taiwan was expected to be far lower than that in Japan. And with mainland Chinese interest in sports rapidly catching up to that of Taiwan, many expected the Bros venture to fail. Bros, on the other hand, took the long view.

Bros' first foray into cross-strait cultural events brought Zhang Yimou's extravagant Chinese production of Turandot to Taiwan.

In 2008, Bros helped bring Scottie Pippen, scoring machine Glen Rice, and Clyde "Clyde the Glide" Drexler to Taiwan for a star-studded exhibition.

Bros' tireless organization of events had made clear to the NBA just how ambitious the company was and laid the foundation for mutual trust and cooperation. In early 2009, the NBA proposed holding a pre-season game in Taipei and scheduled a Denver Nuggets-Indiana Pacers game at the Taipei Arena. Eager fans leapt at the chance to see an NBA game in person, purchasing some 9,000 tickets almost the instant they went on sale. Preparations for the event lasted nine months, with Bros meeting with the NBA twice a week to ensure that the venue met the highest possible standards for a sporting arena, even going so far as to fly the court floor in from the US.

But organizing a major sporting event is a high-cost, high-risk endeavor. Pulling it off requires the support of industry, government, and audiences. Taiwanese companies, which have been late to the game in developing their own brands, have shown relatively little interest in putting advertising resources into sports marketing. Other than financial services and telecommunications companies, which anticipate ancillary benefits from sporting events, and firms like Giant and Coca Cola, whose brands are linked to active lifestyles, few companies have been willing to support sporting events in a significant fashion.

On the government front, Chang argues that for a country as internationally isolated as Taiwan, the organization of large sporting events and the cultivation of star athletes represent highly effective forms of international propaganda. He laments that Taiwan's government has largely ignored Taiwanese athletes, leaving them to fend for themselves until after they've hit the big time.

Taiwan has three bodies with oversight over domestic athletics: the Sports Affairs Council, the Ministry of Education's Department of Physical Education, and the Chinese Taipei Olympic Committee. However, since their respective rights and duties are unclear, there is no comprehensive vision for Taiwanese athletics and our athletes have nowhere to turn for support.

Bros handled publicity and arranged corporate sponsorships for the 2009 Deaflympics. It also brought NBA legend Scottie Pippen back to Taiwan, where he served as an international spokesperson and attended charity events.

In 2010, Bros brought Chinese director Zhang Yimou's production of the opera Turandot to Taiwan for two performances, an NT$180 million venture aimed at raising Bros' profile in both Taiwan and mainland China.

Since the opera's set and sound -system were too large for any of Taipei's performance venues, Bros staged it at the Taichung Intercontinental Baseball Stadium. To reduce political risks and other negatives associated with recruiting entirely from mainland China, Bros hired a Taiwanese orchestra and dancers-some 350 people in total-to perform.

Initially, the mainland organizers worried that the Taiwanese performers wouldn't meet their standards and wouldn't be able to complete their rehearsals as quickly as necessary. But the production they ultimately staged led Zhang to exclaim that the Taiwan shows were the best of the opera's 17 public performances.

Though Bros ended up selling 80% of the seats to the performances (a total of about 40,000 tickets), the opera's production costs were so high and its corporate support so limited that Bros lost nearly NT$50 million on the venture.

Bros, which has a capital base of only NT$50 million, found itself in unfamiliar territory in 2010. The company coffers had been drained by its losses on the Dodgers visit to Taiwan and the production of Turandot. Chang had to turn to friends, family, and the banks for the funds necessary to keep the company running.

Nonetheless, both Chang and Hu were oddly upbeat, insisting that "the value of these events far surpassed their cost."

In childhood, both men dreamed of traveling to the US to attend an NBA game in person. They never imagined that they would grow up to bring the NBA to Taiwan and realize the hoop dreams of the many Taiwanese fans unable to travel to the US themselves.

When Bros brought the Los Angeles Dodgers to Taiwan, fans were thrilled to see stars Manny Ramirez (second from left) and Kuo Hong-chih (left) in the lineup.

Perhaps the most memorable event in Bros history was the 2007 NBA Cares charity event, for which Bros invited some 500 orphans and disabled children to meet NBA stars. When the event concluded, a mother pushing a child in a wheelchair with an autographed basketball hurried over to offer her teary thanks to Chang. Chang says that recalling the scene always gives him the strength and determination to carry on.

What started as a two-man operation 10 years ago now employs more than 100 people and generates annual revenues of nearly NT$300 million. It has also become the employer of choice for graduates of Taiwan's university programs in sports and recreation.

Close partners, Chang and Hu have complementary personalities and share a common objective and the courage to dream. The gregarious Chang is passionate and proactive, with a nose for business opportunities and a persuasive tongue. Hu is a quiet planner who sets strategy and oversees internal operations. Their employees often joke that the two men's business relationship is a bit like a marriage, with one handling affairs inside the "home" and the other outside.

Last year, Bros negotiated a first-ever MLB opening game in Taiwan, scheduling it for March 2011. The company had the contracts virtually done when the San Francisco Giants, one of the teams slated to play, won the World Series and pulled out of the deal.

Undeterred, the ever-optimistic pair made the best of a bad situation by immediately approaching the league in an effort to win the right to organize an all-star game in November 2011. The two men insist: "There are always opportunities. If we continue to hold such events, Taiwan's first MLB opening game is sure to happen someday."

At the invitation of Bros Sports Marketing, the NBA scheduled its first-ever Taipei preseason game. It was Taiwan's biggest sporting event of 2009. In the photo, Carmelo Anthony (left) of the Denver Nuggets and Danny Granger of the Indiana Pacers battle for a rebound.