Tossed On Stormy Financial Seas And Seeking A Leash, Billabong International Ltd. Eyes A Private-Equity Life Ring

The surfs of capitalism are a-froth down under, where action sporting goods developer Billabong in recent weeks has found itself courted by Mitt Romney’s Bain Capital and a rival private equity enterprise, TPG Capital, both of which eyed plans to acquire the ‘Bong, buff out its financial dents, slap on a new coat of paint and present a trimmer, more profitable extreme enterprise to the capital markets. Billabong, purveyor of the eponymous boardshorts supplier as well as tree-hugging-and-then-cutting-down skateboard maker Element and the glasses company Von Zippa, already has mapped out a path to enhanced earnings power but the investment mavens of the private equity world bring to the table their own ideas. Boil the Ocean has put its own venturing capital war-chest away in the attic in favor of more economically conservative armchair critiques of the contemporary scene, but nonetheless proffers a few strategic alternatives that Billabong’s management squad and its new partner may take under consideration in this heady season of risk-taking and risk-making.

Incentivize multiple disciplines among RVCA signess. The unpronouncable alternative sporting clothes unit already keeps one foot on the board and the other in the proverbial octagon of mixed ultimate fighting, a scenario that represents an elixir for investors thirsting after operational synergies. Thought leaders such as Jason Ellis already have paved the way for pro skateboarders to test their capacity for head injuries within the fighting pits of Las Vegas and elsewhere, and RVCA already counts within its skate ranks well-known aggressor types such as Kevin ‘Spanky’ Long, Josh Harmony and Nestor Judkins.

Set an aggressive hurdle rate for Mike V’s next contract with Element. Multiple stints with Powell and a record of high attrition among his own hardgood ventures virtually ensure that Mike V has another nature-future ahead of him at some point, plus he already got the tattoo. Vallely’s ceaseless grind, grassroots efforts to reach the kids and willingness to tackle new projects like pro wrestling have seen his board-selling abilities endure, but striking a deal that would require a certain number of pachyderm-printed decks, wheels and shoes to move before alotting incentive pay would be one way to maximize income before Mike Vallely roams on toward life’s next green pasture.

Sell more $46 t-shirts. New Billabong CEO Launa Inman last month identified a AUD40 million sales target for the Element, Da-Kine and RVCA brands. At the current conversion rate, you would only have to sell 909,091 such shirts to make up the difference, compared to about 2 million regular shirts at like $20, less than half the work.

Harness Element’s ‘back to nature’ vibe. “Just to give you a little bit of a sense, Element is very much a skate brand. It’s all about urban,” said CEO Inman, remarking to analysts on a conference call last month. “It’s a brand that has done well in America, we just need to refresh it.” This makes sense — the U.S. launched ebonics, rap music and the career of Keith Urban. However, it leaves another segment of the marketplace untapped: rural. The hinterlands match up well with Element’s rootsy ethos but there is also a smart business move to be made here, as there seem to be far less competitors. Google returns about 127,000 results for “urban lifestyle brand” compared to just 4,200 for “rural lifestyle brand.” There may also be opportunities for a smaller, more nimble retail competitor to entrenched big-boxers such as Fleet Farm, Farm & Fleet and Runnings’.

Avoid global financial crises when possible. Responding to a shareholder query in August, Billabong CFO Craig White acknowledged that the worldwide financial meltdown of 2008 may have set the parent company back some 10 years in terms of earnings, which had to be a bummer. Now the European sovereign debt crisis is afflicting Billabong’s wholesaling business in that region, all of it highlighting the import of extraplanetary diversification.

Mike V Takes The Biggest Risk Of His Career By Launching A Company With A Three-Word Name

Mike Vallely is nothing if not a man of law. You support him, he supports you. You show up at one of his one-man middle America prefab skatepark demos, you get to see at least one brawny mute grab. You drunkenly wrest a hockey pole from the fingers of his daughter, and you may endure a televised pummeling that could ultimately cost Mike Vallely a coveted hockey blogging gig but not the dignity of his family.

So it is then that Mike V, as he is known, once again cashes in his deck sponsorship chips to go it alone again with the third (fourth? [shit, fifth?]) hardgoods concern, after several years of diligent brand building under the Element/Billabong parasol. He extends his latest business venture into risky territory though by choosing not a mononymous nym like “Transit” or “Vallely” or even “TV” but instead taking a gamble with the powerful yet weighty name brand “By The Sword.”

It makes sense because the tri-nommed brand hints at the powerful violence with which Vallely has long been associated. Yet also it suggests he is coming to terms with his own mortality, perhaps after shearing his locks, similar to the biblical story of Samson or Britney Spears. Vallely represents a figure of controversies and contradictions, but he remains emboldened by his do-it-yourself approach, signaled with his hiring of Jason Filipow to do the artwork for the skateboards.

But even bearing a personal brand as established and cultivated as Vallely’s, it’s hard to overstate the danger of employing more than one word in the name of your company. The ditches are littered with the delaminated corpses of those who tried and failed: Sixty-Forty, City Stars, Tree Fort, Channel One, Gordon & Smith, Santa Monica Airlines. Zoo York and Alien Workshop got bought. Birdhouse Projects moved to the singular burbs, Powell dropped the Peralta and World Industries has all but collapsed under its own weight. Even the venerable Black Label was flirting with the singular “Label” for a while, when the subprime mortgage crisis was peaking.

Can Vallely buck the trend? This is a question that must be and will be answered with time and the developing battle for market share he faces against JR’s Rand Paul-influenced venture, which has the benefit of a one-word name and a music career that may not be as long-lived as Vallely’s, but has certainly captured more blog attention, a priceless commodity in the 24-hour blog buzz cycle. He also is challenging this site in the realm of search engine optimization, a tall order against mounted men bearing halberds.

For The Record

In 1988, pro skateboarder Mike Vallely revolutionized the skateboarding sport

My pleas to let anticipation and tension build ahead of the inevitable BATB Round 2: Daewon Song’s Revenge having fallen on deaf ears, exhaustive coverage of the first quadrant is already under way so I suppose I ought to post my picks for posterity, seeing’s how I’m already 1-for-2 or however it’s termed in actual sporting phrasology. After hanging tough in one of those Es games of skate a few years back and that surprise caballerial kickflip last time around I thought Jamie Thomas had a little bit more in him, but as millions of kids 15 years younger than I already know, he did not. Perhaps chomping too many frontside k-grinds. BTO fared a bit better in the Cole v. Vallely matchup, but just barely, as the Colester’s good-natured agreement to bend the rules in favor of ’80s Skate Rags maneuvers produced probably one of the most fun to watch episodes thus far. Honestly I thought Mike V was pretty amiable about the whole thing and it would’ve been amazing to see one of these with Eric Koston or Mike Carroll. Let this stand as a warning, kids, a cautionary tale of what can happen to your switch heelflips if you choose to focus your energy on quasi-celebrity hockey blogging and acting in Kevin James vehicles.

Mall Justice No Match For Mike Vallely

“Somewhat integral”

Mike v is a man of contrasts. There are those who would call him a hypocrite. I view him as a beardly figure brimming with nuance and harsh truths about the human condition. Also, bonelesses. Truly he is a man of our times, but as it ever was, the measure of a man is made not in X-Games or even the wrestling ring, but rather in that penultimate court of American accomplishment, the box office.

Last weekend, you see, Mike V met and introduced himself to the U.S. public, or at least those unlucky few who haven’t seen his Fuel TV series or his numerous biographical documentaries or his poems. As one of the chief villains in the new retail-themed thriller “Mall Cop,” our Vallely is garnering passing mentions, if not rave reviews, in the national press. To wit:

Finally there’s champion skateboarder and musician (in the band Revolution Mother) Mike Vallely, who plays the criminal ringleader, Rudolph.

“They had to find the most bad-ass skateboarders on the planet,” says Vallely, a voracious reader and father of two who wears his blond hair long and scraggly. “I was at the top of that list.”

Vallely has the biggest action sequence of the bunch, battling James throughout the mall. In what he describes as an undoubtedly riveting climax, Rudolph will leap from floor to floor as he chases Paul Blart. Then, in a never-before-done skating move, he’ll jump on – and break into – a moving elevator.

“It’s a whole new challenge,” Vallely says. “I’m not just skateboarding. I play a character that is somewhat integral. This is the first time I feel, as athletes, we’ve really been taken in.”

Somebody’s been taken in for sure, as the Blart-star vehicle hoisted an estimated $40 million over the three-day weekend, putting it in the number one box-office spot.

But the tidings of Vallely’s Hollywood success is of course no news to those of us in the skateboarding sphere, who gladly cheer the multifaceted Mike V as he flexes his pecs in the squared circle, gets his nose cracked open on the hockey rink, recites verses at the poetry slam, snarls through his beard at the Warp Tour, or pushes over and over and over in that Black Label video. Cuz it’s not the destinaton. It’s the journey.

“I just had water, anger and a destination. It’s just how I am,” Vallely says.

Equally transfixing are Vallely’s intellectual travels, transitioning through vegetarianism, straight-edgeism, and non-violence over the years. (Yes, non-violence.) He hews closely to the punk purism of local scenes and staying true to skating’s roots, whatever those may be, while fervently embracing mega-corporate sponsors. He remains fiercely loyal to his sponsors of the moment and wastes no time in spewing poison upon those who dare to cross him.

To this end there’s actually a really good interview in the new Transworld (2-09) where Mackenzie Eisenhour kind of gets Mike V to admit he wants to have his beating-people-up cake and eat it too.

TWS: You repudiated violence after the “Greatest Hits” DVD. (re: fighting “Creature Lee” at Van’s Downtown Showdown last year)
MV: In a broader sense, I have spoken out of both sides of my mouth…. “Greatest Hits” was definitely the capitalist pig in me [laughs]. After the craze of “CKY” and “Jackass”, I saw an opportunity in the marketplace to package that stuff and that’s something I can understand someone disagreeing with.

There’s a lot more, it’s a pretty good interview in terms of putting the harder questions to Vallely as far as his perceived jock nature, whether he ever considers learning new tricks, how he’d be a great cop and that hoary old cliche “skateboarding saved my life.” Also there are two photos of bonelesses.

Christ Air

The only way to fly

Australians love to party, and who can blame them? Their scenic island nation is surrounded by lovely beaches and reefs, crocodiles and concrete skateparks are abundant, and the land was immortalized by 80s hit machine Men At Work (later covered by Sheckler favorites MGMT).

But, as Rupert Murdoch has made clear, there’s always one guy who’s gotta take things too far. Behold the sobering tale of a homebound Aussie and his ignoble choice of coke mule:

A 33-YEAR-old Victorian man faces up to 25 years in jail after cocaine was found hidden inside two skateboards at Sydney Airport.

The man was stopped by Customs officers yesterday after arriving on a flight from Auckland, Customs and Australian Federal Police (AFP) said in a joint statement.

Get it? Joint statement? Anyway.

Customs officers became suspicious that drugs were hidden inside two skateboard decks and an X-ray revealed an image consistent with a possible drug concealment.

Now when I read this I immediately thought to myself, how exactly might one go about hiding a bunch of blow in a board? And it came to me. The Element Push/Helium constructions! Obviously this Down Under Rick Ross had read his TWS Buyer’s Guide.*

If you think about it, this sort of makes sense. We’re nearly a decade on from one of Muska’s more nefarious contributions to the skateboard style canon – the weed stash pocket – and as the stair sets get bigger and the rails longer and the mega-ramps span more and more famous landmarks, it’s natural for someone to come along and up the stakes. Hence the coke smuggling board from Element. Shit, check out the Helium construction logo. No business like snow business.

Curiosity got the better of me and I pulled up this handy cocaine street value calculator, because that’s the beauty of the internet right there, and if the estimate is correct, this dude fit like $75 grand worth of blow in each board. “$75 grand per board… I don’t care how many Dew Tours you win… you got to win forever to make that kinda loot.”

No doubt. You have to wonder how deep this goes. Is Tosh Townend’s new deal over at Pocket Pistol skates a new distribution venue, or a pit stop on the way to a Colombian necktie? Does Element operate an extensive and shadowy Latin American “flow team?” Does this all somehow explain Mike Vallely’s seemingly constant aggression? Are the, ahem, Helium deck exports keeping Element afloat through this difficult economic period? Too many questions, and too many bad puns. I’m quitting while I’m ahead…

*It’s worth revisiting Cairo’s comments on deck technology: “I’m totally not backing anything with a missing ply inside. I’m not going to name names.” Possible endorsement of the stop snitching campaign?

Anthony P’s Greatest Hits

TKO

Aside from a blockbusting line from Guru Khalsa, the simple pleasures of a Kenny Anderson backside 180 on flat, and assorted rippage from the likes of Vincent Alvarez, Silas Baxter-Neal and Dan Drehobl, what jumped out at me most about the new Elwood promo was Anthony Pappalardo’s continued devolution in terms of trick selection: three clips, five tricks, all ollies. Disregarding the more technical stuff in his Fully Flared section, up to and including what was probably the scorchingest backside tailslide I’ve seen in many a moon, let’s go ahead and wantonly extrapolate from this new APO footage what future direction his skating might take.

Comparisons to a Puleo-esque career arc have been made for some time now but I see another influence at work: none other than New Jersey’s warrior poet, Mike V. Morose loners both, raised in flannel and East Coast winters, disgruntled with the skate industry–might we see a part’s worth of eyes-to-the-ground pacing, purposeful pushing through urban climes and silhouetted rolling in the upcoming Chocolate feature? This is just one vision of Pappalardo’s future. I can think of more, involving slam poetry, backyard wrestling and bearded punk-metal, or a wild and shirtless combination of such elements. If he starts farming his hair, bulking up and whaling on security guards, you all owe me $10.

Five signposts en route to the grave of 411VM

This week brought the long-anticipated but no less vaguely sad news that 411 Video Magazine’s life support was finally pulled by the core bros over at Wasserman Media Group. (Commentary by another recent Wasserman acquisition: “I’m still creatively in control of the site.” Live and learn…)

411 has existed on the fringes now for a good while, and it’s been like a decade since new issues were met with any kind of anticipation. So in a way it’s impressive they made it this far, but wonders never cease when it comes to beating dollars out of dead horses in the skateboard industry. Look at NSS. Shit, look at Duffs.

These days, though, it would probably come as a surprise to your average New Era’ed hardflipper that people used to pay for 411s, much less subscribe to get it in the mail. And among those who do recall 411′s glory days, you’re hard pressed to find anybody wax nostalgic about any issue past 30, with the exception of the Gino/Keenan/Pupecki “Roomies” in 38. I’ll go as high as 39 myself, but you know I stay having low standards.

The point is, 411′s demise has been written on the wall for some time now. A few of the telltale signs along the way:

Es Menikmati released

Fred Mortagne’s biopic/skate epic ushered in an age of blockbuster videos, washed down with a generous helping of slow motion, fancy graphics and generators. For better or worse the Es super team helped raise the bar as far as tricks, lengthy parts and production value, and in a matter of years poor 411 would find it more difficult to source footage of high-profile dudes to sprinkle between the up-and-comers and washed-ups in the Chaos sections.

411 decides to put dudes’ faces on the cover

The Skateboard Mag tried this one too, with the fairly impressive result of making Dave Carnie somehow feel like more of a pervert than he already is. The Stance approach didn’t work for TWS, and even in this age of rock star pro skaters, what self-respecting 14-year-old really wants to look into Muska’s stoned bedroom eyes every time he puts on the Cliche chaos? Note to all those still considering a portrait cover: use artwork.

Lance Mountain stops hosting

The little things, you know? I appreciate Mikey Taylor and his undying devotion to Roc-a-Fella as much as the next guy, but it just ain’t the same. Like when they tried remixing the theme song.

411 911

You know you’re running out of ideas when you start taking cues from ESPN and MTV. At this point it was pretty clear they were getting hard up for money. Speaking of, didn’t 411 also put out that video of Mike Vallely’s fights?

Youtube

Podcasts and Field Logs and Wednesday Woes too. Free, quick-downloading video in tolerable quality has skateboarding on a 24-hour footage cycle now, and whatever scraps Company X might have thrown to a 411 in the past now go to the website, the Youtube channel or the “Special Edition” DVD*. Videographers like Josh Stewart will happily tell you at great length how difficult it is to sell even hotly anticipated DVD releases in this day and age, and although Weiss somehow keeps pumping out Digitals, 411 a couple years ago gave up trying to charge American money for their videos, and in the process turned each new edition into a branding vehicle for this company or that. They’ve made some effort at orienting their site around new clips, as well as something bizarre called 411VS that appears to be some kind of fantasy skateboarding league, but there’s a lot of footage out there now, and only so many minutes in the average skateboarder’s Internet day, in between checking the Slap board, cleansing the browser history of porn links and reloading the bong.

Today 411′s website offers you a look at a flyer for a Krux kickflip challenge. Meanwhile the Berrics has new footage of Sean Malto, Eric Koston, Mike Barker and Erik Ellington. You see where I’m going with this. So long 411.

The WASPafarian’s dilemma

“Jah bless, bros”

So the news came out yesterday that longtime Element posterchild Tosh Townend has been relieved of his duties as head dread in charge over at the shareholder-friendly skate company for suburban tweenage hippies. Much is already being made of the fact that Tosh was an early adopter of the Element “package”—consolidating clothing, shoe, board, wheel, and whatever other sponsorships under one roof that almost certainly would never fall in on you. Right? But like many environmentally themed construction projects, Tosh’s Elemental Odyssey suffered from a fatal design flaw, possibly related to the enduring presence of Mike V. Glass houses and stones, etc.

You could feel sorry for Tosh. I might, if he weren’t the biological heir to a surfing dynasty, pulling pro shoe money since he was 18, and seemingly not slowed by major surgeries. Me, I feel worse for Element. Because like many parents, the honchos of ElementBillabongCoIntlGroup seem to have got out of bed one day, looked at the bedraggled and odorous dreadlocked mess snoring on the couch, and decided enough was enough. Like any parent of a carefree hippie who’s left one too many roaches between the sofa cushions, Element had to take a deep breath, throw the front door open and tell the boy they’d raised to get the hell out and get a job.*

I expect that Tosh will spend the next few days blearily blinking his reddened eyes, smoking a sympathy bowl or two with his fellow rude boys, possibly cursing the name of Johnny Schillereff and pondering a return to Zion. But he’s long overdue for starting his own shit. He was a big force behind the Sin Habits crew/video, which gave way to something called the Weenabago Projekt, where—get this—a white guy with dreadlocks is gonna drive across the country in a retro bus with all his best bros. Crazy idea, right?

Anyway the point is young Tosh (still only 23, which kind of bugs me out) has his own crew, he’s been doing his own projects for a while, and he’s got a cozy relationship with the High Grade distribution camp. So if the hobbit’s leaf gets the better of him he can probably crash on Creation’s couch for a while. One love, Tosh.

*For what it’s worth, the financial markets seem to have taken this as moderately good news.