Riding the Bass Boom

By Bill Saporito

The line waiting to enter the Hot Springs (Ark.) Convention Center was already down the block at 9:30 a.m., even though the doors wouldn't open for another half hour. The folks who turned out on this swampy summer morning were a consumer marketer's dream: young couples with two or three children squirming like fish out of water. They were there for the bass. Largemouth bass, that is, and all things bass related, from $50,000 bass boats to $2 lures, bass rods, bass reels, bass videos, bass T shirts. Also Castrol Motor Oil, Kellogg's Frosted Flakes, Snickers bars, Land O Lakes butter, Chevy trucks and Fujifilm.

Tony the Tiger and other advertising characters worked the floor while free product samples were distributed from exhibits. Kids played on huge inflatable slides or tried to hook a fish from a small pool while adults ogled 250-h.p. Yamaha engines and Ranger boats. A massive tank displayed fish from the region, including the guests of honor. Pro fishermen, swathed in a patchwork of their sponsors, signed autographs, gave demonstrations and chatted with fans. "The fishing pros are so nice. The other pros just sign and go," said Kim Davis, who had three kids in tow, one of whom longs to be a pro fisherman. More than 40,000 people visited over the tournament's four days, one reason the Hot Springs Convention & Visitors Bureau made a huge effort to host the event.

Later that day, a crowd of 10,000 filled the basketball arena connected to the convention center to watch the weigh-in of the day's fishing action. Amid a snazzy production of music, lights, video highlights and patriotism, the big moment came down to the contestants pulling fish out of a sack. Local pro George Cochran had the biggest haul, at 10 lbs. 3 oz., which he displayed to thunderous applause. Game over. By winning the Forrest L. Wood [FLW] Championship, Cochran collected $500,000, which isn't bad for a couple of days' fishing. Two weeks later, at the competing Bassmaster Classic in Pittsburgh, Pa., of all places, the winner's haul of 4 lbs. 3 oz. was worth $200,000. Both events were televised in lavish productions.

Half a million for a fishing contest? Sounds crazy. Absolutely, says Irwin Jacobs, the genial chairman of Genmar Holdings Inc., which owns the FLW Tour: that's hardly enough money. So Jacobs is raising the big prize to $1 million next year and promising a celebrity pro-am, the Pebble Beach of angling. "Nobody ever believed we could do this," says Jacobs, a man not unacquainted with hyperbole. "But we're not anywhere near where we're going to be in 10 years."

Jacobs is one of the big fish in the Bassplex, a subset of the gross domestic product propelled by some 50 million people who fish, spending more than $75 billion annually, and in particular those who pursue Micropterus salmoides. That overgrown sunfish with the large yap is found in 49 states and is one of freshwater fishing's most voracious consumers. (Do you sense a metaphor rising?) It was Jacobs who made the connection between Mr. Bigmouth and Mr. and Mrs. Shopper in launching the FLW Tour 10 years ago. Those insights hooked Wal-Mart, which became the tour's lead sponsor in 1997 at the behest of an executive and bass angler named Lee Scott, who is now the company's CEO.

This year the FLW turned 10, and the Bassplex shows no signs of maturing:

o In professional bass fishing there are two pro circuits and more than 25 minor leagues, as well as leagues for walleye in the north. The FLW has added redfish and kingfish tournaments as it expands into saltwater pursuits. It underwrote 214 events this year, handing out more than $30 million in cash and prizes. That's up from 135 in 2000. Sponsors continue to line up, checkbook in hand.

o Pro bass fishing appears on two television networks. ESPN, which spent $40 million to buy the Bassmaster Tour, and Fox, which sponsors the FLW, are going fin to fin for supremacy (see box).

o The hottest store in retailing isf Bass Pro Shops; the second hottest is its rival, Cabela's. Cities from Buffalo, N.Y., to Broken Arrow, Okla., are throwing hundreds of millions of dollars at those outfits for the privilege of getting one of their megastores. The stores are so popular, they drive economic development.

Fisherfolk are a passionate lot, and Jacobs is one of them. The son of a Minneapolis junkman, Jacobs learned to spot value early in life, and by the 1980s he was plying that trade on Wall Street as a corporate raider, even making a run at Walt Disney. In 1992 he made a different play, buying most of the junk bonds of yacht builder Carver, which had used the high-priced debt to gobble up a portfolio of boat brands and got into deep trouble when recession hit. When Carver's owners called Jacobs to negotiate with their new partner, he told them, I don't think you understand; you're out. He had spent $27 million to control $150 million in assets.

Carver came with immediate problems: Jacobs had to sell more boats in a soft economy. Among Carver's assets was Ranger Boats, which had been founded by Forrest L. Wood, a pine-tree- tall Arkansan in a Stetson who is pretty much the Paul Bunyan of bass fishing. Ranger, along with other fishing-industry firms, had for years sponsored fishing tournaments, but the payouts had been small because the companies couldn't afford big prizes.

To help promote fishing and thus boat sales, Jacobs bought Operation Bass, which ran many of those low-paying tournaments. But it too was struggling. He realized that since more than 50 million people fished, they didn't define a market subset. They were the market. "This group of people buys everything. And they're loyal. A bell went off in my head," says Jacobs. Folks who bought Strike King lures also bought tons of cereal and candy. And not only did they buy that stuff, but they could identify with pro fishermen.

In Jacobs' analysis, the tournaments were small time because they had the wrong sponsors. The fishing outfits were great, but they couldn't pay all the freight needed to raise purses or produce great television. So Jacobs supplanted them with corporations such as GM's Chevrolet division, M&M/Mars, 7-Up and Fujifilm, which wouldn't blink at, say, a $10 million sponsorship fee if it could move the sales needle. Then in 1997 he landed the whale: Wal-Mart. "We tend to think in increments, in small steps," Scott tells TIME. "Irwin thinks in big steps, in flights of steps." He also hounded the Wal-Mart man into submission. "It was the only way I could get Irwin to stop calling," says Scott of the deal.

The FLW moved the weigh-ins to Wal-Mart parking lots under a huge tent, where the sponsors were waiting with all kinds of kid-friendly entertainment. It was a sensation, so much so that the championship event had to move to a bigger venue. On the water, Jacobs outfitted each boat like a NASCAR racer, to the point where the outfit became unofficially known as BASSCAR.

Beyond the hoopla was the naked quest for sales. And it turns out the bassfest was good business all around. Genmar, Jacobs' boatbuilding company, moved more boats; Ranger continues to gain share in a flat market. Wal-Mart, meanwhile, got a boost because fishing made its stores more attractive to men, who have a tendency to shop well beyond Department 9--sporting goods--and visit other parts of the store.

The sponsors could see the knock-on effect too. Consider Fujifilm, the Japanese photo firm. Fuji hands out U.S.-made disposable cameras at every tour stop. Each camera can turn into two Wal-Mart visits--one to drop off the exposed film, the other to pick up the prints. Since Fuji runs the printmaking operation at Wal-Mart, it can give away the camera and still profit. Fuji's business in Wal-Mart rose 30% last year, and sales of most FLW-sponsored products have outstripped Wal-Mart's overall sales increases. Fishing fans, according to FLW's independent research, are huge food shoppers, accounting for 27% of the grocery purchases amounting to more than $200 in a given week.

Jacobs isn't the only guy trying to sell boats. In Springfield, Mo., another tournament bass-fishing legend, Johnny Morris, had established a mail-order company called Bass Pro to sell lures. Then, in 1978, Morris started a company called Tracker Marine that sold fully rigged bass boats (boat, motor, range finder, trolling motor, trailer, etc.) on a one-stop basis. Morris had opened a retail store on the site principally to give fishermen something to do when they came to Springfield to pick up their boats. In 1981, Morris changed outdoor retailing by establishing a combination sporting-goods store, museum and boat dealership that became the biggest tourist attraction in the state.

Bass Pro is enjoying a growth spurt that has in some ways taken its own managers by surprise. The company operates 27 stores, on the way to 50. It also owns a catalog and a website. The entire company will probably generate more than $1 billion in sales next year. The expansion is being funded largely by communities desperate to use Bass Pro as an instrument of economic development. "We used to do a new store every now and again," says president Jim Hagale. "Then a handful. Next year maybe we can do two handfuls." The city of Buffalo, for instance, offered $66 million in various incentives to get Bass Pro to crawl into the shell of a downtown arena called the Aud and build a gigantic store. A hotel and museum are also in the plans. The mission is nothing less than reviving that Rust Belt city on Lake Erie. It's an astonishingly tall order for an overgrown tackle shop to revive what had once been a manufacturing center. But at a time when there are few manufacturers for cities to pursue, the bass business looks pretty good. "You've got to go find something that drives tourism, which drives jobs and incremental sales revenues without impacting the infrastructure," Hagale says. Bass Pro is retail's answer to a chip-fab or an auto plant.

So when Jackson, Miss., offers $8 million, Garland, Texas, ups it to $23.7 million. Council Bluffs, Iowa, is in for $20 million. Bass Pro is a destination store, one that attracts enough traffic to benefit other stores--and restaurants and hotels--in any city or mall, where it is the anchor tenant. After all, notes Hagale, there are just too many cookie-cutter mall stores. "We don't build gray boxes," he says. He's not bragging. The 130,000-sq.-ft. Bass Pro Outdoor World in Hanover, Md., has a massive fish tank, offers how-to lessons in fishing and hunting and teaches conservation in addition to having every lure, rod, reel, gun and gadget under the sun. A full-size float plane hangs from the ceiling, and you can hang from a rock-climbing wall or test your new bow on the archery range. And you want a bass outfit? There are 37,000 fishing items, including $800 reels. Need a $2,500 Beretta shotgun? There are several to choose from.

Along with the gear, Bass Pro also tries to keep local knowledge in stock, which allows it to compete with hometown shops. It hires local guides and gear experts to staff the stores. "See that guy over there? He's the best gunsmith in the area," says employee Dan Kardash, pointing to a man hunched over a firearm. Kardash himself is a fishing guide who runs the store's fishing department.

This kind of growth attracts company, and Bass Pro's closest rival is Cabela's, which went public last year. Stock-market analysts are already nervous that the two companies are growing so fast that they will begin to clash directly, although, as Hagale says, it's a big country. The boat business doesn't have clear sailing either. Industry leader Brunswick is on a vertical-integration tear, a strategy that brought another firm, Outboard Marine, into bankruptcy. Genmar stepped in to feed on the remains, but Jacobs warns that a further shakeout looms in a market that is stagnant at about 300,000 units annually and getting hurt by gas prices.

Bass-fishing enthusiasts, however, aren't cyclical. Next year ESPN's Bassmaster is adding a women's league and an open elite series worth $11 million in prize money. ESPN is also increasing its coverage. And next December, probably in a California reservoir where the bigmouths grow to 20 lbs., some angler will reel in a lunker that will be worth a million FLW bucks, televised coast to coast. "I didn't create this need. I recognized it," says Jacobs, who has far bigger businesses in his portfolio that could occupy his time. But he's standing on a dock in Hot Springs at 6 a.m. on a Saturday, watching professional fishing. "I have a passion for it," he says. "This is my story." A fish story, as it were.