When Tycoon Group was founded in Mexico City in 1990, the licensing and entertainment business in Mexico was wide open with a number of small companies vying for domestic and international partnerships with key licensors. Two decades later, the competitive landscape is far different thanks to Tycoon.
"With 20 years behind us, we are the longest-running licensing agency in Mexico, and most of the other agencies that were around when we started have disappeared," says Tycoon co-founder Elias Fasja. "And that's because we changed the rules of the game and made it more professional and profitable for everyone."
From the start, Tycoon impressed its licensing partners with a level of professionalism not usually associated with small start-up companies in Latin America. But just as important was its unique approach to
That was evident last year when the recession hit the licensing business hard and tamped down retail sales. But it wasn't the worst of times for everyone. "For us, 2009 was a record year," says Fasja. "Looking back, it was amazing the way we were able to move through the storm."
Signing major licensing partners at the right time was a key factor in the continued growth of Tycoon. In 2008, Tycoon teamed with Marvel Entertainment just when its newest property, Iron Man, was taking off in theaters. "We've been with Marvel for two years now, and we've developed a very careful segmentation of brands and prices in all channels of distribution," says Fasja. "We have grown the Marvel franchise in Mexico by 60 percent in this short period of time."
Elias and his brother Alberto have always had a knack for good timing. Back in 1990, the brothers used their background and experience in licensing—Alberto had worked with Cherokee and Perry Ellis and Elias with Cacharel—to form their own company. After an initital attempt to license out a Mexican entertainment character, they came across a classified ad for an international licensing agent for Twentieth Century Fox. They met with industry veteran Al Ovadia, who was working for Fox at the time, and were awarded a license to represent Fox south of the border when the right opportunity came along. That same year, "The Simpsons" debuted and gave Tycoon its first major property. Fox remains Tycoon's longest standing partner to date.
Its experience with merchandise from The Simpsons gave Tycoon the foundation it needed to land new licensing partners. The Simpsons not only provided Tycoon with a steady source of income in the early days—one that's still paying out—but also gave it experience and a foundation to build on. After Twentieth Century Fox, Tycoon steadily added clients such as HIT Entertainment, Sesame Workshop, 4Kids Entertainment, Viz Media and Sony Pictures.
During the early years, when Fasja recalls Tycoon was "a little entity and didn't want to look like it," it put a premium on professionalism and customer service. Tycoon returned every fax or phone call within eight hours and established other basic service policies that he says "had a great impact on licensors" and established its reputation as a serious and well-structured company.
As its reputation and business developed, Tycoon built a diverse portfolio of brands, mixing entertainment with a growing stable of sports franchises that's in keeping with its business philosophy.
"We're resistant to grow in terms of the
of properties and favor growing
the properties," says Fasja. "We more often say 'no' than 'yes' to new business approaches in favor of taking each brand to its highest potential."
Its sports partners include Major League Baseball, Real Madrid, A.C. Milan, Chivas, Pumas, and the recently signed World Wresting Entertainment. "WWE signed with us this year and their growth has been very dramatic," says Fasja.
Tycoon's emphasis on brand building includes a comprehensive approach to managing and promoting brands. A major part of that strategy is staging high quality Broadway-style live events for brands such as Barney and LazyTown through its live shows division, which was founded in 1996 and stages hundreds of shows each year, primarily in Mexico.
"In the past two years, we've had more than 700,000 people see our shows," says Jaime Askenazi, chief financial officer of Tycoon and head of live shows, "and the live events business will continue to be grown." According to Askenazi, a show based on the Cartoon Network program "Ben 10" will become a top seller in its playlist this year.
Askenazi says another new venture will be staging shows in major markets in the U.S. and it will use Lazy Town to make its U.S. debut. "We're waiting for the TV show to build more awareness with audiences in the U.S.," he says. "And we're looking at staging the show in various markets in Arizona, Texas and California, as well as major cities like Chicago and New York."
Live shows tie in closely with Tycoon Home Entertainment, which was founded in 1996, and handles DVD and CD distribution and manufacturing. Division president Benito Villarreal says Tycoon has become a leader in niche markets that were previously under-served, including babies, children, fitness and documentaries.
"The product areas we choose are products that people are willing to own," says Villarreal, adding that children's DVDs are "one of the least-expensive toys you can buy for a child." Barney has been its biggest-seller over the years with 55 DVD releases and 15 CDs.
Villarreal says home entertainment sales dropped for the first time in 2009, due in large part to the recession and to the swine flu outbreak in Mexico, but he expects those numbers to rebound this year to 2008 levels.
He says Tycoon Home Entertainment plans to distribute its first Blu-ray titles and it's going after the ancillary market in fitness DVD. "Two years ago, we opened a lifestyle division and became exclusive distributors for Gaiam and The Firm selling accessories such as yoga mats, exercise balls and resistance bands, which complement our fitness videos," says Villarreal.
Tycoon has also become a true multinational company with offices in four different countries, including Costa Rica—which oversees its business in Central America—along with satellite offices in Chile, Colombia and Peru. And to oversee business in places where it doesn't have a physical presence, it co-founded the Pan American Licensing Network in 2000 to extend its reach into Argentina and Brazil.
Looking ahead, Tycoon plans to follow the same methodical approach that's brought it so much success over the years while pursuing new opportunities. Fasja says the company sees fashion brands for girls as a lucrative, untapped market and believes expanding further into sports will provide a safe haven in a stable market that has wide appeal.
Tycoon also has its sights set on another booming, untapped niche: the ethnic market in the U.S. "Basically, the ethnic market in the United States is a market that's not being catered to," says Fasja, adding that Tycoon will focus mainly on small retailers in ethnic neighborhoods. "We're looking at distribution of product mainly to small shops. This channel is comprised of thousands of independent shops and is becoming a significant marginal business, which today is worth millions."
For Tycoon, expanding into the U.S. is a logical extension of its philosophy of taking care of its business partners while pursuing steady, sustained growth. "We've always tried to evolve with our environment and inspire trust, and that trust has been a major factor in our growth and continuity of the business," says Fasja.
And that approach has earned praise and appreciation from long-term partners such as Sesame Workshop. "As a true business partner, they continually challenge the status quo and continually seek new ways of being better and more successful," says Sesame's vice president of global consumer products Maura Regan.
"Tycoon won our Rising Star award in 2009. Their focused determination and passion have made them a highly valued partner," says Carolyn Ryan, director, international market development, Gaiam.
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