A merger in midrace

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Just in time for the Olympics, Starcom MediaVest Group is passing the torch, creating a new sports marketing agency out of an old one.

Starcom Sports Marketing is merging, through a strategic alliance, with St. Louis event-marketing company J.C. Dolan & Associates to establish a full-service sports, sponsorship and event-marketing company called Relay, which will operate as a Starcom MediaVest shop.

The arrangement does not mean the Bcom3 Group agency has bought Dolan. "We are not acquiring the company," said Wally Hayward, who was VP of Starcom Sports Marketing and now becomes CEO of Relay. "We set up an exclusive alliance with them." Mr. Hayward, 33, who spearheaded the venture, said Starcom MediaVest worked with Dolan for a year on a project basis and the new partnership formalizes the relationship. Terms were not disclosed.

John Dolan, president of J.C. Dolan, said the agreement will last indefinitely, but also said no formal contract was signed. His company will continue to exist independently of Relay, with its own name and client list, which includes Meredith Corp.'s Better Homes and Gardens, Anheuser-Busch Cos. and General Motors Corp.

For Mr. Dolan, the deal gives him "the ability to pursue a vast new client list," principally clients of Bcom3 Group, including the U.S. Army, Hallmark, McDonald Corp.'s regional franchisee business, Delta Air Lines, Nintendo and Procter & Gamble Co. For Starcom MediaVest, working with Dolan gives it a company that can execute its marketing ideas.

"We go to Nascar races and put up interactive areas for the U.S. Army," Mr. Dolan said of a project it did this year with the agency.

Relay expects to open headquarters in Chicago and will open satellites in Miami, Toronto and in Mexico City, as well as in Europe and Asia. In most cases, Relay will work out of existing offices of worldwide Bcom3 shops. Billings are estimated at $30 million.

According to the most recent IEG Sponsorship Report, U.S. advertisers spent $9.53 billion on sponsorships last year, of which 69% were sports related while 9% were entertainment based.

"Relay represents our commitment to experiential marketing," said Nick Brien, president-U.S., SMG New Ventures and Mr. Hayward's immediate boss. "This is an incredibly vital area. As traditional media declines in importance, brands will be built through experiences."

Mr. Brien, who joined SMG earlier this year from Leo Burnett, London, has now overseen three launches in his quest to revitalize and integrate offerings at the media giant. The new ventures group recently created Halogen, a direct response agency, and Tapestry, a multicultural media communications company.

"It's part of our commitment to become a communications architect for our clients," Mr. Brien said. "We're starting to build up the armaments. I'm just making sure the arsenal is full."

Contributing: Kate MacArthur

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